| BUSINESSWEEK ONLINE : MAY 17, 1999 ISSUE | ||||||||
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| PERSONAL BUSINESS
A Treasure Chest of Art Online? Moonrise, Hernandez, New Mexico, with its velvet-black sky and ghostly cemetery, may be Ansel Adams' most famous image ever. Yet because Adams made 1,300 prints from his 1941 negative, it's hardly remarkable that one turned up at the Works on Paper art show in New York in March and sold for a handsome $24,000. What is remarkable is that the same week another Moonrise print was auctioned off via the Internet, with a winning bid of $24,500. That bid, so close to the retail price -- and actually exceeding it -- is ''a good sign,'' showing new stability and trust, says Daile Kaplan, of Swann Galleries Inc. Until now, says the vice-president and director of photographs for the New York art auction house, which played no role in the Moonrise sales, ''Auctions on the Web have been like the Wild West. People have been trying to stake out their ground. And it's still inarticulated, in terms of the best way the industry can be regulated.'' There are, of course, reasons why the Moonrise online auction went so well. For one, seller Edward Carter Gallery of New York, took pains to hire Ansel Adams' one-time chief of staff to vet the photographs, For another, the gallery also used Auction Universe's Bid$afe escrow system to prevent fraud. With Bid$afe, buyers register credit cards with Auction Universe, which withholds payment until the buyer confirms satisfaction with the purchase. IS IT SAFE? Buyers thinking of jumping into art auctions online should take note: After all, fine art is already available at huge sites like Yahoo! and Amazon, plus specialty sites like Artnet and WCollect. The art world elite, Christie's and Sotheby's, have announced they'll launch auction sites by fall. And while probably the best-known online auctioneer, eBay, has recently bought Butterfield Auctioneers, presumably to compete in the high-end market. Yet while it all sounds great, how safe is it out there, really? Says Eileen Harrington, associate director for marketing practices at the Federal Trade Commission: ''Generally, we are very positive about electronic commerce in all its forms...but we have also been pretty aggressive at urging companies to use the mechanisms made available to them'' -- like escrow services. Adds Harrington: ''A reasonable consumer should know they're taking a risk if some seller asks them to go offline and send money in the form of a money order or check or cash.'' Already, the FTC has prosecuted a Florida man for using online auction sites to hawk computers he never delivered. And Kevin Pursglove, a spokesman for eBay, confirms that federal authorities have investigated his company -- which offers an escrow service called Safe Harbor -- as well. But the New York City Consumer Affairs Dept. is ''encouraged'' that eBay has now contracted with authenticators to conduct spot checks of sellers' goods. And, of course, some buyers and sellers simply reject outsiders' opinions altogether -- as in the case of a $34,600 Renoir painting study that art experts pronounced a fake and the buyer, according to Pursglove, both defended -- and kept. PRICEY PLAN. Are all escrow plans alike? No. With eBay's Safe Harbor plan, you're paying a third party a fee to hold your money. This escrow fee (separate from the seller's commission fee) is 5% of the sales price, up to $5,000, then 3% up to $10,000. The buyer who is unhappy with his or her purchase must forfeit that fee. Auction Universe has no third party for escrow. Rather, the company itself holds the buyer's purchase money and charges no fee unless the buyer elects the $19.95 gold plan, which offers a $3,000 insurance policy. Insurance otherwise is minimal. At the upper end of the auction spectrum, ''We don't need an escrow fund,'' says Sotheby's Executive Vice-President David Redden, ''inasmuch as this isn't an eBay situation in any shape or form.'' Instead, Sotheby's -- and Christie's -- are counting on theirs and their curators' good reputation as their major drawing card. ''On the selling side, we don't believe that fraud is going to be a significant issue,'' Redden says. He notes that Sotheby's knows its dealers and vouches for them. In fact, the auction house has contracted with 2,500 reputable dealers to sell ''every property that we currently handle,'' including high-end items. Most, however, will fall below $10,000 in value. Also planned: an online archive of each artwork's auction and price history on Sotheby's. On the buying side, Redden says Sothey's will protect itself by thoroughly screening bidders' credit situations, particularly where large sums are involved. Redden says he sees online auctions as simply an extension of what catalogs do. REDRAWN LINES. But a critic like Richard Solomon, president of Pace Editions, a major print gallery in New York, believes that buying an artwork without eyeballing it is a big mistake. As for those 2,500 dealers at Sotheby's Web site: ''A lot of them signed up because they get a discount on the catalogs,'' Solomon quips, referring to the tension between the galleries and the auction houses, which have redrawn the battle lines by going online. Solomon says he considers the Internet overrated for art sales -- useful for providing information and price-referencing only. Does he still see an Internet threat to galleries? Yes, Solomon says. Art buyers might start using the Net to shop for lower prices, neglecting the more important measure of quality. ''If that [price] information is taken as gospel,'' Solomon warns, ''you create a certain amount of chaos in the market.'' For those contemplating entering the somewhat-controlled chaos that is the current state of buying art online, the rules are simple: Learn about the artist first, buy from a reputable Web source (pony up for that escrow fund), and view the work online carefully. If it is a print or photo, find out if it's from a numbered edition. And, especially if it's a big-ticket item, ask about return policies and follow-up service. Then try to keep your senses intact once that blood-boiling bidding war begins. By Joan Oleck _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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The Art of Collecting Art TABLE: Big Dates in the Art World (extended) TABLE: Paintings vs. Stocks ONLINE ORIGINAL TABLE: Building Your Collection ONLINE ORIGINAL: A Treasure Chest of Art Online? INTERACT E-Mail to Business Week Online | |||
