Unveiling the Inconvenient Truth of Korean Auction Market
-Unveiling the Inconvenient Truth of Korean Auction Market
HOW EXQUISITELY painted the marvelous masterpiece of the cover is! Each rough touch vigorously poses in pursuit of harmonious coordination within a frame of a pond. The unique "bold serenity" of "Water Lilies” has been perfected by Jean Claude Monet, a world renowned Impressionist artist. One cannot but become mesmerized by just standing in front of the grand piece in a museum on any day. Then how about holding an ownership of such soul-drenching art pieces, not only Monet's but any pieces you fall for, at home everyday? To solve the question of satisfying selection and ownership of masterpieces, auctions exist. Recently, with the public collectors' dramatic rise of desires in possessing artworks, auction market is flourishing in Korea. Nevertheless, contradicting such fantasy of collectors, the concealed process in reality of art auction quite undermines priceless art pieces and its value.
Korea’s current art auction market
K auction which was established in 2005. We can presume from this, Korea has extremely short history of art auction market compared to the European countries. Even of its late emergence, art auction market is gaining rapid popularity as a market where art collections can be freely dealt for the last couple of years.
“Asian market including Korean art auction market sure seems to develop immensely in both quality as well as quantity after the arrival of the 21st century,” stated Dr. Dirk Boll, the Managing Director of Christie’s Zurich in the seminar of “What is the Art Market” sponsored by 2007 KIAF (Korea International Art Fair), last May. For example, auction companies such as the Seoul Auction and K Auction’s last year’s total sales rate were slightly over 5 billion won, however the latest reference made this March shows that the total sales of one major auction of both companies nearly doubled. The sales rate rose to 12.5 billion won, showing enormous increase in just three months. This ascent of the Korean art auction market is also proven by the price value of Park Soo-kuen’s art piece as well. Last March, his work was soled in the price of 25억, which renewed the record for the most expensive art piece of Korea.
The art auction is also known as secondary market, in comparison with the primary market, which stands for the deal of artworks through independent galleries. Before the growth of the secondary art market, circulation and deal of art pieces by different galleries were the main approach of art markets. However, in the coattail of the enthusiastic market’s interest for the last two or three years, several more auction companies are in preparation to enter the secondary market. This clearly shows that Korea’s recent concentration towards the art auction market has increased very drastically, enabling auction to work not only as a price decision system but also as the social meeting point of Korean culture society.
K auction which was established in 2005. We can presume from this, Korea has extremely short history of art auction market compared to the European countries. Even of its late emergence, art auction market is gaining rapid popularity as a market where art collections can be freely dealt for the last couple of years.
“Asian market including Korean art auction market sure seems to develop immensely in both quality as well as quantity after the arrival of the 21st century,” stated Dr. Dirk Boll, the Managing Director of Christie’s Zurich in the seminar of “What is the Art Market” sponsored by 2007 KIAF (Korea International Art Fair), last May. For example, auction companies such as the Seoul Auction and K Auction’s last year’s total sales rate were slightly over 5 billion won, however the latest reference made this March shows that the total sales of one major auction of both companies nearly doubled. The sales rate rose to 12.5 billion won, showing enormous increase in just three months. This ascent of the Korean art auction market is also proven by the price value of Park Soo-kuen’s art piece as well. Last March, his work was soled in the price of 25억, which renewed the record for the most expensive art piece of Korea.
The art auction is also known as secondary market, in comparison with the primary market, which stands for the deal of artworks through independent galleries. Before the growth of the secondary art market, circulation and deal of art pieces by different galleries were the main approach of art markets. However, in the coattail of the enthusiastic market’s interest for the last two or three years, several more auction companies are in preparation to enter the secondary market. This clearly shows that Korea’s recent concentration towards the art auction market has increased very drastically, enabling auction to work not only as a price decision system but also as the social meeting point of Korean culture society.
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| So Jin-soo (President of Art Market Resaerch Institue) | ||
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The first art auction company of Korea, Seoul Auction, was founded in 1998, followed by
The auction market’s trade proportion of Korean art market is known to show steep increase from which was formerly 30%, proving auction house’s active role in the art market. However, several problems, such as unreasonable process in evaluation of art pieces, illogical distribution, are simultaneously rising. “However the most severe problem is new artists specialized at contemporary art field, have so many obstacles in order to enter the art market,” shared So Jin-su, President of Art Market Research Institute. Contemporary new artists are expressing their hardships because of limited channel in entering the art market. “The only way for the new artists to show their talents to the art market is either attracting the galleries or holding their own exhibitions. However, since opening one’s own exhibition is extremely costly nevertheless it exceeds the minimum budget wage of what new artist can afford. Therefore new artists of the contemporary fields inevitably become dependent to the galleries’ selection,” mentioned So.
