DGAP-News: artnet AG / Key word(s): Half Year Results/Development of Sales
Artnet Continues Advance
Berlin/New York, August 18, 2020- Berlin-based Artnet AG, the leading provider of art market data and online-only fine art auctions, is supporting galleries and auction houses during the coronavirus crisis by promoting their online visibility and by offering a rare opportunity to trade fine art via auctions on the internet. "The work of galleries and auction houses, Artnet's most important client groups, has become almost impossible to perform due to the coronavirus crisis. The solution remains the digital showcasing of artworks on the Artnet Gallery Network, the online platform introduced 20 years ago, and via online sales on Artnet Auctions," said Jacob Pabst, CEO of Artnet AG. "Galleries now depend almost entirely on the internet for sales and marketing. Today marks only the beginning of a trend that will lead to increased revenues for the Artnet Gallery Network." Meanwhile, the crisis is accelerating the digital transformation of the art market as a whole. "Art dealers are getting used to the digital way of doing business, as even small galleries can now communicate globally and transactions are becoming faster and cheaper," Pabst said.
Since its founding 30 years ago, Artnet has focused on making the art market more efficient. The Artnet Price Database, an online archive for auction results, pioneered price transparency in an opaque art market. Today, the entire art market relies on the database and its 14 million auction results to reliably assess the value of art. The Gallery Network provides a platform for galleries to reach a vast global online audience. Since 2008, Artnet has offered online fine art auctions, which are increasingly embraced by market participants. "Online auctions are quicker and more cost-effective than traditional brick-and-mortar sales, a business model that is becoming obsolete," said CEO Pabst. Artnet keeps the costs for online auctions low because artworks are not shipped from the seller to auction houses for exhibition, among other factors.
Due to the high-cost structure of the art market, traditional art dealers demand premium payments of up to 50% of the sale price. High prices discourage new buyers, keeping the market small and illiquid. While online trading leads to lower profit margins for dealers, it also promises higher sales. "This will create liquidity in the art market for the first time, making artworks true assets for wealth creation. Once transaction costs are lower and all information is available online, the art market will grow tremendously and reflect people's broad interest in art," predicted Hans Neuendorf, Chairman of the Supervisory Board and founder of Artnet.
Artnet's total revenue for the first six months of the year decreased slightly by 4% year-over-year to $10.4 million. "This result confirms the growing importance of our digital offerings," said Artnet CEO Pabst. "The current challenges for the art market demand digital solutions. As a leading online provider of information, analysis and auctions for fine art, we are in a unique position to benefit from the increasingly rapid digitalization of the art industry."
Sales volume at Artnet Auctions, the online-only transaction platform launched in 2008, grew by 13% year-over-year to more than $12 million in the first half of the year - contrary to the weak trend in the global market. Following the pandemic-induced market panic in March, sales volume in the second quarter rose by 46% year-over-year to $7.6 million. By contrast, global auction sales fell by 59% in the first six months of the year, according to the Artnet Price Database.
Advertising revenue fell by 20% to $1.9 million after a strong start to the year due to the postponement of advertising campaigns. In addition to luxury brands, art companies also temporarily cut their marketing budgets in response to the recession and the de-facto shut-down of the physical art market.
At the same time, the market's need for reliable information continues to grow. The news platform Artnet News emerged as the primary source of information for the art world, generating more traffic than all other art publications combined. The average number of unique users on Artnet in the first half of the year grew by 44% to an average of 4.8 million per month. "Until the outbreak of the coronavirus, 2020 was shaping up to become Artnet's strongest year ever for advertising. Given the rising number of visitors, especially on Artnet News, we expect demand to return once the pandemic subsides and the economy recovers," said CEO Pabst. "Until then, we will continue to support our customers by strengthening their online presence and offering them the opportunity to trade fine art on Artnet Auctions. The coronavirus crisis is accelerating the long-overdue digital transformation of the art market, and as the market leader in the online space, Artnet is more relevant than ever."
The Six-Month Report 2020 is available at http://www.artnet.com/investor-relations/quarterly-reports
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Artnet AG is listed in the Prime Standard of the Frankfurt Stock Exchange, the segment with the highest transparency standards.
18.08.2020 Dissemination of a Corporate News, transmitted by DGAP - a service of EQS Group AG.
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