The importance of building communities cannot be underestimated in the rapidly changing art world, driven by technology and the explosion of non-fungible tokens (NFTs) in the last two years. An audience is a social media following, but a community is a group of people working towards a common goal.
Art market economist and academic Magnus Resch has extensively researched the importance of communities and networks for artists.
Resch has a PhD. in economics and has studied at the University of St. Gallen, the London School of Economics and Harvard. In addition to lecturing at Yale, he has produced several publications on the economics of the art world. She has been featured in academic journals and major publications such as The Wall Street Journal, The New York Times, and Vanity Fair.
Resch recently spoke with Cointelegraph about his latest book, How to Create and Sell NFTs: A Guide for All Artistswhich explores the importance of building meaningful communities for artists and how to create and sell NFTs compatible with your artwork.
Cointelegraph: Dr. Resch, how important is building a community for artists in today's rapidly changing art world?
Magnus Resch: Community in the art world is important to the success of any artist, but being in the right place is even more important. In one of my most recent studies, I looked at thousands of communities in the art world to gauge their impact on any artist's success. The results were amazing: 99.9% of artist communities have no positive effect on an artist's career.
These communities, I call them "island networks," are made up of museums, galleries, fellow artists of the same level and fans or supporters. These groups mean well, but they will never have a real impact at the top end of the market. Instead, there is only one network that leads to success. For an artist striving to succeed, the goal should be to become a part of it. I call it the โholy groundโ.
CT: Can you share some key strategies for artists to successfully tap into this community you call the "Holy Land"?
MISTER: My study shows that the art world is a people business. Who you know matters more than what you do. In the absence of objective criteria that define what is "good art", the network intervenes to decide what is good art and what is not. That is why networking is so vital.
For artists, this means not spending all your time in the studio. Go out and meet the right people, at best those who are part of the holy land. Or put bluntly, artists are on their own and must accept that they are entrepreneurs running a business. Branding, marketing, and self-promotion are essential to your success and are more important than your art. Artists who wait to be discovered will fail.
CT: What role do social media and digital platforms play in helping artists connect with their audience and foster a sense of community?
MISTER: Social networks are the most relevant marketing tool for artists. They cannot depend on galleries to do the work, as most galleries are part of island networks and close after a few years. In fact, a third of all galleries never make a profit.
Getting into the Holy Land is difficult, as there are only a few places available per year. That's why building a brand is so important for artists. The easiest way to do this is through social media: 45% of art buyers consider social media to be the most important channel for discovering and finding artists. Offline gallery visits only follow in second place. I argue that any artist who is serious about making it in the art world needs Instagram.
CT: Has this changed with the rise of NFTs?
MISTER: You are welcome. NFT projects have allowed artists to learn what it takes to do it without gallery support. We have seen that the most important pillar in any NFT project is the community. Failed projects have misinterpreted the community as an "audience."
An audience is the next on social media. A community is a closed circle, a close-knit and active group of people working towards the same goal. They can meet on social media, but it goes further. Building a community is all about building loyal members who support an artist's idea. I believe in the future where artists will give their community voting rights, allow them to participate in projects, and exchange ideas and assets. This is considerably different from today's audience who simply like and follow but don't engage.
CT: Can you share some successful examples of traditional art institutions? and galleries that have adopted NFT and the impact it has had on their business?
MISTER: The biggest winners from NFT advertising were digital artists like Beeple, Justin Aversano, and Jen Stark. Digital art never played a significant role in the art market, being the least popular medium after painting, sculpture, and photography. And then all of a sudden some of these underserved digital artists by the market made a lot of money and sold at record prices. However, the real impact of NFTs is yet to come. NFTs will be the underlying technology to authenticate every piece of art, and not just digital art. This will fundamentally change the way art is traded. Without an NFT to prove the work is real, no one will buy the painting.
CT: What are the main implications of NFTs in the art market?
MISTER: So far, there have been none. We are only at the beginning of what is to come. I predict that NFTs will have a lasting impact, which is fourfold: Artists will exercise more control over their work and earn royalties from resales; more collectors will populate the market as it becomes more transparent; Institutions will find it easier to engage their communities and give them ownership through participation and ownership in governance. And finally, the art market will be more regulated for the better and therefore its value will increase. Clearly this will not happen overnight, as changes in the art world take time. We wait 5-10 years for NFTs to become the standard for how artworks are processed and authenticated.
CT: Can you talk about the common mistakes artists should avoid when entering the NFT space, and how they can set themselves up for long-term success?
MISTER: Most artists will never enter the NFT space as NFTs are not art. And those expensive celebrity-endorsed JPEGs often associated with NFTs will be gone. I don't even think we'll be talking about the term "NFT" five years from now, just as we don't even talk about mp3 anymore.
NFTs are the underlying technology that will be used every time artwork is transacted. In the future, it is not unlikely that the artist will record every painting that leaves a studio on the blockchain. So when it is traded, the artist not only gets royalties, but also knows who the new owner is. This allows them to work more independently and not be completely dependent on galleries to promote or authenticate their work. As a consequence, artists will earn more with each piece they sell.
CT: How can collectors effectively determine the value of works of art in today's dynamic market, particularly with the rise of NFTs?
MISTER: Most art is not a good investment. Almost all of the artists are caught in the island's webs and will not see an increase in value. For collectors who are purely interested in making money, they should focus exclusively on artists and galleries that make up the population of the Holy Land. However, if they are interested in collecting art for any other reason (and consider it a icing on the cake if the artist increases in value), the entire art market can be their hunting ground.
CT: Has this changed the price transparency and liquidity that NFTs facilitated?
MISTER: Many of those who bought NFTs as an investment were unable to make a profit on them. They have moved on to other investments. And as the hype faded, the real winners were those who bought works they liked and wanted to live with. Another phenomenon is also visible; we are currently seeing the merging of the traditional art market and some digital artists who found success during the NFT hype. Beeple, Dmitri Cherniak, Tyler Hobbs, Casey Reas, and Artblocks, who used to sell exclusively on digital platforms like OpenSea and cater to a native cryptocurrency audience, have now begun to showcase their works with established traditional players in the art market like Pace. Gallery. . A representation from Pace Gallery, which is part of the Holy Land, will help them manifest their value, even after the hype and cryptocurrency buyers have gone.
CT: If art is not a good investment, why should we buy it?
MISTER: Having done a lot of data analysis on the art market, one collecting strategy that has proven to be the most effective is to buy what you like, since you will most likely never make money on the art you buy. I call it "responsible buying": the notion that buying art is not only an exchange of monetary value but also a philanthropic act. Rather than put money into an asset, I donate it knowing that in all likelihood I won't be able to resell the piece. But by purchasing it, I am supporting the artist so that she can continue to create art, which inspires her community to continue this essential form of human creativity. For me it is a way of doing good, and it comes with an object that I love and a story to tell.
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