Artplode - Disruptor or Facilitator in the art market?

Maureen McCarthy | 20-Jun-2017
Three years ago, without consciously setting out to do so, art dealer Maureen McCarthy launched a disruptive innovation in the art market, Artplode, a platform that brings together buyers and sellers of quality artworks to transact direct without any commission being charged.
Pablo Picasso Tete de Femme 1945 lithograph for sale on Artplode
Disruptive innovation creates new markets separate to the mainstream, markets that are unforeseen at the time of the technologies conception. Eventually existing market and value networks are changed with established market leading firms, products and alliances displaced. The term was defined and phenomenon analyzed by Harvard Business School Professor Clayton M. Christensen in his 1997 book "The Innovators Dilemma".

Three years ago, without consciously setting out to do so, art dealer Maureen McCarthy launched a disruptive innovation in the art market, Artplode, a platform that brings together buyers and sellers of quality artworks to transact direct without any commission being charged.

Professor Christensen says "an innovation that is disruptive allows a whole new population of consumers at the bottom of a market access to a product or service that was historically only accessible to consumers with a lot of money or a lot of skill"

"Artplode was created to meet a gap I identified in the art market for a platform where private collectors could resell quality artworks simply and inexpensively", McCarthy says.

In the art market profits are generated by charging commissions to buyers and sellers of artworks. The rates of commission charged are up to 50% per transaction, disproportionately high compared to brokerage fees for other investment commodities such as property or shares.

The art market provides very limited options to collectors to resell artworks - primarily offering the works for sale at auction with exorbitant rates of commission. The reserve price for the artwork is set by the auction house with their commercial interests competing with the interests of the seller. The other option for collectors to resell is via a dwindling number of galleries who handle secondary market sales also typically charging 25- 50% commission.

Artplode's business model charges sellers a one time fee of $60 to list their artwork for sale on the Artplode website until they elect to delete the listing. Artworks must be priced at $1000+ to be listed for sale on the site. Sellers answer all enquiries from buyers, set the price of their artworks and arrange payment/ shipping. Consultants are available (for a fee) to assist buyers or sellers with the process if they wish.

Artplode has also been embraced by artists, leading galleries and dealers offering artworks for sale. The site, with its 50,000+ followers on social media, is considered a valuable marketing tool to increase brand/product awareness.

Is it working - time will tell! McCarthy says Artplode currently has more than US$10m in artworks for sale from sellers in 50 countries and impressive growth in revenues from listings of artworks for sale on the site.

On the other hand Sothebys have responded to the overall downward trend affecting the art market, where sales have fallen 27 percent compared to this time last year and revenues fell 16 percent from the last year, by scaling back the size of their auctions, cutting staff and reducing the sale price guarantees they offer in an effort to bolster margins and build a more enduring business.

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