Fair Game: What's Really Thinning the Art-Fair Herd?

When trouble blooms like a corpse flower, it's rare for the people in charge to let on how bad the situation is, even if they know all too well. So usually the rest of us have to dig a little deeper to get to the root of the problem. And I believe this truism applies double to the recent announcements concerning a pair of midlevel art fairs making big changes: Art Berlin Contemporary and London's Art16. 

First, let's backtrack to the facts. Art Berlin Contemporary (or just "abc," if you're into its streamlined branding) announced on Tuesday that it would scale back its number of exhibitors to just 60 from the 120 or so featured in past editions. Maike Cruse, the fair's director, claimed that this decision stemmed from a desire to "go for a more concentrated presentation" and "develop the exhibition more."

The same day, Art Fairs London Ltd., the organizer of the Art16 fair, posted a notice on Art16's website that its 2017 iteration had been cancelled. (Exhibitors were notified via email back on August 23, according to artnet News's Lorena Muñoz-Alonso.) However, Charles Ross, the fair's managing director, also claims that the organizers are "reviewing [Art16's] overall concept as well as [its traditional] May dates," and that they plan to open a new and improved version of the fair early in 2018. 

Now, it could be that both fairs are proactively refining their programs to unlock their full potential, as their respective organizers implied in their sound bites. But my suspicion is that these two events are actually thrashing toward the same mass grave that already consumed the Art International Fair in Istanbul, Feature Art Fair in Toronto, the Melbourne Art Fair, and other smaller players in the sector this year––and for largely the same unspoken, systemic reason.

It's crucial to consider the broader context of abc and Art16's pivots. Laurie Rojas notes in her (earlier-linked) Art Newspaper piece on abc that the self-described "non-fair" has actually been steadily tacking toward a more mainstream approach for the past few years. What began as an "invite-only, selling exhibition of solo artist projects" last year solicited traditional gallerists to exhibit via the sector's standard application process, while the organizers "introduced walls and corners to the [previously] open-plan layout" of the venue itself. abc will creep even closer to default art-fair settings in 2017 by assigning exhibitors "U-shaped units"––not a far cry from the usual cubicle-farm of booths defining almost every other event in the sector. 

As for Art16, Muñoz-Alonso proposes a few possible sources for the fair's troubles: the annual name-change (Art 16 in 2016, Art 15 in 2015, etc.), the aforementioned dates in the industry's always-hectic month of May, the fair's "medium-to-large size." Somewhat ironically, though, I think she actually gets closest to the truth when she tries to compliment Art16's organizers: 

The fair’s ethos, a global outlook that brought galleries from all over to world to London rather than the usual names found at Frieze, was a strong, smart move. Yet, a 100 plus exhibitor fair full of unrecognizable names might have proven a bit too challenging for busy collectors.

I respectfully disagree with Muñoz-Alonso on the strength of Art16's ethos. To me, gathering an international selection of galleries in an art-world metropolis isn't really an ethos/concept at all. It's a pretty standard description of most fairs above the local/regional level. More important: Did Art16 really want to continue excluding "the usual names found at Frieze," i.e. the premier galleries and mega-galleries, so it could present 100 or more booths occupied by John or Jane Doe? Or were the heavy-hitters just not interested in exhibiting there? 

This alternate formulation of the problem starts to get us closer to the larger forces that are now at work on both abc and Art16, as well as the rest of the art-fair sector (and the art industry as a whole). The two fairs' sudden decisions to evolve don't stem mainly from imperfect "focus," or concept, or scheduling, or titling. At bottom, they stem from the phenomenon I refer to as the tyranny of options.

Let's address the "options" part of that phrase first. In the past decade, the art-fair circuit has swelled like an anaconda fresh off swallowing a full-grown goat. By cobbling together separate stats from Edward Winkleman and Georgina Adam, I can tell you that the sector grew from 68 total fairs in 2005 to 189 in 2011––a nearly three-fold increase in six years. In a rare instance where I feel comfortable trusting the organization's numbers, the 2015 TEFAF Art Market Report tallied "180 major fairs with an international element" in 2014, but that figure ignores the many smaller regional or local events in the sector. By Winkleman's count in his 2015 book Selling Contemporary Art, the total number of international fairs rose to 220 that year, and the entire fair sector constituted "closer to 300" events once he factored in fairs that "do not include any, or much, contemporary art." 

