Smart Art Economic Model

The economic model for a Smart Art Market presents a new logic of trade and valuation, ensuring fair access, distribution, and acquisition for every type of art collector. It proposes a business model for contemporary art sales based on abundance and not on scarcity, driven by transparency and reliant on a mass of collectors, rather than a select few. Investing in abundant collectable artworks can be seen as owning blocks of shares of a financial commodity. Collectors from the Smart Art Market can invest in this type of art commodity and they are supported by a discerned and accessible valuation system.

Business goals of ArtCommodities.com

1) Providing the collectors an alternative art financial investment portfolio with cost-effective solutions.

2) Reestablishing the real economic and social values of art, which are the foundations of a healthy market.

3) Competing against an unregulated, opaque, and volatile market which is producing financial losses and mistrust.

A mediation system for innovating systems of value

The Smart Art Market proposes an economy similar to those of other cultural industries, in which profit is driven by appreciation by a large audience. This model circumvents traditional intermediaries or middlemen within the market, allowing for direct exchange between producers and consumers of cultural products, and new patterns of taste formation within the art industry. Shifting the sale of contemporary art to a model more similar to those proposed within music and cinema enables mass collectors to express their opinions visibly and widely, challenging the separate status of the professional critic, and inaccessibility in the art market. Such collaborative filtering would enable a new process for the creation and assignment of cultural value.

Leverage technology opportunities

The Smart Art Market leverages digital and network technologies to advance today's art trade. Internet networks facilitate, accelerate, and expand the distribution of art commodities, which increases potential access to investment by any demographic capable of market exchange. Easy reproduction of digital artifacts is another benefit that increases the access and share of copies of art commodities for viral-marketing. Yet, the uniqueness of the individual artworks is assured by crypto-algorithms that sign and verify the authenticity of the artworks. This means of ensuring the authenticity of digital artworks is a new opportunity for the art market. The mathematical impossibility of art forgery of Digital Art Commodities ensures the investment of the art collectors against fraudulent activity that frequently occurs in the traditional art market.

Costs of production

The artworks that are traded within this model are by nature cost-effective, due to the low material resources required for their production. As such, the prices of art commodities are independent of these concerns. This inherently low cost of management and fabrication is a characteristic that is specific to the model and technology of the Smart Art Market. This particular model supplements the opportunity for higher financial returns for both artist and collector, while refining the intrinsic value of the artwork. Instead, the traditional art market often needs a substantial cash flow or liquidity to cover production, transport, marketing, and transaction costs, which limits the creation of artworks to high-earning artists or galleries and excludes critical and socially valuable art from the market. Furthermore, this model would eliminate many traditional upfront and additional costs of the art market including insurance, handling, storage, shipping, preservation, and ownership costs, which are negative cash flow assets. Low-maintenance circulation and easily-transferred art commodities would also potentially lower carbon footprints.

Protocol for the Smart Art Market for Critical Art

- The market must be an open system of valuation, distribution, and trade.

- It promotes collecting with the aim of creating economic value for art with a critical edge and function.

- It is not a donation or crowding-source model, nor a form of patronage. Instead, it embraces personal expressive needs for possessing art that matters.

- It ensures access to the ownership of critical artworks enabled by affordable prices and simple digital platforms.

- Abundance and accessibility are favored over a model of scarcity, while social value is democratically established and preserved within a sustainable economy.

- Artworks sold through ArtCommodities.com are characterized as large series of unique pieces without multiples. Every art piece has unique characteristics, while the series of the same artwork can be composed of hundreds of thousands of pieces.

- The economic value of the individual art piece is intrinsic to its social, historical, and aesthetic value, which is determined by a wide audience that judges the social, emotional, and visual qualities that the piece offers to them.

- The authenticity and certification of the original and unique artwork is guaranteed by crypto-technology within digital signatures on a unique certificate of authenticity, the contract of ownership, and fingerprints for the individual art piece.

- Physical and digital copies of the artworks may be produced by collectors, furthering the premise that the value of a work increases as it is shared. Removing any restrictions against the reproduction of high resolution or printed copies of the artworks allows for them to multiply in infinite copies and modifications.

- The artwork can take any form and medium, including digital files, as long as the production and management costs for the series are incidental to the final sale price.

- The sale and resale of the artwork can take place with or without an intermediary, such as an art dealer, based on the contract’s terms set between the artist and collector.

Access to the market

The model proposed has the ambition to bring quality art to the masses at affordable prices, enabled by its low transaction costs and little to no reliance on material resources. Today only a few can access and make use of the art market, which consequently radically affects the very meaning of art and its social role.

Democratizing the art market through lower priced collectibles and digital distribution changes how art is consumed and experienced, thereby raising returns for both collectors and artists.

Furthermore, better access to the market transcends the simple idea of making the market more democratic through lower prices, as today contemporary art suffers from a narrow audience and reach. This new model would generate wider interest in critical artworks, elevating both their social and economic significance.