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Introduction: The Highest Art Auction in History
Recently a Christie's art sale became the highest auction in history. The sale included works by Jackson Pollock, Roy Lichtenstein and Jean-Michel Basquiat, among others and in total generated $ 495 million. The sale established 16 new world auction records, with nine works selling for more than $ 10m (£ 6.6m) and 23 for more than $ 5m (£ 3.2m). Christie's said the record breaking sales reflected "a new era in the art market".
The top lot of Wednesday's sale was Pollock's drip painting Number 19, 1948, which fetched $ 58.4m (£ 38.3m) – nearly twice its pre-sale estimate.
Lichtenstein's Woman with Flowered Hat sold for $ 56.1 million, while another Basquiat work, Dustheads (top of article), went for $ 48.8 million.
All three works set the highest prices ever fetched for the artists at auction. Christie's described the $ 495,021,500 total – which included commissions – as "staggering". Only four of the 70 lots on offer went unsold.
In addition, a 1968 oil painting by Gerhard Richter has set a new record for the highest auction price achieved by a living artist. Richter's photo-painting Domplatz, Mailand (Cathedral Square, Milan) sold for $ 37.1 million (£ 24.4 million). Sotheby's described Domplatz, Mailand, which depicts a cityscape painted in a style that suggests a blurred photograph, as a "masterpiece of the 20th Century art" and the "epitome" of the artist's 1960s photo-painting canon. Don Bryant, founder of Napa Valley's Bryant Family Vineyard and the painting's new owner, said the work "just knocks me over".
Brett Gorvy, head of post-war and contemporary art, said "The remarkable bidding and record prices set reflect a new era in the art market," he said. Steven Murphy, CEO of Christie's International, said new collectors were helping drive the boom.
Myths of the Music-Fine Art Price Differential
When I came across this article I was stunned at the prices these artworks were able to obtain. Several of them would hardly evoke a positive emotional response in me, while others might only slightly, but for almost all of them I really don't understand how their prices are reflected in the work, and vice versa. Obviously, these pieces were not intended for people like me, an artist, while wealthy patrons certainly see their intrinsic artistic value clearly.
So why does music attract these kinds of prices? Is it even possible for a piece of recorded music, not music memorabilia or a music artifact (such as a rare record, LP, bootleg, T-shirt, album artwork, etc.), to be worth $ 1 million or more? Are all musicians and music composers doomed to struggle in the music industry and claw their way up into a career in music? If one painting can be valued at $ 1 million, why can't a song or piece of music also be valued similarly? Apparently, the $ .99 per download price is the highest price a song is able to command at market value, no matter what its quality or content, and the musician or composer must accept this value as such.
The financial equation looks something like this:
1 painting = $ 37 million
1 song = $ .99
Sometimes people say that a song can change the world, but no one ever says that about paintings. So theoretically, if people want change $ .99 is the price we must pay for it.
Now here are a few statements that should help us clarify what the monetary or value discrepancy between painting and music is based upon.
(1) There are fewer painters than there are musicians.
(2) Musicians are less talented than painters?
(3) It is easier to create music than it is to paint.
(4) The public values paintings more than music.
(5) Paintings are more beautiful than music.
(6) Paintings are impossible to copy unlike music.
(7) Painters work harder than musicians and composers.
(8) Blah, blah, blah.
Hardly anyone agrees with all of these statements and yet all, or at least some of them, would have to be true in order for the price of paintings to so greatly exceed the cost of music. Moreover, I doubt that art collectors and great painters have to deal with as much legal red tape as do musicians when releasing their work into the public domain, so why aren't the rewards equal, if not greater for musicians who have to work almost as much protecting their work as in producing it. Musicians and composers, however, actually must do more than authenticate their work and obtain accurate appraisals regarding what their work is worth, but they get paid less. The equipment costs alone for musicians is much higher than it is for painters.
Maybe it's fame, and not money, musicians are after? That would explain why most musicians settle for the low pay they receive from record deals and digital downloads. Perhaps, that's also why many of them are touring more often to increase their fame and not their fortunes. But wait a minute, that's where musicians actually make most of their money from live performances and the selling of merchandise, but not the music. I guess this is why many musicians see themselves not as composers, but rather as performers and entertainers.