The tyranny of options isn't just about this kind of enormous volume, though. It's about how people tend to RESPOND to such enormous volume. As George Packer wrote in a 2014 New Yorker feature about Amazon's effect on the publishing industry, "When consumers are overwhelmed with choices, some experts argue, they all tend to buy the same well-known thing." 

In many cases, we can be even more precise about this effect. Markets with a staggering amount of choices often obey what's known as a power-law distribution, in which––to quote MIT's Andrew McAfee and Erik Brynjolffson in their book The Second Machine Age––"a small number of [sellers or distributors] reap a disproportionate share of sales." They point out that the power law is also sometimes known as the "80/20 rule," where 80 percent of the gains go to only 20 percent of a market's participants.

Yet even the 80/20 rule sometimes undersells the split. From a study of book sales on Amazon (appropriately enough), Brynjolffson and McAfee note that power laws "are also 'scale invariants,' which means that the top-selling book accounts for about the same share of the top ten books’ sales as the top ten books do for the top one hundred, or the top one hundred do for the top one thousand." So it isn't just that the first, second, and third place winners collectively murder the rest of the field. Comparatively speaking, sometimes first place also murders second place, and second place murders third. 

As fate would have it, regular Gray Market readers already know both the power-law concept and its applicability to some art-market phenomena via last week's newsletter / Market Monday post. There, I wrote about Ben Davis's research into the relationship between auction-market success and MFA education. Davis's main finding: A small number of grad schools produced a disproportionately large number of top performers at auction over the past 50 years. Scale invariance played a role here, too: More artists in the top 500 auction-earners received an MFA from first-place Yale than from second-place UCLA and third-place Columbia combined.

What arms the power law to do this kind of damage to a marketplace's rank-and-file participants? One major factor is globalization––a defining change in the 21st-century art industry, as we all know. Brynjolffson and McAfee elaborate:

When there are many small local markets, there can be a “best” provider in each, and these local heroes frequently can all earn a good income. If these markets merge into a single global market, top performers have an opportunity to win more customers, while the next-best performers face harsher competition from all directions… Suddenly second-rate producers can no longer count on consumer ignorance or geographic barriers to protect their margins….

So in an overcrowded worldwide art-fair sector, it's natural for both exhibitors and collectors to retreat to the few "best providers," i.e. most prestigious events. If the premier fairs choose to stay relatively lean, this is somewhat less of a problem for the organizers of smaller fairs like, say, abc and Art16. But if many of those premier fairs expand their booth totals, suddenly more exhibitors gain the opportunity to opt for a "best provider" rather than a lesser light.

To my eye, that appears to be exactly what's happening in the fair sector. FIAC, one of the fall's leading international fairs, just announced that it will host 185 exhibitors this year. Art Basel Miami Beach announced last week that it will feature 269. These are not exceptions. They are increasingly the rule at the top of this market.

But the trend among major art fairs––and with it, the threat to minor ones–– becomes even more pronounced if we look at a different measurement of fair size altogether: the number and location of events under a given brand's battle standard. Untitled is expanding its national footprint by pairing its Miami Beach fair with a new edition in San Francisco next year. TEFAF just added two additional fairs in New York to its original iteration in Maastricht. Just like Art Basel, Frieze and NADA are now three-headed monsters, at least if you count the latter's Collaborations project with Art Cologne. And MCH Group, Art Basel's parent company, has embarked on a mission to begin buying up or partnering with a host of smaller regional fairs around the globe.

All told, then, well-known fair brands are sizing up on both a micro and macro level: more exhibitors AND more events. The line between growth and gluttony gets hazier every day, along multiple dimensions. And the premier fairs' bulging waistlines make both abc and Art16's contractions all the more suspicious.

