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How Artsy finally convinced galleries to sell fine art online

For 13 years, the Mike Weiss Gallery was a thriving member of the Chelsea art world, hosting over 100 exhibitions and participating in local group shows. But in October of last year, Weiss and his wife Virginia Martinsen decided to shutter their physical location. Rent was rising, nearby construction was becoming a major headache, and the ever-expanding number of art fairs was drawing attention and customers away from galleries. The woes of the Weiss Gallery are widespread. From London to Los Angeles, galleries that survived the decades of market crashes and changing tastes have gone out of business in the last few years.

Lingering contractions from the economic crisis of 2009 means the traditional art market, especially smaller galleries, has seen precious little growth over the last decade. But just as importantly, Weiss says, they felt the way in which people discovered and purchased art had shifted. “We used to get a thousand people on a Saturday,” said Weiss. “The walk-in traffic dropped off.” The ascendancy of the internet, the couple believed, had transformed buyers’ behavior. “It used to be unthinkable that a collector would buy a work without seeing it in person,” said Martinsen. “Over the last few years it was almost the opposite. People would buy work from the gallery online and not come in for the show.” While the growth in the traditional art market has been flat, the world of online art sales is booming.

Just five years ago, many gallery owners and auction houses were still skeptical of bringing collections online. “There [are] many sites like Artsy that want to take your inventory and put it online. In an older period, that would be called ‘burning your inventory,’” wrote veteran art critic Anthony Haden-Guest in 2014. The value of a painting or sculpture is often tied to its singularity — a unique object that is inaccessible to all but its owner. Creating a digital version anyone could copy or distribute undercut your control. “The idea of selling on the net is not working,” Haden-Guest wrote.

Nathan Ritterpusch, who has been making a living as a painter for the last two decades, agrees. His work hangs in galleries and is sold by major auction houses. For many years, he kept it offline. "The fear was that putting my art online would devalue the work. That was certainly the case with Facebook. And I was told by the gallery that I worked with at the time not to,” says Ritterpusch. “There is a very specific way in which you introduce work, and you have to convey a sense of privilege to certain people. Maintaining a sense of scarcity and uniqueness is crucial."

But that dynamic is changing quickly. Today, transactions conducted over the internet are helping to power record-breaking sales, even as the merchants behind them are looking to downsize their physical footprint. Christie’s, one of the largest auction houses in the world, announced in March of this year that it would close down a space in London and shrink another in Amsterdam while ramping up online auctions. “A lot of gallery owners are asking why they should commit to space when rent is so high and people can find you easily online,” says Carlo McCormick, a veteran art critic and curator. “Even in a successful gallery, most of the time, the space is empty.”

The move online has been one of the critical forces shaping the industry over the last decade, a disruption that happened slowly, and then suddenly. “It’s a huge change in what galleries have done. It’s been the biggest trend in the art market, next to art fairs, over the last ten years,” says Clare McAndrew, a leading art market economist. “The biggest driver is the wider acceptance of e-commerce. This is how collectors buy everything else, so why not art?” After closing their physical space, Weiss and Martinsen focused on crafting an online business, Gates of the West, and cultivating their brand through social media.

This new paradigm is powering the success of Artsy, a New York City-based startup that this morning announced it had raised $50 million in fresh venture capital. The company’s offering is far more open and approachable than the traditional art world. Every piece is available through a search engine that can filter by style, time period, or price. The service uses algorithms to understand what kind of art appeals to users and then recommends other works they might enjoy, or buy. Instead of the rarefied, sterile walls of a Chelsea gallery, users swipe to browse. Artsy makes shopping for art as unassuming, and as pedestrian, as using Tinder.


The world of fine art, like music or film, typically has several layers between the creator and customer. Sure, some wealthy people mingle socially with artists, visit their studios, and purchase directly. But for most artists, getting in front of clients with serious money means finding a gallery to represent them. For decades, galleries were the physical retailers that powered the industry. They gave artwork a carefully curated exhibition space visited by a steady stream of potential buyers. Recent estimates put the number of galleries in the US at around 5,000.

In the past, collectors who wanted to educate themselves about art and refine their tastes often turned to advisors. These were industry insiders paid to school collectors in what was hip, get them invited to exclusive showings, and recommend emerging artists whose work would be appreciated in cultural cache or price. “It’s a funny thing about the art world — most people don’t trust their own taste,” said McAndrew, who authors a widely read annual report on the state of the art market. “When you start investing a sizable portion of your wealth into these works, you want some reassurance you’re making the right decision.”

