Art Expert Magnus Resch On Why The Art and NFT Markets Aren’t So Different
Magnus Resch has spent many years decoding the opaque art market for general audiences and academics alike, turning a complicated social dance into a matter of quantifiable clarity with books like Management of Art Galleries and How to Become a Successful Artist.
Resch has a particularly unromantic view of how art operates, as might be expected from an economist, entrepreneur, and Yale lecturer. This data-focused approach makes him an ideal person to cut through the messy world of NFTs. His new book, co-authored with Tam Gryn, How To Create And Sell NFTs – A Guide For All Artists, came out yesterday.
In an interview with ARTnews during NFT.NYC, Resch makes illuminating comments on the similarity of the art and NFT markets, why NFTs will change the way galleries operate, and even makes a prediction on what we can expect of the volatile NFT market over the course of the next 18 months.
ARTnews: So what drew you into the art market to begin with?
Magnus Resch: In order to fund my studies, when I was in my 20s, I began selling art, which led me to ask why some galleries are successful and other aren’t. This question became the focus of my Ph.D thesis.
ARTnews: And what did you find?
Resch: Successisabouteverythingnotrelatedtoart. Whatanartistcreatesdoesn’treallymatterfortheirsuccess.For galleries, all the work they do that is notrelatedtoart is what makesthegallerysuccessful. Essentially, success for galleries and artists comes down to the network that they’re in. Who you know is more important than what you sell or what you create.
ARTnews: I was speaking with an NFT collector not long ago who said something similar. He said, “It doesn’t matter what it looks like, if there’s a strong community behind it, I’ll buy.”
Resch: Isn’ttheartworldthesame?The art world thinks poorlyoftheNFTspace,becauseit’sonlyaboutmoney.Yes,that’strue.That’sthenumberonereasonwhypeoplebuyNFTs:tomakemoney.Buttheartworld,atleastatthetopendofthemarket–andthatisaveryimportantdistinction–thetopendofthemarketisalsoallaboutmoney.
ARTnews: Yet despite these fundamental similarities, the art world is reluctant to enter the NFT space.
Resch: I was surprised by that. I’ll go to an NFT event and see so few people from the traditional art world running around often, and I wondered why. But I understand; at the beginning, I didn’t like it either. Suddenly, I was surrounded by all these new people, my credentials from the traditional art world didn’t play a role at all anymore. Everything that I had built up over so many years wasn’t relevant. And then there was a whole new technology, a whole new language that I had to learn and understand. That was challenging, but I went on this journey because I was curious, that’s why I wrote this book.
ARTnews: What are some of the key reasons that art world insiders are reluctant to enter this market? Aesthetics?
Resch: It’s never a discussion about aesthetics. There’s a few reasons why I think why they’re reluctant. Firstly, they’re turned off because suddenly works from artists which they have never heard of before are selling for millions of dollars. Secondly, it’s very hard to enter: wallets, Metamask, blockchain, these words alone can be scary to people. And then thirdly, the art world has historically always been slow to adapt to new things. We are happy with the status quo. Let’s just continue with this degree of control.
ARTnews: Do you think the art world can afford to ignore NFTs?
Resch: The biggest problem in the art market is that we have too many visitors and too few buyers, the number of buyers is going down. And why is that? Because buyers are scared to enter the art world. It’s too elitist, it’s not open to first-time buyers. If you don’t manage to convince rookies [to join] into the art world, we will all fail. But NFTs can help solve this issue. Suddenly there are people buying because they had the full transparency of prices and automatic access.
ARTnews: What’s the impact of this for artists?
Resch: What artists are realizing is that they can be successful without galleries, 50/50 doesn’t cut it anymore. Artists can act as true entrepreneurs, finding and creating their own customers, their own distribution channels. We’ve seen a lot of artists who didn’t make much money three years ago are now very wealthy because they took their own career into their own hands, rather than relying on anyone else. Jen Stark and Justin Aversano are good examples.
ARTnews: But do artists really want to have that role? And for all the flack galleries get for dodging buyers and playing games, isn’t that all ultimately in the service of placing artists in the best possible collections and hopefully, institutions?
Resch: It’s true that artists need galleries, and the NFT world also needs them. Most NFTs won’t hold value in the long run because they lack the credibility needed to remain successful. People like Erick Calderon understand it’s important to tap into the traditional art world in order to sustain market value. That’s why he opened the space [Art Blocks] in Marfa and why he has this collaboration with Pace.
ARTnews: Any predictions for how the NFT market is going to move in the future?
Resch: Yes. We will see another short spike, and then a downturn. In 18 months from today, the market will be stabilized.