Defects of the commercial approach to art
Solution 1: Fostering expertise of own
The problems investigated above are quite complex. However, instead of facing frustration from the critical view, amenable changes to enhance the auction market should also be looked after.
For a fluent employment of newly-rising artists, a strong need for fostering contemporary art expertise in auction exists. As mentioned earlier, Korean auction market should especially supply more expertise in contemporary art circle. Unable to furnish self-sufficient contemporary expertise of auctioneers and curators for even domestic auctions, Korea should benchmark art institutions of the Sotheby and Christie, the two most prestigious auction companies around the world. They founded their own auction schools to educate auction process as well as artworks and art history. Youngsters around the world fly to the auction schools to become a professional auctioneer, and Korea is not the exception.
Many professionals in art field advises that it is always vital to have auction institutions of own by domestic auction companies to better produce a true expertise thorough at Korean art market to find new artists. For example, it is clear that great talents and potential of Korean obscurities can be better discovered by Korean auctioneers than Japanese ones. Practically such efforts are made by Korean auctioneers. “Cutting Edge,” a Korean brand-new auction for newly-rising artists, is managed by the verified auctioneers at Seoul Auction. To encourage such customs of “Cutting Edge,” it would be much convenient and prospective if Korea has own institution to foster expertises like the Sotheby and Christie.
Not just lingering on the realization of the importance of establishing Korean art auction institutions, a more concrete plan to actually set up the educational system for fostering expertise should be ensued. Institutions would be valuable, but they are not as effective as having educational system at university level. In Europe, auction and art market related educational system is sophisticatedly arranged. “In most of the European universities, art is related to every major. One can major in art related to such field of law and business,” mentioned Dr. Boll. However in Korean universities the efforts to combine art with practical studies are remarkably lacking. Only Daegu Catholic Univ. has a class under the name of “Art auction and practice,” however, quite unfortunately this is also restricted to the liberal art course of Art Dept. The present inexistence and negligence of art related majors would only widen the gap between the demand and the supply of experts in the art auction market in the future. Therefore stretching endeavors in comprehension of art in the perspective of practical majors is by all means promptly needed among Korean universities.
Solution 2: Enhancing Artistic eyes of the public
Then what should be done to reverse the situation of public inclination toward commercial artworks and negligence on pure-artworks? The key is to elevate appreciative eyes of public and a search for the ways for elevation is requested.
One search can be made from the art market, restraint of the solely profit-seeking behavior by introducing pure arts to the public that are not in great demand or profit will guide the public to the right notion. “In foreign art markets such as the UK, the market leaders fervently strive to minimize the gap between the commercial and pure-art market by holding ‘Frieze art fair.’ It usually displays contemporary arts which are quite abstract and experimental for public to understand, meaning non-commercial art market. However, as time goes by, the public start to respond and enjoy the works in the Frieze. This means upgrade in both appreciative eyes and art market as a whole,” mentioned Kim.
The second answer can be found from the public themselves. The public must possess strong motivation to discover the artworks that they can truly enjoy. If they have such motivation, they will voluntarily study artworks and visit galleries or art fairs much often and it will upgrade their artistic standard and eyes. The efforts from above and below, if mixed, can certainly produce much prosperous art market and diversified contents in auctions, which will mark the Korean auctions as competent markets.
* * *
Numerous renowned sociologists predict from the examples of European counties and America, that once a society reaches a certain level of economic wealth and prosperity, its people are destined to seek for satisfaction for life by means of cultural factors. In the cultural stage, fulfillment in cultural aspects in life becomes the key to our happiness. “Our society is slowly but definitely veering from the stage of economically striving point to cultural fulfillment point, therefore it is crucial for us to acknowledge and participate in this inevitable progress,” reminded So. Our society is also anticipated to enjoy the cultural prosperity, therefore needs to enhance the cultural understanding and foster the artistic eye. Especially, the art auction could be viewed as a process of our society’s transition from economic stage to the cultural, because it is the combination of economic price system and art. For this unique feature of art auction market, it is expected to play a leading role during the cultural flow for the next few years as well as when our society reaches the complete cultural stage. Therefore it is your time and turn to pay further attention in this specific field and get involved.