So what can musicians do, who don't see themselves as entertainers, but instead as composers who create music as a fine art? Because they too have a strong desire to earn a living to support themselves in their chosen profession, thus there must be a specialized approach whereby they present their work to music lovers or art collectors in search of assets and curators for unique pieces to place in their private galleries. Imagine that, a recorded piece of music that few have ever heard which is displayed and played only on a specified music player in a private art gallery or collection.
In thinking about how a musician can follow the example set by painters in the fine arts, I've isolated 4 principles that should help to make the spectacular financial rewards they've reached possible for the musician. So let's analyze some of the characteristics that govern the market for fine art and see how musicians can apply these concepts to their creative, production, and marketing processes.
The Ideal Vehicle for Music as Fine Art
Here are 4 principles and practical suggestions for musicians who want to elevate their music into the realm of fine art by following the example of the painters of the past and present.
1) Strive to make unique music or music collections.
The composer must design experiments with sound or compositional techniques. Some music belongs in the realm of the public, while other music solely belongs in the realm of fine art. It's really not that difficult to tell the difference. The difference is clear when one compares the environment of the nightclub and the music one finds there with the elevated environment of the ballet or opera and its music. The difference is not necessarily one in terms of types of music, but rather in the composer's sonic fingerprint. In other words, not everyone thinks Jackson Pollock was a great painter, but everyone acknowledges that it took him years of development to reach a point where his style could be born. It's the style of the artist or composer that will call out to the attention of wealthy patrons, the respect of peers, and the exclusive admiration of the music appreciator. In music, the style of the composer, regardless of genre, I call 'a signature sound.' It's the signature sound that music and art collectors will want to own and for that they might be willing to pay or bid up the cost of ownership to a higher price.
2) Create a music gallery.
This could be modeled after the art gallery where one or several artist put their work on display. The difference with the music gallery is that you would have a hall filled with listening rooms or stations. These showings would not be live performances, but instead will be in effect sound installations. You could also separate one hall into several compartments for different composers. The music showing would be an exclusive event provided to serious music and art collectors who actively seek out sonic experiences and buy what they like. The purpose of the music gallery would be the same as the art gallery – to give the public a sample of the artist's talent, to give critics something to write about, to have other composers comment on the work of a peer, and to create buzz in the art world. Always remember that it shouldn't be the event that drives the buzz, but the music that makes the event.
3) Turn your music into a tangible asset.
The obvious difference between a painting and music is that one is a tangible artwork and the other is not. In other words, one of the defining characteristics of a painting is that the medium and the art are one. Unlike music, where the music must be transferred onto another object such as a cassette tape, vinyl, CD, or mP3 player before it can be perceived, whereas with a painting (or sculpture) an object has been transformed into art. So how can it be or is it even possible for a cassette, CD, or download to be transformed into art? The cassette and CD are more akin to a photograph of a painting, rather than a true expressions where the medium and the art are one.
So one step a musician can take to elevate their music into fine art is by making your music and its medium one. The best way that I can think of to do this is by looking to the past. Ironically, the vinyl LP very closely achieved this quality with album art, its sizing, and packaging. Let's quickly discuss some of the qualities of the vinyl LP and valuable marketing angles that I think opens up interesting approach for musicians to turn their music into fine art at price appropriate levels commiserate with earning a livelihood.
Today there are several companies around that let you customize your LP vinyl album and artwork. This is wonderful because it gives you total control over the art direction your packaging takes. This is an expressive way to bring the personality of the artist, band, or project out into physical form. Many colors are available and unique mixtures are also possible to add a dimension to your music that isn't normally possible with cassette tapes, CD's, or digital downloads. Even split colored and glow-in-the-dark vinyl are available for bold composers looking for something with a bit more flair.
Etched Art and Your Album
Another fantastic way to elevate the music via packaging and presentation is to consider etched art in vinyl. Etched vinyl is an image pressed into the unplayable side of your record which has a frosted appearance. The etched side does not contain any grooves or music but adds a real touch of style to your music package. I don't know if etched art can also be a hologramic look, but that would be another dimension that would enhance the visual component of your music package.