Even the well-heeled say that walking into a gallery can be an intimidating experience. “I don’t look like the art world’s dream buyer,” says Alan Tisch, a 29-year-old startup CEO and a member of the über-wealthy Tisch family, which has an entire wing of the Metropolitan Museum dedicated in its name. “If I walk into a gallery on a Saturday afternoon wearing sandals, sweatpants, and a T-shirt, you kind of feel shunned. The vibe is, ‘What are you doing here, you don’t belong. This art isn’t for you.’”

Through its website and mobile app, Artsy offers users an opportunity browse through its catalog of artwork without ever stepping into a physical gallery. If you create a profile, Artsy will send you personalized recommendations about new artists you might like, or alerts about works being put up for sale. Once you sign up, you can follow institutions like museums, galleries, auction houses, and art fairs. The system can send you email alerts and push notifications about upcoming events and sales. You can also favorite individual works, the equivalent of a “Like” on Facebook or thumbs-up on Pandora. All that data is used by Artsy’s algorithms to decide which art and artists it should recommend to you.

For many young collectors, this process of self-guided education is preferable to hiring an advisor or browsing the gallery circuit. “Even galleries I visited for openings and events, even places where I know the gallerist, even then, you don’t always feel welcome. If you get a ‘hi’ in a New York gallery, consider yourself lucky,” says Kinjil Mathur, the chief marketing officer at Squarespace. “Being able to do your own research on Artsy is incredibly helpful. You can contextualize a work in a way that just isn’t possible in the physical world.”

Tisch, who has been using the service for about four years, says he messages galleries through the mobile app when he’s interested in a piece. They get to see his collector profile, which typically elicits a much warmer response. “With Artsy you can communicate with galleries without the feeling of anxiety,” he says.


In some ways, visual art seems like the perfect product to sell over the internet. Paintings and photographs can be easily shared on a website or over email, and even sculptures can often be captured and shared as flat images. What’s more, flash sales and auctions, two staples of e-commerce, are common practice in the art market. Yet, even late into the 2000s, the fine art market was largely absent online. Why was it so difficult to convince galleries to bring their works online?

The answer is volatility. Unlike a cast-iron pan, a paperback book, or any of the myriad items you can buy on Amazon, the value of artwork is highly subjective and constantly in flux. The opinions of critics and academics, the exhibitions put on by museums, and the purchases made by celebrities all influence the cultural matrix that underpins a price.

If a work of art sells for too low a price or fails to move for a long time after being put up for sale, it can be read as a sign that interest is waning, and future prices for the artist’s work will drop. If the work sells for too much, some may see the market as overheated and hesitate. If a collector buys a work and then promptly sells it six months later, even at an equal or higher price, that can be a negative signal of an artist whose fame is fleeting. In order to maintain control of the market, galleries and auction houses work to tightly control every aspect of a sale. So the idea of allowing an anonymized online platform to sell their works to strangers was terrifying.

Artsy co-founder and CEO Carter Cleveland grew up surrounded by high culture and numbers. The son of an art historian and a financier, when he enrolled at Princeton in 2005, he says he was shocked by the transition from a home full of fine art to the empty walls of his dorm room. So, he set out to decorate, but he was surprised to find there was almost no fine art available to browse or purchase online. “I thought, ‘How does this not exist? Maybe I could build this,’” he recalls, sitting in Artsy’s office above Canal Street in Manhattan. “I was very naïve at the time. I didn’t realize that it wasn’t because no one had thought of this before. It’s because the industry is really, really resistant to change.”

Carter’s first project was building a system that could learn to recognize similarities between art and make recommendations to users based on their taste. Cleveland secured funding through startup competitions and from friends and family, and by 2008, he had built a basic system that could take a little bit of data about what kind of art a user liked and spit back a useful recommendation for another work they might enjoy. However, when he took it around to galleries and asked if they would consider adding their collections to his project, the response was icy.

“The reaction was, ‘What are you doing in here? Why would I ever associate my gallery and our artists with some 22-year-old and his website?’” Cleveland says with a laugh. “Reality sets in.”

Artsy wasn’t the only startup trying to convince galleries that sharing their inventory with an online marketplace was a good idea. Companies like ArtSpace, Paddle8, and ArtNet were all offering to sell pieces on behalf of galleries for a small commission. Despite the promise of a bigger audience, however, galleries were still hesitant. The goal for galleries, says Andrea Hill, who served for several years as head of gallery relations at Paddle8, is to make sure that an artist’s individual market is carefully protected. “That want to carefully track inventory, anticipate auction cycles, and avoid becoming bystanders should an artist’s market get overheated, at which point there might be a price correction.”

Just as galleries will give first crack at a hot work to a collector whose cache will boost the artists brand, they will ban collectors who flip artworks too quickly or at the wrong price. “It’s a gray market,” explains Hill. “A gallery would prefer that if you bought a piece from them and want to resell it a few years later, you would go to them first.” A sale can be done quietly, through a private network, protecting the future price.

