Tuesday, June 18, 2013

The Business of Art

I've become interested in the business models of art. I've always thought about them, but now I find thinking about them entertaining. That makes me a certain type of artist. Obviously there's another type of artist, that finds thinking about business models repulsive, repugnant, distasteful or corrupting.

It's just a preference though, like ones preference for vegemite, or football team. And thus I don't know if I have the authority to define anything thusly, but I use the word 'business model' as opposed to 'business strategy' because to me at least a strategy implies a strategist whereas a model is just a description of how someone or some entity relates to the market.

Which is to say, I'm sorry Artists with a capital 'A', that regardless of whether you think about your business model or not you will have one, there's a way to describe your business even if fundamentally you don't think of it as a business at all. As sure as there is a language of physics that can describe the gravitational pull currently being exerted.


Perhaps contentiously it's been asserted that in the broadest sens business models boil down to one of two options - 1. Market Penetration, and 2. Product Differentiation. One is beating the competition, the other is avoiding competition.

I could now go into a lengthy description of each, putting up several analogies and trying to draw lines with examples in art, but instead I'm just going to attempt to describe what each might look like to an artist with no business training.

Are you competing for something? Grant money, Gallery Space, a prize? That's a good indication you are going for market penetration. There's a 'pot' or restricted resource pre-existing that you are trying to get maximum share of. You're taking into account some defined criteria and trying to best fulfill it.

By contrast, product differentiation - you are creating a criteria that by definition your art will best fulfill. Are you looking at the art world and noticing gaps? either in the art itself or in the audience? Are you trying to reach new audiences? Are you trying to transmit a new message? or both?

Here's where it's tricky, because an attribute like 'uniqueness' could apply to both strategies, the difference being, is the market, or 'scene' in artspeak that you reach employing uniqueness as a criteria? For example any gallery that has the word 'modern' or 'contempory' in it's title? Here if you take the sentence 'a unique piece of art' you can determine which of the two models fit.

If the 'unique' half of that sentence is the important part, and the 'piece of art' arbitrary, then that's market penetration you have there. What your art says is a superficiality, it doesn't carry as much importance as the perceived lack of precedent.

If the reverse is true, the piece of art carries all the weight, and it just happens to be unique, then it's product differentiation. In crafting the message you have produced something new, and superficially you lack competition or precedents. But product differentiation need not be unique, it may be taking a pre-existing work and bringing it to a new audience eg. rap music for old people.

Public or Private

It occurred to me the other day that obtaining a grant as an artist is a source of great pride, achievement and validation, whereas you would never here the CEO's of a motor company boasting that their business model depended on tax-payer subsidies.

Does this mean artists shouldn't seek government money? Well the analogy isn't fair.

In respect to the automotive industry, Chomsky points out the following limitation of the 'free markets' limits: The market as exists gives me the choice between Ford and GM, but it doesn't really give me the choice between Cars and Public Transport, because such choices are beyond an individual consumer, they are social consumption choices.

Because it's from a video I watched, it isn't a direct quotation, but the fact is that we want a representative government to be part of a market. Arts funding, broadly speaking is a good thing.

But questions arise. In the instance of a car company, a business model that includes Government subsidies may work, but could be criticized as 'illegitimate' or 'failed' because they are competing against other car companies that make money without including the government in their business model.

In the instance of a manufacturer of trains, their business model would certainly include governments, as they are competing for government tender. A manufacturer of trains is supposed to sell to the government. (crowd  funding may change even this though).

And there as an artist is your quandary. Is the government subsidizing your failure to reach an audience, or is it funding art that individuals are incapable of doing? Determining the answer is so nuanced, examples would lead to this post snowballing, the question wants to be asked though.

Art Should be Free?

Like the Mx right? Maybe that's too Melbourne specific, but basically there's this 'newspaper' that is handed out for free at train stations. Nobody would consider it an act of lunacy though. It's a rational business model.

I've written in a much lengthier post before, that art is never 'free' so long as it is made out of materials or consumes resources. And it most definitely will, if you think it won't or doesn't need to, you need to include 'time' and 'space' etc. in your definition of resources.

So your art will cost somebody something, but does it need to make a profit? No.

Firstly, I think any business model to be described as 'good' by intention or design, needs to have a question of success AND failure in there. I choose not to explain the whole concept of 'risk' but if an art venture fails, then it doesn't follow that it should never have been attempted.

There are many forms of art these days that people would consider 'financially unviable' including it seems most of the music industry. But an easier example is installation art.

If you are in some back alley gallery expecting an opening night turn out of 70 people, the likelihood in Melbs is that 68 of those people are your fellow art students. The other two are unlikely to be representatives of NGV or MONA or even a publication that representatives of those read. They are very likely to be your parents or me.

But an installation can't be sold to most people, they are large, 3D pieces often fitted to the space they are exhibited in that nobody bar a gallery really has the space for. The odds of an installation exhibition resulting in somebody purchasing it for their permanent collection are incredibly low.

That doesn't mean it isn't financially viable, it just means you are in a 'winner take all' business model. Ai Wei Wei does installations and makes millions. Most installation artists lose thousands. But art can be rationally undertaken when low odds of success x large value of success > high odds of failure x cost of failure.

It's alright to put something out there, for free that costs you money and isn't very likely to succeed. The important thing is to avoid a rationalising ideal to cope with the very high chance of failure. It's not 'bad' or 'crazy' to make installation art. It's just really 'trendy' right now, and what I would call 'oversubscribed'.

Something is always going to be oversubscribed. In the words of Homer Simpson 'they saw an overcrowded marketplace and said "me too"'. What tends to arise, and should be avoided are lofty ideals that make noble the regular occurance of failure (under any criteria) and ignoble those who achieve any kind of success (typically 'selling out').

Education costs us time and money. Some people do it as something to do, but I'd say most people accept these costs carrying the belief that they will pay off at some future date. Practicing takes time but we do it so that the end art pieces are more likely to succeed.

By accident or design, a business model always applies.

Selling Out

Are we destined to collide with the commercial world sooner or later? Is it inevitable that every artist comes to think of their art as a business?

That's the tricky part. I would concede that it is plausible that somebody could survive as an artist and never think of what they do as a business. They are probably lucky in more senses than one. They are far more likely to realise that luck always plays a role in success no matter how deliberate your strategy.

Think of the 'street artist' they do graffiti for years risking prosecution by councils and community service orders and jail time. Their art survives on it's merits to the community, risky and temporary it could be buffed or just nonchalantly panted over by a better or shitter artist. Then some restaurant finds them via their tag and pays them to do the side of their new cafe? Have they sold out? And which piece is 'legitimate' the commissioned sanctioned piece, or the act of vandalism?

Whether they take the job or not, whether they planned to or not, a business model still applies. Choices are being made over who assumes the risk and who has the autonomy.

There's no right or wrong way to cut up this cake. But 'selling out' I think does exist in a practical form.

When 'selling out' is a concept you use to console the fact that your art isn't reaching people, that you are getting poor turnouts, that you aren't selling or that the establishment doesn't recognise you, then you have nothing really to worry about if presented with the opportunity to sell out.

If selling out describes a move where you will lose one audience to gain another. Eg. losing your street art following by moving into the gallery scene, you need to consider the risks and benefits, because these decisions can be irreversible.

Hitting a higher volume of distribution or reaching a broader audience may also simply eat up your time, or become so demanding you stop enjoying your vocation. It can come with demands to reproduce certain works ad nauseum.

In these ways, 'selling out' is a practical consideration where my preference would be for considering them while I have a choice to make, rather than being surprised when the choice is made.

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