Art and LP Sizes
The last aspect I'd like to touch on is the size of the LP. Unlike the cassettes and CD's, which both come in a single universal size determined by the media player, LP's are played on phonographs or turntables whose arms can adjust to the different sizes of LP's. In general, LP's come in 3 sizes: 7 ", 10", and 12 ". And because the album covers have to provide a sleeve for a large surface, they correspondingly must also be large. At a minimum the 12" LP will require an album cover that's 1 square foot. That's about 4 times the size of a standard CD and anywhere from 8 – 12 times the size of cassette tape.
Understanding this gives you an additional angle to design artwork for the music package. There might even be a way to design a painter's canvas which can house an LP within its frame to turn it into a cover. For those musicians and composers who possess multiple artistic talents, an original painting to accompany a music release could be another profitable approach to look into. If you think about it even further the size of the 12 "LP is actually the size of a small painting. Foldable or dual LP covers are also available which provide a much larger surface with which to more greatly present album art work to dazzle customers . The dual LP album cover would give you exactly a 24 "x 12" surface to work with.
The Non-Vinyl LP and other Miscellaneous Considerations
Other more sophisticated forms of the approach I'm describing here for the LP would keep the concept of the LP at the center of the music package, while removing the vinyl as material. Ideally, the perfect substance for a fine art music LP would consist of a material that did not warp, couldn't be shattered, that would prevent grooves from wearing out, and that would be scratch-proof. So that would mean you'd need to do your homework and find out what's possible with all known exotic substances, metal alloys, industrial metals, specialized plastics, and non-scratch surfaces to achieve the perfect substance for a fine art music LP. Moreover, this substance would play CD quality sound on any or a special turntable with a uniquely designed needle made specifically for this material and album type.
If a fine art music LP were to ever come into existence it would have to stand the test of time and survive usage, storage, and travel as it transfers custody from one owner to another over decades and even centuries. These are the main reasons why owners of fine art music LP's will need to get insurance for the asset. A non-vinyl LP could also be manufactured to blow away the art collector, music enthusiast, and investor with something like an LP made of 24-karat gold or some other precious metal like silver or platinum. This one alteration could make such an LP worth a $ 1 million or more depending on the aggressiveness of the bidders. Overall you'll have to do some research of your own to discover what your options are and can be in order to raise your LP into the class of an investment, a tangible asset (collectible), and fine art. In the absence of the existence of this ideal substance, we must aim for novelty to achieve appeal.
Another aspect to explore briefly is the exclusivity factor in regard to the ownership of fine art. Not everyone can afford a Picasso, but those who can, generally, aren't willing to share it with everyone because they want exclusive ownership over the Picasso, that's part of the package of owning fine art.
The way to provide exclusive ownership to interested parties is through contracts, so you'll have to hire legal advice to shape the legal framework governing ownership of a music album or music as fine art. The contract can be shaped in any number of ways according to your wishes, but basically it should state what the owner has permission to do or is prohibited from doing with the work you are selling them. You want your buyers to know that they can transfer ownership of the album to heirs or sell it to other private collectors as you can with any other tangible asset. This is part of the process of owning fine art, which they've come to expect in their dealings with galleries and other collectors, so deal with them as a professional.
In addition, you'll want to legally prohibit the buyers from broadcasting or disseminating the music from your fine art LP or other media. To preserve its value the music must be kept out of the public domain and remain in the hands of those who have the right to hear it. If the owners want to talk about it and even play it for a small gathering of people as a fine art music exhibit then great, but they should not be permitted to make copies or profit from your recordings.
The beauty of a limit supply and contracts is that together they will help you to track all of the owners over your lifetime and preserve the value of your work. If one of them can be found to be responsible for leaking the material out into public, you'll have a lawsuit on your hands which you should easily win. But if a leak was to happen, the value (price) of the LP might drop precipitously and demand could even dry up completely. But really what's the worst that could happen, that the price of your music ends up at the low end of the price scale – $ .99 per track?