Box 1: 2007 KIAF (Korea International Art Fair)-6th Exhibition
1 Date: May 9-13, 2007
2 Place: COEX Convention and Exhibition Center, Pacific Hall and Indian Hall
3 Guest Country: Spain
4 Participating Galleries /Artist: 208 galleries from 18 countries/13,000 from home country and abroad
5 Number of Works: around 5000 pieces in painting, sculpture, print, photography, media
6 Total sale/visitors: 17.5 billion won/65 thousand people
7 Interview with Choi A-reum, Manager of KIAF organization committee
“The motto and ultimate goal of art fair differs from that of auction market or biennale. Fair is basically for the public to come and enjoy as well as buy artworks conveniently. We try to introduce promising artist to the art market and support them. Especially, this year we planned various events from portfolios of new artist as well as lectures from art experts.”
Box 2: All You Need to Know about Art Auction
Box 3: Prestigious Auction Houses: Christi and Sotheby
<Christi>
-History: Founded by James Christie when he conducted his first sale on 5 December 1766.
-Current: The world's leading art auctioneer with global sales in 2006 of 4.67 billion dollars,.
-Categories: Christi offers over 600 sales annually in over 80 categories, including all areas of fine and decorative arts, jewelry, photographs, collectibles, wine, cars
-Worldwide: Christi have 85 offices in 43 countries and 14 salerooms around the world including in London, New York, Los Angeles, Paris, Geneva, Milan, Amsterdam, Tel Aviv, Dubai and Hong Kong
<Sotheby>
-History: On March 11, 1744, Samuel Baker, founder of Sotheby's, held the first-ever sale under his own name.
-Current: Sotheby's became the first international art auction house to hold auctions on the Internet.
-Categories: fine art, antiques, books, jewelry, toys, dolls, and other collectible memorabilia.
<Requirements>-For a certain artwork to be dealt through art auction, there are four requirements.
1) Rarity: the reason why people show interest to art pieces is because unlike identical products art is unique
2) Freshness: if an artwork resembles such other it is hard to intrigue the publics’ attention
3) Authentic: auction houses have to prove the genuineness of the product
4) Provenance: who owned it before is important as well
<Constituents>
-auction houses, advisors, art banks, detectives…
1) Auction houses: the actual components of art auction
2) Advisors: gives advises about artworks to the private collectors
3) Art bank: navigates the customer’s through the art market by fund
This dependence to art galleries isn’t limited to new artists, but it is also shown in the auction companies as well mainly of two reasons; lack of experts and their restriction in the artwork selecting process. Auction houses rely on their own crew of advisors and experts in contemporary artworks’ value-evaluation process, however, the absolute amount of experts in the contemporary art field is lacking in Korea.
Prestigious companies such as Christi and Sotheby’s experts get involved from the start by selecting the artworks directly from various galleries. However, Korean companies’ expert crews partially participate, after the selection for the presented pieces in the auction has already been confirmed and completed by the suggestion of galleries. This indicates that these art experts only set the estimated price range for the confirmed pieces, while the selection for the auction is settled by the galleries’ suggestion. This is the reason why in major auctions, held in every two months, auction houses are eager to present highlight artworks of classic artists such as Park Soo-keun, Chun Kyung-ja to draw people’s attention. Meanwhile, uncountable contemporary artists who have never underwent the evaluation process by art related curators experts, are taking over most of the percentage in one unit auction. “Unlike classic artworks, there is no a complex system to verify the value of contemporary artworks in Korea. Only about 5 galleries in Korea provide authentic contemporary workers to auctions. This creates huge problem in terms of devaluating quality in contemporary artworks and superfluous quantity in verified contemporary artists, which entails a loss in competitiveness in international auctions,” Kim Hyun-jin, free lance curator of KIAF, sent a warning message.
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| International highest bid (No.5) Jackson Pollark $ 140 million | ||
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Defects of the commercial approach to art
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| The ongoing auction | ||
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The distressful problem contains issues of not only the employment of newly-rising contemporary artists but in misuse of artworks for commercial purpose only. Recent extraordinary attention on the art auction with sharply increasing number of customers attributes to its profitable marginal returns. In other words, the current Korean auction is maneuvered by a sudden market boom to enlarge wealth, demising the artistic aspect of the “art” itself. Consequently side-effects from commercial misuse are emerging.
To begin with the speculative custom in art market would end up gravely degrading the fundamentals of Korean arts. As the auction market tends to reflect more gold-seeking characteristics, the auction itself will better treat well-sold and famous artists, which entails the consequence of generating the dominance by the commercially motivated artists. Then the pure artists will become impoverished. They cannot but surrender their ideology to the commercial art circles, damaging the fundamental values of pure arts and its artists in the end. Naturally, bi-polarization happens with the speculative invest custom in Korean art market. The speculative custom inevitably separates the commercial-based market from the pure art pursuing market. The segregation is not beneficial to Korean art circle as it sets bubble price upon the less artistic but commercially inclined works without giving full consideration of contents itself. The genuine values of pure-arts, on the other hand, neither receives proper attention nor price.
