By Abby Schultz
June 16, 2021 3:31 pm ET
LiveArt.market—a peer-to-peer art trading platform that offers price transparency and circumvents intermediaries such as auction houses and galleries—officially went live on Wednesday.
The platform, founded by one-time auction house and art market execs, gives collectors the ability to buy and sell art privately or publicly, with estimated prices determined from data analysis of “millions of auction results and other data points” developed by LiveArt, according to the company.
The goal of this effort is to solve three major issues in the art world that stop collectors from buying or selling and keep the vast majority of art works off the market, according to Adam Chinn, co-chairman of LiveArt, and former chief operating officer at Sotheby’s, and Boris Pevzner, LiveArt’s CEO, who previously developed Collectrium, an art collection management system bought by Christie’s in 2015.
These issues are difficulties in pricing a work of art, the tension that exists for collectors between privacy and the desire to sell, and transaction costs.
“The major problem that in a way we’re trying to solve is the illiquidity and opacity of the art market,” Chinn says. “If we’re successful, what we are going to do is enlarge the pie and everyone will win.”
By Chinn’s estimate, if LiveArt can increase the supply of art on the market by one percentage point, it “would be larger than Sotheby’s and Christie’s combined.” That’s not necessarily the goal, he adds, but it gives a picture of how illiquid the art market currently is.
The live trading platform is the latest iteration of LiveArt, a digital business co-chaired by Chinn and John Auerbach, a former senior e-commerce executive at Sotheby’s, Christie’s, and Kate Spade.
Initially, the company bought a popular, existing auction app (Live Auction Art) that tracked sales, and expanded it to include the capability of providing real-time and historically traded works of art against other artists, or other assets, such as stocks. The app has about 22,000 monthly users on average, up from 3,000 when LiveArt acquired it.
In May, the company enabled users to upload their own collections into this artificial-intelligence platform, which they call LiveArt.ai. The platform allows users to learn the value of each work in their collection based on machine learning. Until now, most collectors relied on specialists at auction houses or galleries for that insight.
“If machine learning and AI is as powerful as we think it is, that step is—if not solved—significantly ameliorated,” Chinn says.
The peer-to-peer trading platform that went officially live today adds several functions that allow collectors to buy and sell either publicly or privately. Collectors on the platform can choose whether to flag an item in their collection for sale, and whether they want to do so privately or publicly.
The platform routinely includes “drops,” which are featured artworks or collections, and a section called “discover,” which allows users to find artworks listed for sale.
Jean Michael Basquiat’s Back of the Neck, 1983, a screenprint with hand-coloring on paper, one of an edition of 24, is a current drop being offered with an estimated price of US$1.98 million. As with all drops on the site, the platform includes detailed analysis of the work and the artist.
The Basquiat work is “public,” in that users can see the work of art on offer. But some artworks will be offered privately, including a piece by the artist Alex Da Corte that will be dropped on Thursday.
The work by Da Corte, whose monumental sculpture As Long as the Sun Lasts, is installed on the rooftop of the Metropolitan Museum of Art through Oct. 31, will be offered privately. That means prospective buyers (who are all vetted) will be able to view similar works by the artist online, and to get a sense of price, but they won’t know what specific piece is available to buy until they have been approved by the seller.
Offering this level of privacy is “fundamental to our model,” Pevzner says. “On the one hand, sellers want to display their artworks that are available for sale as widely as possible, on the other hand, they don’t want to actually expose the artwork that is being sold.”
This function prevents an artwork that doesn’t sell from being known to the market, and therefore shunned by future potential buyers. And it prevents a collector from being offered a work from his or her own collection, which can happen through the oddities of the opaque machinations of the market today.
A limited soft launch of the trading platform that began about a week ago among friends and family attracted nearly 1,000 objects with a value of about US$120 million, with sales taking place at a range of prices up to “the low single-digit millions,” Chinn says. Ahead of the official launch, total sales on the platform approached US$5 million.
The platform also provides a way to make it easy for a collector who lost out on a painting in a live auction, to buy a similar work with the press of a “buy similar” button against historical records of works by the same artist. Live auction results also could prompt a collector to sell a painting if they see that demand is spiking.
The cost of transacting on the site is 10% of a work’s value. That compares, for example, to a buyer’s premium at Sotheby’s in New York of 25% for works below US$400,000. The percentage declines to 20% for the portion of the sale between US$400,000 and US$4 million, and declines again to 13.9% for the portion above US$4 million.
Later this month, LiveArt will step into the primary market as well with an exhibition of works by 13 emerging artists. In primary sales, proceeds will be split between LiveArt and the artist in a way that’s more favorable to the artist than a traditional gallery, Chinn says.
By making price discovery easy, enhancing privacy, and reducing costs, Live Art hopes to free up supply, bringing new works to market that collectors otherwise might not have sold. “This is new supply into the market that people will now feel comfortable [selling], are willing to sell and have a way to sell,” he says.