I already mentioned that abc split its exhibitor list in half this year. Even before zeroing out for 2017, though, Art16 was on the same diet. The fair only presented 100 exhibitors this year after hosting 180 in 2014. abc and Art16's respective organizers can certainly frame those results as a conscious choice to refine their approach, just as it was allegedly part of Art16's "ethos" to avoid the Gagosians and Zwirners of the industry. But my spider sense tells me that the overall "refinement" of their exhibitor rosters is just spin for decreased demand from gallerists and dealers: the art-market equivalent of a recently dumped guy bellowing to everyone in the cafeteria within earshot, "Nah, bro, I broke up with HER!"

Again, that possibility is exactly the endgame we should expect when the tyranny of options invades a business sector: a retreat to a few consensus "best providers," at the expense of everyone else. This is why markets subject to the power law are also known as "winner-take-all" markets. The grand irony is that, the more choices we have, the less variety we tend to opt for.

The entire art-fair format hinges on this concept, in a way. As I wrote earlier this year, repetition and homogenization are strengths in this sector. Remember, "art fair" is ultimately just an industry-specific synonym for "trade show": a sales-driven event designed to block out everything except the potential deal. Fairs no longer exist to disrupt expectations, expand horizons, or inspire contemplation (if they ever did). They exist to move product––and to do so as efficiently as possible. The streamlined transaction is what the majority of collectors and exhibitors alike want out of the format. So why complicate matters with creativity that could slow down the sale? It would be like someone who only cares about maxing out his B12 levels choosing to plan a diverse, healthful year of meals instead of baring his ass to the nutritionist for a vitamin shot. 

We can clearly see this pressure to conform at work in abc's program revisions. As an anonymous adviser told Rojas, their "sales are not always strong, but abc offers something different from the main fairs." My argument is that those two points aren't unrelated. To some degree, they're cause and effect (albeit in reverse): Sales are not always strong partly BECAUSE abc offers something different from the main fairs.

You can see how difference can be a potentially fatal flaw in this sector. If sales are weak, exhibitors don't come back to the fair; if exhibitors don't come back to the fair, the organizer hemorrhages cash; and if the organizer hemorrhages cash, soon enough the fair dies. Hence, with its U-shaped units and open-call to exhibitors, abc in 2017 looks a lot more like a standard art fair than the original abc in 2008. 

More specifically, with its rapidly dwindling exhibitor count, abc in 2017 looks a lot more like a standard art fair slouching toward the grave. I would say the same about Art16: Maybe it comes roaring out of the gate in 2018 to grab profitability and prestige in its jaws, but I think it's entirely possible that, with another year-plus for the tyranny of options to take hold, the fair never resurfaces at all. Justified or not, it doesn't buoy my outlook for either fair that their organizers' tactical shifts also eerily parallel Anthony Bourdain's description of the death march of failing restaurants in his first book, Kitchen Confidential: 

When business drops, or fails to improve, [the restaurant owner] panics, starts looking for the quick fix. He thrashes around in an escalating state of agitation, tinkering with concept, menu, various marketing schemes. As the end draws near, these ideas are replaced by more immediately practical ones: close on Sundays. . . cut back staff . . . shut down lunch. Naturally, as the operation becomes more schizophrenic —one week French, one week Italian —as the poor schmuck tries one thing after another like a rat trying to escape a burning building, the already elusive dining public begins to detect the unmistakable odor of uncertainty, fear and approaching death. And once that distinctive reek begins to waft into the dining room, he may as well lay out petri-dishes of anthrax spores as bar snacks, because there is no way the joint is gonna bounce back.

What else are abc and Art16 doing besides "tinkering with concept" and cutting back their operations in "immediately practical" ways? These aren't thoughtfully considered, voluntary refinements. They're survival responses. And it's entirely possible that they're too little, too late. Potential exhibitors––or at least, the potential exhibitors who consistently generate sales in today's art market––already appear to have whiffed the musk of desperation on both fairs. And like Bourdain's restaurant patrons, they're opting for alternatives with better reputations.   

The point, though, is that abc and Art16's organizers are mostly at the mercy of powers beyond their control, just as was true to some degree for the many other smaller fairs hunted out of existence this year. Their current struggles are more the fault of broader market trends and human nature than any individual shortcomings. Ultimately, what's thinning the art-fair herd is the tyranny of options. And while I wish abc and Art16 the best, no change in concept or branding is likely to move the vulnerable animals up the food chain now.