Art Market Insights: Big Data & AI

Arius Talks Big Data & Artificial Intelligence at Deloitte’s 11th Art & Finance Conference

Earlier this month Arius CEO, Paul Lindahl, took to the stage at Deloitte’s 11^th Art and Finance Conference, participating in a panel discussion about the role of Big Data and AI in the art world. As can be expected from a world-leading conference, Paul was amongst a stellar line up of panelists, including Henry Blundell, Master Art; Catherine D. Henry, Palpable Media; Zohar Elhanani, MututalArt; Oliver Zephir, Technoport SA; and Sophie Neuendorf, Artnet.

With a focus on how to improve analytics, financial decisions & experience in the art market, Paul and fellow panelists addressed some of the biggest challenges, and opportunities in this realm. Evidently, the landscape is changing at lightning speed and with the next Deloitte Art & Finance Report due to be published in 2019, we’re keenly anticipating its release.

Ahead of next year’s report, we thought we’d share our perspective on Big Data, what we’re most excited about, and where Arius has an important role to play.

 

What Exactly is Big Data and is it Already Here?

Research suggests the adoption of Big Data in the art world is still in its infancy, especially when we look at technical definitions of what “Big Data” means. In most basic terms, “Big Data” encompasses large volumes of data, collected at high velocity, in a variety of formats, often including unstructured and difficult-to-analyze data, like audio clips or social media posts.

Albeit early days compared to other industries, the art world is seeing some exciting Big Data players emerge. So far, developments are mostly in relation to recording transactions and predicting valuations, as well as making personalized recommendations for artwork based on user behaviour and trends.

 

What problems are the art world trying to solve exactly?

While these ideas sound like useful tools for more convenient art shopping, the core drivers for Big Data disruption run a little deeper than providing a seamless buying experience.

 

The Need for Transparency

Understandably, the power holders of the art market are typically those with hard-earned reputations, who can be trusted by the wealthiest of collectors, and have a great depth of knowledge, with insight and connections to private auction circles. With this comes an air of mystery and a great deal of secrecy.

With 53% of secondary market art sales being private [1], trust in transactions is being heavily placed on such reputations and word of mouth information within the art market. Therefore, art-world Big Data organizations are focusing on utilizing technology to improve transparency around transactions and value of a piece; i.e. what is being sold, when, for how much, and to whom?

Christie’s recently announced [2] that Artory’s blockchain registry will securely record all public information regarding the sale of each lot in the 2018 American Modernist Masterpieces auction. This data will include the title, description, final price, and date, producing a digital certificate of the transaction for Christie’s. Meanwhile, Codex has secured partnerships with around 5,000 auction houses that have joined their blockchain registry.

In an effort to develop standardized reports that strengthen provenance, which will inevitably help to determine current or future valuation, firms like Verisart, Fresco, Codex, and Artory are starting to gain traction with Blockchain based provenance technology.

However, there is a lot of internal skepticism as to whether improved transparency will have a positive impact [3]. While we may seek comfort in seeing similarly opaque markets, like real estate and wine collecting, being opened up with technology disruption, there is a stigma that data and technology necessitate and rationalize decision-making. Some fear this will remove the ‘element of surprise’ which is seen as essential for the art market, as this world thrives on its esoteric allure [4].

The flip side is that access to knowledge could empower more collectors than ever before and help grow the marketplace beyond the geographical constraints of few core art hubs in the world. We’re excited to see whether the attraction of a hungrier marketplace will help ease the transition towards transaction and valuation information becoming readily available.

 

Combating Art Fraud

Another challenge facing the art world is fraud, Interpol estimates that 6 billion dollars’ worth of fraudulent art is absorbed each year [5]. Understandably, with the risk of fraud being significant, collectors and financial lenders may continue to favour other investment assets, despite art earning a reputation for garnering unprecedented returns, in lucky circumstances.

While companies strive to improve transparency around art transactions, it’s proving difficult for Blockchain provenance companies to validate information or even tell if a transaction is actually based on the real object.

Naturally, Arius sees an opportunity here, to aid verified transaction information with securely captured art object data that accurately maps the colour and geometry of a painting. With the potential to digitally fingerprint paintings and assign unique art identifier numbers based on our scan data, which would be difficult to manipulate unlike photographs, we hope to help address one of the biggest challenges with digital provenance records and set new standards for condition reports.

 

Improving Condition Reports

Knowledge can also be harnessed from physical art object data, allowing not only prospective buyers but also current owners of art, to make the best possible long-term decisions about their collection. Arius’ rich data sets record a painting’s surface to reveal details that would otherwise be invisible to the human eye.

Working with conservators and restoration experts, collectors will be able to treat any early signs of degradation before the painting visibly changes, which is one of the biggest threats to the valuation of a piece, in addition to how gut-wrenching it would be to see your favourite Monet wither and fade before your eyes.

Another exciting prospect for the art market is the ability to not only detect degradation early but to predict signs of decay. As Arius collects data for more and more paintings, we’ll be helping to record the art equivalent of a ‘cultural seed bank’. Working with conservators and leading players in Big Data, we look to be able to predict the life cycle of a painting’s surface, potentially calculating variable degradation rates of different artists’ works depending on where and how it’s kept.

 

Adjusting to a Generation Shift

 

 

 

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