Are Art NFTs Here to Stay? | Video

Coin Desk’s Consensus magazine recently published an article that featured the Museum of Modern Art’s Madeleine Pierpont. She said that while there’s been a hyper financialization in the NFT space money is actually not a dirty word in art. Now, this got me thinking are NFTS still thriving in the art world. In the article written by Coin desk journalist Daniel Koh, he says it’s sometimes easy to overlook exactly how far NFTS have penetrated into the art world. Given how thoroughly the general public has just rejected the speculation and the hype that’s become synonymous with the asset class major auction houses like South and Christie’s still routinely run NFT sales and they’ve been quite successful. I spoke to Sotheby’s head of digital art and NFTS, Mik Bohanna recently to find out just how far digital art has penetrated the traditional art world. And if he thinks the momentum that was gained in 2021 has staying power. Let’s take a listen, Mikel Bohanna, welcome to first mover. Thank you for having me. I’m gonna be honest, Michel, we haven’t talked about NFTS in kind of a long time on this show despite the fact that everyone thinks that we are either in a bull market or heading into a bull market that’s very different than last bull markets. Why do you think that nfts aren’t in the headlines the same way they were during the last bull? I think people start to really get, um, interested again or curious about it when the market hits up. And, uh, we definitely see, uh, the, the market being way more stronger than a few months ago. Uh But they’ve been, it, it’s been with the help of one year, one year and a half of their market for some. But for me, it was a great moment to really uh focus on the art on the, the, on identifying the, the, the real collectors who were here for the, for the art. And then for us who’ve been like in the, in traditional art for uh many years uh at So it’s now very interesting to um evolve in uh this, in this new market, this very young market choo technology uh in art. Tell me about your audience at Sotheby. So I, I imagine you have the audience that is really interested in traditional art. And I imagine now with your NFT projects that you’re attracting a new audience. Tell me about that traditional audience first. Are they receptive to, to this new digital? Are they curious about NFTS or is it a completely new audience that is engaging with you on the NFT front? No, it’s, it’s It’s a New Johnson. The past three years, we’ve been extremely active in the NFT SPACE. We’ve made hundreds of sales. Uh We sold thousands, dozens of thousands of NFTS for hundreds of millions. And uh we’ve developed a great network of collectors and now when we do sales, we are able to reach the world, uh NFT and digital art collectors, the craft collectors really impacting the NFT market. Although our positioning in the traditional art uh market, we have also this possibility to reach uh a wider audience. Uh It’s extremely uh challenging though, because there is still many barriers for, to collect uh digital art organized uh assets uh that involves having a wallet, a self hosted wallet, uh understanding the, the value of finding something that is not uh that is dematerialized. And uh this goes uh along with a lot of education and uh for some of our of curios and uh like collectors, uh there is some that start uh to collect but always on the lower price. And uh because it’s an easy uh on boarding, um uh it’s easier to onboard these collectors at the lower price points. And then for the top prices when we achieve like we sold 6 million work by Miric Shaak last year. And um like, I think it makes sense, we can understand that at this value, there is more like more uh crypto NFT uh native uh collectors being interested in investing that much into the, the the this medium yet. Uh but we see this evolving. And I think the, the past month we’ve seen uh institutions, museums, public collections starting to collect, acquiring uh some uh digital artworks by some of the top NFT artists we see today. And this with time that they have one goal is like educating the wider audience uh via exhibitions, education, etcetera. So we’ll see with time, we’ll start to see some people being more aware of what’s happening uh with this new medium. And uh and of course, it will come down to the market and they’ll become a purchaser. What do you think needs to happen for those more traditional collectors to be interested in digital art? And NFTS, I think uh like there is all this barrier that it needs to be to, to feel less uh frictional when collecting NFTS uh today. Uh people who are, are also very confident in holding crypto are, are confident holding NFTS. And also some people who don’t want any exposure to crypto just because they don’t know anything about it. They will be, they will, they will have ex exposure by holding NFTS or ordinals or any other to assets. Uh So that sometimes I think it’s a buyer for traditional collectors and we could see entering into a new phase maybe next cycle uh where uh NFT is digital art is really less uh uh correlated to crypto. Uh uh Sometimes I just wonder like do we really want or need these traditional collectors to be onboarded? We’ve created like this past three years, there have been like an amazing amount of collectors that created like a lot of volume in 21. Like thanks to the bull market, uh but which is still today in a very uh more reasonable market, uh very uh interesting and uh I and it’s mostly dominated by uh non by crypto native or NFT native uh collectors. So I wonder and if we need necessarily an un boarding, like the older generation of collectors, uh when we look at previous movements in the history of art uh there like, like for example, the Impressionism movement in the late 19th century, there were not like chasing or trying their best to on board. The older generation, we are collecting classic uh traditional art. Uh It, it just created really naturally a new audience that gets interested with their own generation of artists and aesthetic. And so it created a create this new generation of artists and collectors. Uh So I, I could see something else very similar happening with this new medium. Um And uh so I understand the will to bring also new uh actors into this market. Some of them have the very important buying power and also uh a certain sensibility to aesthetic and art and, and uh uh a knowledge of the historian of art. Uh but it may not be the, the, the key here in, in, in uh in growing. It’s interesting that you bring that up. You know, you’re saying that as the younger generations get older, they are maybe going to be interested in this type of art. And so your audience is gonna grow that way. Talk to me about the evolution of, talk to me about the evolution of generative art. That’s something that’s been around for a little bit longer than NFTS a little bit longer than crypto. It is something that uh maybe bridges the gap between traditional art and, and NFT art. How does generative art come into the discussion here? Yeah, I think Jatta