First published on June 22, 2021
Emerging artists are tricky because they can represent a walk into the unknown. Their Artist Market Values (“AMVs”) surge into rarified air and can seemingly reverse sharply, without warning. Because they do not have much auction performance data – and what is available may be inflated – understanding established patterns of behavior is paramount. There are many examples of emerging artist AMV performance, and they provide a basis that will enable you to translate today’s AMV into tomorrow’s ones.
AMVs are built on what we term Key Performance Metrics (“KPMs”) and taken together they provide a picture of why AMV is what it is. The typical emerging artist profile at auction will look something like this:
- Sale prices significantly higher than presale estimates.
- Sale of all offered lots.
- Outperforming similar emerging artists.
- Relative scarcity of lots offered at auction.
For an emerging artist, you should expect one of the following trajectories.
Type 1: The Typical Case
This is the most common trajectory for an emerging artist- a rapid ascent to a one, no more than two, Auction Cycle peak, followed by a sharp correction, and consistency thereafter.
- Downside risk at the peak is the norm not the exception.
- Type 1 artists are vulnerable to a sharp and deep correction.
- Correcting into a cold market is common and climbing out by no means assured, likely ushering in what could be a new normal.
Type 2: The Suddenly Arrived Case
A new trajectory has emerged. It applies to artists with no previous auction track records who suddenly arrive on the auction market. This is the characteristic of many artists born in the early 1990s. In these cases, what you see is no Type 1 buildup, but sudden, frenzied performance followed by a gradual decrease.
- The out-of-nowhere surge is accompanied by higher than Type 1 AMVs.
- This is a high impact artist with landing spot too early to call. Even with a Type 1 pronounced dip, there is a real possibility of a bounce-back.
Type 3: The Best Case
In the rarest of occasions, an emerging artist defies convention with an overheated AMV trajectory that holds up far longer.
While there is always a risk that an emerging artist will go from “next big thing” to “disappeared from the scene” quickly, holding AMV for over a year is a very good sign.
- In this case, the overheated AMV persists over multiple periods.
- Auction Cycle to Auction Cycle changes are relatively more gradual and drops do not signal entry cold market territory.
Emerging artists represent the art market’s high risk/high reward bet. When making long-term decisions, avoid the hype. The art market is littered with the remains of the next “big” artist who was destined to become the next Warhol. Be wary, and always know where that artist is in the likely trajectory.
If you have questions on a particular emerging artist, please get in touch.