Patrick McCrae, CEO, ARTIQ
McCrae is CEO of a pioneering art rental and consultancy business ARTIQ.
Welcome to ‘Generation Rent’. The term might be associated with the housing market, but make no mistake, we live in an age defined by the sharing economy.
Why buy a box set when you have your Netflix subscription? Do you need to buy a car when you can lease one or rent or a Zipcar? And when was the last time you bought a record rather than streamed through Spotify? Some even shave with subscription razors or snack from subscription food boxes.
The subscription model is revolutionising the way we consume, and art is the next industry that is ripe for change.
The stereotypes surrounding collecting art are familiar by now: the market is regarded as opaque and mysterious to those who work outside of the industry and it can be difficult to acquire an artwork that will appreciate in value in the future. In this context, what does the emergence of art rental mean for prospective collectors or those already active in the art market?
For prospective investors
The cost of renting a work is generally based on a fixed percentage of the artwork’s sale cost, so can vary hugely from £20 per month to thousands of pounds a month, depending on the type or number of works you are interested in. All of the artworks that my art consultancy business ARTIQ rents, for example, are also available to purchase. And while we do have enquiries, we find that the majority of our clients are drawn to the rental model and the flexibility to rotate throughout the year that it offers.
Typically, an art rental company will represent a stable of artists, while also working with the licensing departments at institutions such as the V&A, National Portrait Gallery, British Museum or Getty.
ARTIQ’s team of art researchers, curators and liaisons will select works that we think will best suit a client from these sources. The client is then presented with a range of pricing options. The contract price is determined by the value of the various works, but also by the cost of insurance, shipping and installation.
The consumer market is well-served by art rental firms, particularly at the more affordable end of the market. But now the rental market is starting to gain traction with big corporates. For example, ARTIQ clients Investec and Mayer Brown have bespoke original collections that rotate throughout the year.
The corporate and hospitality sectors have had a growing appetite for artworks and art patronage but have traditionally been underserved. We are also seeing a growing demand for art curation in unusual spaces, and public art is a trend that is set to explode in the next decade.
As a business, buying your first piece of art can be intimidating. Starting out instead with a rental collection that you can change every few months is an alternative way to get your teeth into the market, particularly if you do so with the assistance of an art consultant who can guide you through that process. It also gives you the flexibility to try different works and see what resonates with you.
Think of it like a Netflix subscription: in much the same way that you want to be able to watch a variety of shows, art rental gives you the option of refreshing a collection and supporting different artists as part of that process.
The knock-on effect of the accessibility to art that is developing will be an increase in the number of people investing in and collecting art. This means that in the long-term, art rental will drive more investment into the art market.
Auction houses and galleries have traditionally provided the best route to a profitable career for artists and have thus been the market gatekeepers. They remain incredibly influential, but the plates are beginning to shift with the emergence of businesses aimed at engaging new audiences.
It is difficult to gauge whether this influx of new rental clients will affect prices for collectors, but it does mean more money coming into the art world, more artists in work, and more prospective choice for those who want to acquire artworks. Matching corporate money with artists is essential to creating a sustainable future for the market.
The same goes for social media, which is becoming more prominent in how artists market themselves. The days of going from gallery to gallery and poring over artworks are in decline. While the online art industry is still in chrysalis form, 63% of people surveyed by Hiscox say Instagram is their social platform of choice to view art. Given that Instagram has more than one billion active users, anecdotal stories of £20m pieces of art selling through the platform could not be too far off.
This all demonstrates growing consumer appetite for art. Industry-wide statistics aren’t readily available on the rental market yet, but at since the inception of ARTIQ 10 years ago, we have paid more than £5m to artists, makers and institutions, with 75% of that in the last three years. The rental market is thriving and looks as if it will continue to do so.