A Word on Supply and Demand
Similarly, the law of supply and demand must also be part of the equation for pricing your music as fine art. Basically, the law of supply and demand works like this: the greater the supply, the lower the demand and the lower the supply, the greater the demand. In other words, the more of something there is, the less it's worth and the less of something there is, the more it's worth. The law does not always work out this perfectly, but as a general rule it works.
The problem with this law is that it only slightly takes into account mass psychology and the way demand is created, which is by advertising, marketing, and PR (public relations). Without these 3 factors working in your favor, there will be little or no demand for your fine art music LP, no matter how small your supply is. It's only when these 3 factors are working in your favor and demand is fairly high that the price of your singular or limited edition fine art music LP, CD, or digital audio files can rise and skyrocket. So become fluent with hope to employ advertising, marketing, and PR and make sure the demand is there among your target audience prior to releasing your work so that you can be certain your album receives a high bidding.
A Digital Point of View
Some of the ideas I've presented here so far can be applied to music in digital formats as well. For example, a limited edition, gorgeously designed iPod or alternative mP3 player with your fine art music programmed into a locked memory is one approach. For example, high-end buyers there's an iPod available that's made from 22k gold and it features an Apple logo made of diamonds, it estimate price is roughly $ 120,000.
Something like this could work or even just a really cool looking, READ-only thumb drive could work. You just plug it in and enjoy exclusive access to an album that only one collector or a select few have in their possession.
The number one problem with a digital format is that it's too easy to copy files from one device to another, which is why a locked or unhackable memory is crucial. Without the locked memory, the exclusivity factor cannot exist and undermines the creation of a fine art music digital device.
4) Put your music to auction.
Part of the reason why the paintings in the beginning of this article sold for so much money is because competing bids pushed the price upward. After you've designed an amazing fine art music collection and package, you'll need to decide how to sell or auction your product.
Many options for auctioning items are available but probably the most well-known is eBay, but eBay is probably not the best place to sell fine art music this way. To start it might be a good place to test the concept, but you might not reach your target clientele. Another option could be Bandcamp or Amazon, but there's no auctioning available with these companies. However, you could set a high price for downloads, CD's or vinyl LP's and sell few of them.
For example, downloads might go for anywhere from $ 15 to $ 200 per track and for the album maybe the price of a mid-range painting, perhaps $ 800 to $ 2,000 +.
You could also set up a simple website where you present and sell your fine art music like painters, sculptors, sketch artists, wood workers, and artisans sell their work. On your site you can talk about your album on video, with a music blog, on internet radio, through interviews, on music or artists-oriented podcasts, and through articles, so that you can send all the traffic to your eBay page or personal website where all you're selling are copies of your limited edition collection of fine art music.
The simplicity of this plan is that you, along with eBay as your broker, control the entire process. The idea here is as with most auctions which is to watch the bidders compete with one another as everyone watches the price go higher and higher.
Name Your Price: The Radiohead Experiment
The band Radiohead did something like this but differently. Instead of auctioning a one of a kind or limited edition exclusive digital album, they allowed their fans to pay what they wanted for their new release at the time. The experiment brought in mixed results but overall was a success for the band members who made more money personally than on any previous album. However, it's been reported that 38% of buyers spent an average of $ 6, while the other 62% downloaded the album without paying anything at all – $ 0. Globally, the average price paid was around $ 2.26 and $ 3.23 in the US Of those who did pay something, 17% paid below $ 4, but 12% paid between $ 8 and $ 12.
This approach is unlikely to work for lesser known artists who want to present their music as fine art. The main reason why it wouldn't is because it fails to fulfill the factor of exclusive ownership. Everyone and anyone could get a copy of the Radiohead album, therefore it's value is reduced because the quantity available was infinite instead of limited or rare, since the demand was high.
NIN and a Tiered Approach
Likewise, tiered fine art music packages whose prices range from a few dollars up to hundreds or even thousands of dollars is a much better way to entice collectors to buy music as fine art or music as an investment.
Here's how Nine Inch Nail's Trent Reznor made a small fortune with his "Ghosts I – IV" album release. In total 5 tiers are available.
The first tier offers a free download of the first 9 tracks from the album.
