The Hindu Business Line : Branding art

Trading in art is no longer the domain of collectors and auction houses. The middle class is making strides in art investment. New Delhi-based Copal Art is an auctioneer-cum-collector of paintings and sculpture and recently closed two Indian art funds of about Rs 10 crore each. Copal has also floated a Rs 50-crore fund targeted at non-resident Indians.

Copal funds these investments based on its three-year-old art database; about 90 per cent of the investment is in paintings and the rest in sculptures. The public is allowed to subscribe to the fund - at a discount of 25 per cent on the market price of each work.

Ajay Seth, Chief Mentor, Copal Art, is an art collector and propagator of art. His experience with global FMCG brands in the areas of finance and marketing helped him set up the Copal art investment fund. He spoke to BrandLine on the need to brand art and the opportunities it can create.

Art is the brand of an artist. How can one brand an existing brand?

By `branding art' we are referring to adoption of corporate standards and practices to make art available to the masses at a fair price. A corporate platform also helps educate people on art. Today there is no corporate body to guide art purchase. Most galleries are in a hurry to sell off works and do not advise buyers about the potential value of their purchase.

What would a corporate body do? Does Copal have such a model?

A corporate body would evaluate art before recommending it. It would make projections about the future value of the work and explain the same through publications.

We offer art portfolio management services with free advice. A panel comprising artists and art evaluators tracks upcoming artists for at least two years before evaluating their work. If there is potential in artists, we list them and their works of art in our art bank - irrespective of whether they want to associate with us or not.

The art bank is publicly accessible and has over 350 artists listed so far. Research on artists is an ongoing process at Copal.

How will corporatisation help the art industry?

The art investment market is valued at about Rs 1,000 crore with a few collectors chasing fewer art pieces. The market needs a new breed of collectors because there is a lot of valuable art that does not gain public prominence.

Corporatisation will ensure recognition and a level playing field for under priced and amateur art. In fact, the market price of all the artists that we have recommended (based on an in-house art index) has appreciated by about 40 per cent. Works by artists like Hukum Lal Verma and Kuldeep Singh have quadrupled over the last 11 months.

Once the volume of art increases, varying price points are created that can cater to different investors. If the market opens up on these lines, art investment would grow to be a Rs 5,000-crore industry by 2008. It would also create a cross-country market for art. For instance, lesser-known art from other countries could be traded.

Don't auction houses make up for the lack of a corporate body?

No, they don't. Auction houses do have a procedure to evaluate art. They also have an art index to decide pricing. But there is no transparency in how they evaluate art and arrive at this index figure. Also, these indices feature only select categories of works.

There is need for a transparent global art index and a trading platform for art. Each artist must be able to evaluate and list his work on this index. This will ensure fair pricing (for art). The index must feature every category of art including gallery established art and amateur work.

A global index could also help foreign collectors trade directly with Indian collectors. Today non-resident Indians (NRIs) and foreigners buy overpriced Indian art from auction houses abroad. Though auctions inform one of the sale price of the work; the actual value (and buyer price) is unknown. This makes it difficult to find out if it is overpriced.

But if a transparent index is adopted, the offer price and the sale price of the work would be listed. This gives information on three aspects - index value for the art, seller's price and buyer's price. So one can find out if the work has appreciated or depreciated and if so, whether the change was reasonable.

You have an in-house art index. Are you working on developing a global index on these lines? If so, what is the procedure for developing such an index?

Yes, we are working on a global index. We feel investors should look at an overall index comprising different categories of art. Initially we plan to select about 50 artists each in five art categories - Masters, Future Masters, Gallery Established, Gallery Acceptable and Amateur. As most of them would be listed on our art bank, we would refer to that (art bank) for their market value.

An average of the following factors will constitute the index value of an artwork - price of artist (quoted by artist), gallery price of artwork, exhibition price, secondary market (art dealers) price and auction price.

Through this procedure, we would have five category-specific indices. A mean of these would constitute the global index.

Corporatisation of art will help most artists and art dealers. But are there any other allied areas that could see action due to this evolution?

Yes. Art insurance and security are the obvious growth areas. There is tremendous opportunity for transit logistics (transporting art work) and framing and dispatch companies. Logistics companies can look at specialising in art-related services, as there is no dedicated player in this industry. One can also see growing demand for art wealth management services.

More Stories on : Interview | Arts & Crafts | Brands

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Youth and beyond

Luxury's travails

Branding art

Madison International

Corporation Bank writes in

The Future's in retail media

The Classic story

An insider's view of branding