However, the biggest problem that should be addressed is the degrading of artistic eyes among the public. As narrow-minded focus laid upon the commercial side of art only, the public is losing appreciation of artworks from the pure art circle, which is clearly shown in the price downfall of Korean traditional art pieces. The phenomenon is directly linked to the Western arts boom since `70s. The shift in housing, from traditional *Kiwa* to apartment, also caused the shift in taste of art, from Korean artworks to Western paintings, since artworks are indispensable to decorating home. The increased demand for Western oil painting from the public threw an axiom for current auction markets: The more supply of the Western pieces, the better acquisition of commercial profit. Thus, the public art collectors are deprived of chances to develop the eyes to appreciate genuine value of Korean traditional artworks.
To begin with the speculative custom in art market would end up gravely degrading the fundamentals of Korean arts. As the auction market tends to reflect more gold-seeking characteristics, the auction itself will better treat well-sold and famous artists, which entails the consequence of generating the dominance by the commercially motivated artists. Then the pure artists will become impoverished. They cannot but surrender their ideology to the commercial art circles, damaging the fundamental values of pure arts and its artists in the end. Naturally, bi-polarization happens with the speculative invest custom in Korean art market. The speculative custom inevitably separates the commercial-based market from the pure art pursuing market. The segregation is not beneficial to Korean art circle as it sets bubble price upon the less artistic but commercially inclined works without giving full consideration of contents itself. The genuine values of pure-arts, on the other hand, neither receives proper attention nor price.
However, the biggest problem that should be addressed is the degrading of artistic eyes among the public. As narrow-minded focus laid upon the commercial side of art only, the public is losing appreciation of artworks from the pure art circle, which is clearly shown in the price downfall of Korean traditional art pieces. The phenomenon is directly linked to the Western arts boom since `70s. The shift in housing, from traditional *Kiwa* to apartment, also caused the shift in taste of art, from Korean artworks to Western paintings, since artworks are indispensable to decorating home. The increased demand for Western oil painting from the public threw an axiom for current auction markets: The more supply of the Western pieces, the better acquisition of commercial profit. Thus, the public art collectors are deprived of chances to develop the eyes to appreciate genuine value of Korean traditional artworks.
Solution 1: Fostering expertise of own
The problems investigated above are quite complex. However, instead of facing frustration from the critical view, amenable changes to enhance the auction market should also be looked after.
For a fluent employment of newly-rising artists, a strong need for fostering contemporary art expertise in auction exists. As mentioned earlier, Korean auction market should especially supply more expertise in contemporary art circle. Unable to furnish self-sufficient contemporary expertise of auctioneers and curators for even domestic auctions, Korea should benchmark art institutions of the Sotheby and Christie, the two most prestigious auction companies around the world. They founded their own auction schools to educate auction process as well as artworks and art history. Youngsters around the world fly to the auction schools to become a professional auctioneer, and Korea is not the exception.
Many professionals in art field advises that it is always vital to have auction institutions of own by domestic auction companies to better produce a true expertise thorough at Korean art market to find new artists. For example, it is clear that great talents and potential of Korean obscurities can be better discovered by Korean auctioneers than Japanese ones. Practically such efforts are made by Korean auctioneers. “Cutting Edge,” a Korean brand-new auction for newly-rising artists, is managed by the verified auctioneers at Seoul Auction. To encourage such customs of “Cutting Edge,” it would be much convenient and prospective if Korea has own institution to foster expertises like the Sotheby and Christie.
Not just lingering on the realization of the importance of establishing Korean art auction institutions, a more concrete plan to actually set up the educational system for fostering expertise should be ensued. Institutions would be valuable, but they are not as effective as having educational system at university level. In Europe, auction and art market related educational system is sophisticatedly arranged. “In most of the European universities, art is related to every major. One can major in art related to such field of law and business,” mentioned Dr. Boll. However in Korean universities the efforts to combine art with practical studies are remarkably lacking. Only Daegu Catholic Univ. has a class under the name of “Art auction and practice,” however, quite unfortunately this is also restricted to the liberal art course of Art Dept. The present inexistence and negligence of art related majors would only widen the gap between the demand and the supply of experts in the art auction market in the future. Therefore stretching endeavors in comprehension of art in the perspective of practical majors is by all means promptly needed among Korean universities.