is a very um special space uh place uh in the NFT space. But also in the way technology has uh impacted uh the application um and creativity for the artist. And it started with the computer in the 19 sixties. Um You have very difficult access to computers. There were only three in France in the early sixties, only for uh researcher and people working in the army, for example. And only a handful of artists had managed actually to get access to these computers. And uh there were already sort of conceptual artists. So thinking more uh putting forward the idea rather than the out uh the, the result of the work. And uh they had this chance of using the computer and created the first uh computer works based works. Uh And then this technology, we know it evolves very quickly over the past decades and it create, it, it gave uh first it allowed uh democratization of the use of the computer. Like from the seventies eighties, we see the computer being uh purchasable for any individual. And so the artist had access on daily basis with the computer and were able to actually advance even far, uh far and and quicker in the creation process. And so we saw a great development of digital art using computer in the seventies, eighties, nineties. And then with the web app, the, the use of URL and web pages as a canvas and then comes the Blockchain, which I think is the most important uh milestone uh within this uh 70 years of digital art because it has not only like uh enabled the a new tool to the artist, but it actually gave um onboard it a whole new pool of collectors. And no, no that is that were really interested in uh computer technology. And also then Blockchain. And uh and it allowed the artist actually to meet with their public and with their buyers and to be able to sell and to go to market in a very efficient way, something that for digital artists before it was very hard because it was difficult to uh collect. Uh And uh and I think um all together, like we created this uh this uh phenomenon that we know in uh 2020 2021 with the rise of generative atom chain uh and something that we are very invested in because I think it’s the most important evolution we’ve seen in the past uh decades in terms of uh the in the front pri there’s this concept and I may be using the term incorrectly. So forgive me of a digital twin. So having a physical piece of art and then a digital an NFT that represents that physical piece of art on the Blockchain. What we’ve spoken about so far today is traditional art and NFT art. Um one removed from the other. Do you think there is a future maybe for the traditional collector in having the digital version of their art on a Blockchain? No, having uh like a copy of the image that like they can enjoy having the copy in many different uh ways even as a poster as a photo. And so they can bring it in a home. They don’t have access to that painting, but that doesn’t give any that’s like the, the image on the Blockchain doesn’t recreate the aura and the originality of the work. Uh But what we could see and the the interest collectors may have is like having a digital certificate um that uh is the, that will be the most uh impermeable way to prove the to the provenance and the transfer of Anne of the work. Uh because um with time and the oldest, the works are the, the, the the, the more the provenance takes an importance in terms of value. And so the more Christian is the provenance and also the the knowledge of, of the, the the different hands and the different collector of this work been through uh the most valuable the work should be. So uh we, we think that there is a lot of we, we should see as uh a way uh for the Blockchain to impact the traditional art industry. Uh more on that front, on the city side. What was Sotheby’s NFT revenue in 2023? In 2023 we made close to 35 million of sales and including some records uh for, for unique work, unique digital works. Uh We were not in a bear market but we had uh the chance to, to really be placing ourselves as leading the high end of the market. And I think that’s the, the the tier of the market that’s felt the less uh because naturally, and we see that in the whole story of art with time, there is a selection being made in what becomes uh blue chip and what, what, which artist, which series from uh certain artists will pass the test of time. And so it goes, everything goes very fast, like a lot faster in the, in the NFT in the Blockchain industry. And we see we saw this process being very accelerated actually in the NFT space. And so there have been a selection of 1015, maybe 20 maybe a bit more of artists that really uh were less, they, they’ve been impacted but less impacted than other tier of uh of the market. And since we are focused on it, we’ve been less affected in terms of uh overall results. So $35 million in 2023 what percentage of the business or how big of a business would you say the NFT Art is compared to uh the rest of South of Visa’s business? No, we, we, we are a very, very large company. We have 52 offices, we have 80 categories, uh a few sales every day happening in all the of this uh categories. Uh But I think what is uh the the importance this department has for sub visits like the when we think in 5, 10 years and 15 years uh in like in the future because um we have 70% of our clients uh in the purchasing and selling NFTS are 10 years younger than the average client uh at OBI. And so we are definitely attracting a younger generation. I I think that’s something when we look at the future. Uh that is extremely valuable for a company like Sobis where we uh always need to understand what will be the needs and uh um and the demand uh in the in the near future. And also in terms of the technology because web three, that’s just the sale of digital art. But web three also can enable and facilitate a lot of the process we have currently in the arts industry. And so that’s something that we, we, we could uh see being very impactful for the company in the, in the future when it get more democratized. OK. And speaking of that future, if you were to look into the future, uh and take a peek at the future of art and the role that digital art plays in that, what do you see in 1020 years from now in digital art, I would see that the selection continue to be harder and harder. And we see uh just um uh uh one or two maybe artists from 20 that we know from 21 being still uh known and valuable. And then uh the artist actually being way more uh educated and understanding the way they can use uh this medium in a conceptual way uh in a creative way and uh starting to attract uh more traditional uh galleries institutions. And so uh we’ll see probably the top seller of uh the top selling artists coming in the next year to me. So uh we are still at the very beginning and on both sides, on both on the the purchaser and collecting side. But also in terms of the creation side, I think there is um a lot to, to improve also on the quality of the project we see Michael. Thanks so much. For joining the show. Thank you.

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