By 2010, Artsy was two years into its efforts with almost no galleries on board, and it was running low on cash. They company was saved by a check for $1.25 million from Thrive Capital, a venture firm founded by Joshua Kushner. (Thrive also participated in subsequent rounds of funding, and led Artsy’s $18.5 million Series B. Kushner sits on the board.) That investment powered them through to a meeting with Larry Gagosian, an influential art world dealer who had worked with Cleveland’s father. “Through family contacts we got Larry Gagosian and Pace Gallery,” says Cleveland. “They were buying into the vision that somehow the art market would come online. Once we had a few top names on, all the rest followed.”

Artsy also pivoted its business model to make it more attractive to galleries. It moved away from the direct sales and commission model, instead returning power to galleries by allowing them to withhold pricing information and take control of the sales process after a customer expressed interest. Artsy would generate revenue by selling gallery subscriptions, which came with tools to showcase their artists, highlight upcoming programming, and list their art for purchase. Artsy also makes a commission on items it helps sell at online auctions. In addition, it has also begun to tap its user base to source works collectors want to sell, a service for which auction house partners will pay an additional commission.

There are numerous works available directly for sale on Artsy, ranging in price from $500 to more than $50,000. But for the vast majority of pieces, collectors use Artsy to inquire directly, then take the process offline with the gallery. Instead of playing the role of an aggressive disruptor, Artsy has positioned itself as a tech platform that can expand galleries’ reach. “You’re not some flame-throwing revolutionary, but rather a partner that works with industry to expand the market,” said Sebastian Cwilich, a former Christie’s executive who now works as Artsy’s president and chief operating officer. “Most people who can afford to buy art today don’t do it. We think there is an opportunity for the market to be at least 10 times bigger.”

The strategy paid off. When Artsy launched to the public in 2012, it had a little over 20,000 images from 275 galleries and 50 museums. Today, Artsy is far and away the biggest player in the online art market, with over 800,000 works from over 4,000 galleries. Not only have gallery owners come around to embracing Cleveland’s online marketplaces, 1,800 galleries now pay Artsy between $425 and $1,000 a month to be members. The company helped to put on 41 auctions last year, and is on track to participate in over 160 auctions in 2017. And Artsy says that it facilitates over $20 million in art sales each month, with an average distance of 3000 miles between the buyer and seller.


Alongside its gallery connections, the core of Artsy’s product is a genome for predicting what kind of art you may like; think of it as a Pandora for art. Eight years ago, as a reporter covering the New York City startup scene, I signed up for Artsy’s weekly email. I ignored most of them, but every once in a while I would click through, exploring Artsy’s website, favoriting works I liked, and following artists who seemed to activate my visual pleasure centers.

Over time, the recommendations honed in on my taste. It offered up the chunky brushstrokes of Japanese painter Aine Kinashi, the bright geometries of Cuban painter Waldo Díaz-Balart, and the sardonic, stylized pop of American artist Ed Ruscha. One piece of art at time, the algorithm mysteriously honed in on my taste.

I stopped by Artsy’s office recently to get a sense of how The Art Genome Project worked. It’s run by Madeleine Boucher, who graduated from the University of Chicago with a degree in art history before finding her way into the startup world. “The genome is the search-and-discovery tech that powers virtually all of Artsy’s products,” she said.

The genome process starts by manually assigning traits. Many are purely factual: this is a painting; this is a watercolor painting; this is watercolor painting from Japan. Others are more subjective: giving the algorithm data about which works are concerned with religious themes, evocative of memory, or laced with humor.

Each artist and each work is entered into the genome by a team of seven genomers, a collection of art historians and academics who spend every other Friday in a conference room at Artsy’s office arguing over which traits are best for a particular work and at what value.

Each gene is also assigned a relative weight between 0 and 100 that describes how central it is to the character of the artist or work. So, for example, Pablo Picasso gets 100 for cubism, since he pioneered the style. Mondrian, who encountered cubism and experimented with it, gets a 30. It is exhaustive work. Over the course of a decade, the team has given a genome to hundreds of thousands of pieces of art.

Artsy’s algorithms take the weight of each gene, look at how often it appears in the pool of artists and artwork, and uses that to judge how significant that characteristic is. It then triangulates relationships between artists and works based on those characteristics. Artsy doesn’t use the collaborative filtering techniques common to services like Amazon and Spotify, because it wouldn’t mesh with the singular nature of works of art. “With Amazon you can say, ‘people who bought this kitchen knife also liked this plate,’” explains Boucher, “but that assumes that you have an almost unlimited supply of each product to recommend, whereas typically we have one.” Since most of the images on Artsy represent unique objects, the algorithm has to be able to compute similarity between objects, instead of similarity between user’s behavior.