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| Korean second highest bid <The Flower and Jar> Kim Whan-ki 3billion won | ||
| | | |
Solution 2: Enhancing Artistic eyes of the public
Then what should be done to reverse the situation of public inclination toward commercial artworks and negligence on pure-artworks? The key is to elevate appreciative eyes of public and a search for the ways for elevation is requested.
One search can be made from the art market, restraint of the solely profit-seeking behavior by introducing pure arts to the public that are not in great demand or profit will guide the public to the right notion. “In foreign art markets such as the UK, the market leaders fervently strive to minimize the gap between the commercial and pure-art market by holding ‘Frieze art fair.’ It usually displays contemporary arts which are quite abstract and experimental for public to understand, meaning non-commercial art market. However, as time goes by, the public start to respond and enjoy the works in the Frieze. This means upgrade in both appreciative eyes and art market as a whole,” mentioned Kim.
The second answer can be found from the public themselves. The public must possess strong motivation to discover the artworks that they can truly enjoy. If they have such motivation, they will voluntarily study artworks and visit galleries or art fairs much often and it will upgrade their artistic standard and eyes. The efforts from above and below, if mixed, can certainly produce much prosperous art market and diversified contents in auctions, which will mark the Korean auctions as competent markets.
* * *
Numerous renowned sociologists predict from the examples of European counties and America, that once a society reaches a certain level of economic wealth and prosperity, its people are destined to seek for satisfaction for life by means of cultural factors. In the cultural stage, fulfillment in cultural aspects in life becomes the key to our happiness. “Our society is slowly but definitely veering from the stage of economically striving point to cultural fulfillment point, therefore it is crucial for us to acknowledge and participate in this inevitable progress,” reminded So. Our society is also anticipated to enjoy the cultural prosperity, therefore needs to enhance the cultural understanding and foster the artistic eye. Especially, the art auction could be viewed as a process of our society’s transition from economic stage to the cultural, because it is the combination of economic price system and art. For this unique feature of art auction market, it is expected to play a leading role during the cultural flow for the next few years as well as when our society reaches the complete cultural stage. Therefore it is your time and turn to pay further attention in this specific field and get involved.
Box 1: 2007 KIAF (Korea International Art Fair)-6th Exhibition
1 Date: May 9-13, 2007
2 Place: COEX Convention and Exhibition Center, Pacific Hall and Indian Hall
3 Guest Country: Spain
4 Participating Galleries /Artist: 208 galleries from 18 countries/13,000 from home country and abroad
5 Number of Works: around 5000 pieces in painting, sculpture, print, photography, media
6 Total sale/visitors: 17.5 billion won/65 thousand people
7 Interview with Choi A-reum, Manager of KIAF organization committee
“The motto and ultimate goal of art fair differs from that of auction market or biennale. Fair is basically for the public to come and enjoy as well as buy artworks conveniently. We try to introduce promising artist to the art market and support them. Especially, this year we planned various events from portfolios of new artist as well as lectures from art experts.”
Box 2: All You Need to Know about Art Auction
Box 3: Prestigious Auction Houses: Christi and Sotheby
<Christi>
-History: Founded by James Christie when he conducted his first sale on 5 December 1766.
-Current: The world's leading art auctioneer with global sales in 2006 of 4.67 billion dollars,.
-Categories: Christi offers over 600 sales annually in over 80 categories, including all areas of fine and decorative arts, jewelry, photographs, collectibles, wine, cars
-Worldwide: Christi have 85 offices in 43 countries and 14 salerooms around the world including in London, New York, Los Angeles, Paris, Geneva, Milan, Amsterdam, Tel Aviv, Dubai and Hong Kong
<Sotheby>
-History: On March 11, 1744, Samuel Baker, founder of Sotheby's, held the first-ever sale under his own name.
-Current: Sotheby's became the first international art auction house to hold auctions on the Internet.
-Categories: fine art, antiques, books, jewelry, toys, dolls, and other collectible memorabilia.
<Requirements>-For a certain artwork to be dealt through art auction, there are four requirements.
1) Rarity: the reason why people show interest to art pieces is because unlike identical products art is unique
2) Freshness: if an artwork resembles such other it is hard to intrigue the publics’ attention
3) Authentic: auction houses have to prove the genuineness of the product
4) Provenance: who owned it before is important as well
<Constituents>
-auction houses, advisors, art banks, detectives…
1) Auction houses: the actual components of art auction
2) Advisors: gives advises about artworks to the private collectors
3) Art bank: navigates the customer’s through the art market by fund
Kim Jeung-hyun, Suh Hae-nle
doloveme10@yonsei.ac.kr,sunalways@yonsei.ac.kr