The 2nd tier offers a $ 5 digital download with a 40 page PDF.
The 3rd tier offers a 2 CD's with a 16 page booklet for $ 10.
The 4th tier is a $ 75 deluxe edition which includes 2 audio CD's, a data DVD with all 36 tracks in multi-track format, a 48 page book of photographs by Phillip Graybill and Rob Sheridan, a 40 page PDF book, and an accompanying slideshow on a Blu-Ray disc.
And on the 5th tier you get pretty much everything else on the lower tiers except you also get a 3rd book with art prints of imagery from Ghosts I – IV and each limited edition copy is numbered and personally signed by Trent Reznor. This limited edition was restricted to 2500 copies with a limit of one per customer for a grand total of $ 300. The $ 300 tier was known as the Ultra-Deluxe Limited Edition Package and is currently sold out.
The financials on the 5th tier look pretty good. With the Ultra-Deluxe Limited Edition Package, we know there were only 2500 copies and that each sold for $ 300. So, 2500 x 300 = $ 750,000. Imagine what prices could have been reached if Reznor had allowed the buyers to bid on the Ultra-Deluxe Limited Edition Package. He could have started the bidding at or just below $ 300 and watched the prices go up from there. Interestingly, as fewer of them were available the prices might have started to get astronomical. He probably still would've sold every copy and his income might well have been closer to $ 1 million, but either he did a great job structuring his price scale as demonstrated by his results. And let's not forget that our equation excluded the income he generated from tiers 2 – 4, which most certainly brought his total revenue far passed $ 1 million.
As we end off let's briefly review the factors that will lead to fine art music success.
1) Strive to make unique music or music collections. To do this you'll need to experiment with unique methods, techniques, or styles that offer a signature sound. In the art world, this will be known as your sonic fingerprint. This is what art collectors will want to purchase and appreciate.
2) Create a music gallery. Come up with ideas for how to present your new compositions at a music exhibit. It should look and feel much like an art exhibit, but be adapted for music. This might include setting up private listening stations for individual art collectors or small rooms for a limited listening audience and where auctions can occur.
3) Turn your music into a tangible asset. Painting elevates the canvas and paint into art, whereas music can never elevate a cassette tape or CD into art. For music, the medium must be turned into art as part of the package for presenting music as fine art. Painting also elevates and transforms its medium, while music is usually transported by its medium, unless its digital, then it's all about the music. Remember what we discussed about digital formats and the vinyl LP as ideal vehicles for selling music as fine art.
4) Above all, offer exclusivity as an essential part of the package of fine art music ownership, so find ways to guarantee this for your buyers. Art ownership is strongly based on its exclusivity, which for the collector means they are part of a very select group of individuals who have the right or privilege to receive exposure to your fine art music. If you can exclude the masses and create demand amongst a select few, then the prices you can attract will rise as few buyers try to outbid one another for exclusive ownership of your music.
5) Lastly, use an auction system to create massive profits. Keep the law of supply and demand in mind when building your music into a tangible asset and don't forget the vital role advertising, marketing, and PR play in creating demand. There's no purpose in creating a limited supply of anything for which there is no demand.
These are by no means all of the ways in which these ideas can be applied to your situation or in these formats, but whatever you choose to do you'll need to formulate the right balance of factors that make the price of your fine art music rise. Many of you may be stunned by the extent of initial investment capital you'll require to elevate your music into a fine art collectible, which is why you'll have to amplify your people skills and take courses in sales training, marketing, investing and business. Several of the approaches I mentioned will require you to raise capital from a bank, institution such as a private equity firm, or venture capitalists to get you started, otherwise you'll need to get access to personal or small business credit at low interest rates . This will give you more time to implement your program and generate your first wave of sales.
If your business plan for turning your music into fine art is solid and your sales presentation is thorough, then the money will find you as more investors see profit in the opportunity. Additionally, wealthy patrons may see your work as an important contribution to art history or your presentation may just resonate with an investor or group of investors that they may just give you money to finish your project. In either case, be business-like, get all of your agreements in writing and have them reviewed by a competent legal representative expert at intellectual property issues and financial transactions in particular.