Of course, for many serious art collectors, taste is only part of the consideration. Wealthy collectors treat works as investments, and so the company is looking into ways it might expand the range of its recommendation algorithms to what art will likely accrue in value. Art advisors were, for decades, central to the process of helping collectors decide what to buy from this perspective. But here, too, Artsy is looking to replace humans with software.

The company recently acquired a startup called Art Advisor and made that company’s CEO, Hugo Liu, into its chief scientist. Liu’s co-founder was Lucas Zwirner, son of the influential gallery owner David Zwirner. At Art Advisor, Liu and his team built a system to try and predict rising stars in the art market. “We looked at publicly available data from things like gallery shows, auction results, museum placements, and private collector ownership. Then we stitched that all together with machine learning to make certain evaluations about an artist’s cultural significance and potential for future value.”

Liu says he sees a lot of new collectors coming out of tech and finance who want to support young and emerging artists. But they also want to make a smart purchase. They want something to help inform their decision beyond just their taste. “We are trying to help them be patrons of the art, but data-driven patrons,” he explained. “What if Artsy could suggest an artist that would resonate with you, and also make a prediction about whether or not they were worth collecting as an investment?”

The rise of digital music led to the collapse of the retail record store, and the ever-rising tide of e-commerce has been devastating to traditional malls and department stores. But the upper echelon of the art world is still predicated on personal relationships, physical galleries, and exclusive events. “It’s been a very slow process, changing the mental state from back rooms and handshakes to online and transparent,” said Ashley Moellering, a veteran of Sotheby’s and Christie’s. With just a handful of buyers and sellers operating in the world of multimillion-dollar works, that part of the market is already very efficient. “A lot of big deals still go down in the back room over a handshake, but the lower-value artwork has definitely moved online.”

The conversation has moved there as well. “Most dealers feel like even if they're not selling on Instagram, they have to maintain a presence there and be posting about the fairs and openings they are going to, just to stay relevant,” says Moellering. Instagram, as the world’s largest image-based social network, has become the de facto online embodiment of the art world. To Moellering, that makes perfect sense. “The hyper-curated reality presented on Instagram is really an extension of the gallery or museum model.”

A post shared by @brettgorvy on

The disruption to the traditional art market is opening up avenues for artists and dealers to become more independent. In November of last year, Brett Gorvy, then an executive with Christie’s, posted an image of a Jean-Michel Basquiat painting up for sale on his Instagram before boarding a plane from New York to Hong Kong. By the time he landed, three clients who saw the Instagram post had texted to inquire about buying the piece. A few days later, one of them bought it for $24 million. Gorvy has since left Christie’s to start a new venture that relies as much on Instagram as physical gallery spaces and live events.

Artists like Nathan Ritterpusch, whose work sells for more modest sums, have begun to experiment with the online market. A few of Ritterpusch’s works are available on Artsy, and he’s been focusing on building up his brand on Instagram, where collectors have snapped up several paintings. The trick, he explains, is to play it coy. “If you look like you’re there to sell things, it doesn’t work well. Just like the rest of the art world, it’s about how your brand yourself.” His feed is a mix of works in progress; studio visits to other artists; trips to openings and fairs; and the occasional hint at commerce, the rare offering to transact. Around Christmas, he posted a finished painting with a brief caption. “Fresh from the framers. Wanna hang?”

Not everyone is excited about fine art moving online. “It scares me that so many people are actually buying art off of a picture,” says McCormick, the art critic. “For most people there's an endless scroll of images coming in across Twitter, Facebook, and Instagram. Well that's not art. Even if you're looking at paintings and sculpture, that's not art. Those are pictures of art,” says McCormick. He believes a lot of younger collectors, especially those buying art without seeing it in person, don’t fully understand the difference. “We're losing the primary experience of standing before painting. Of going out onto the street and seeing a work in the context of the surrounding neighborhood.”

I exemplify the new breed of customer McCormick is afraid of. Over the years, I’ve taken screenshots of hundreds of works that Artsy recommended to me, putting them into a folder I use for my desktop backgrounds. I’m not at a point where I can afford to buy art, but someday I hope to be.

“In terms of democratizing the market and expanding the audience, it has worked quite well,” says McAndrew, the art market economist. “The online market is growing while the market as a whole is falling, so it’s a bright spot.”

Artsy has gotten plenty of direct criticism for trying to bring works online. “When I was trying to bring galleries onto the platform, I heard that sentiment a lot: that if art is more accessible, it’s worth less,” says Cleveland. Cleveland prefers to see today’s culture, and its obsession with the sharing on social media, as an opportunity. “We do live in an age where people spend so much of their lives consuming images on their phones. For a lot of people, once you’ve seen the beautiful sunset or the hot person a hundred thousand times, you’re ready for something different.”

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