Management of Art Galleries – Business Models - Universität St.Gallen

Conceptual Basis 37 / 225analysis of the business configuration of firms competing in the art gallery market. This helps toidentify critical success factors and to investigate how firms can operate successfully in themarket. Furthermore, the model has frequently been put to the test in the real world.Consequently, we are convinced that the model’s findings are clearly practical. This will help artgallery managers to draw conclusions from it. Finally, the application of the business modelconcept not only helps art gallery managers. The application also contributes to the refinement ofthe concept and adds to its value as tool for analysis.2.3 The Art MarketAn art market has not always existed. In its early development, art solely existed and no marketwas formed around it. However, eventually, when a desired commodity like art is created andmade available, a distribution system forms around it (Frey, 2003; Frey & Pommerehne, 1988;Frey & Pommerehne, 1990).The international art market today is the sole mechanism for conferring value onto art (Grampp,1989). With no real transparency, it is thus imperfect and difficult to access. There are variousplayers involved in the market but few with a precise job description. The market is perceived asglamorous and exciting, reminding outsiders of the fashion, film or media industry (Thompson,2008).The following describes an attempt to map the art market, identify its key players and describeits size.2.3.1 Art Market CompositionThe art market offers a broad range of collecting, buying and selling opportunities (Robertson,2005). The following list is an attempt to summarise items that are dealt on the market. Fifteenseparate categories (e.g. jewellery or prints) were identified, based on the specialist departmentsat auction houses, such as Christie’s or Sotheby’s. Christie’s consists of 87 specialistdepartments, Sotheby’s of 84; these are clustered into the broader categories wherein art is dealt(Christie's, 2010; Sotheby's, 2010). Both auction houses offer the world’s greatest platform fordealing and hence showcase a broad range of categories. Within the categories several sectorsare identified. In the category “Paintings & Drawings & Sculpture”, for example, we find sectorssuch as 19th Century European Paintings or German and Austrian Art or Post-War Art. Ofcourse, this list is not complete; however, it demonstrates the breadth of the art market ingeneral.Table 14: The Composition of the Art Market by Category and SectorCategoryAncient and EthnographicArtsSector- Aboriginal Art- African & Oceanic Art- American Indian Art- Antiquities- Middle East