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Comment by spectaclepiece | Hacker News Reader

The interesting metric in this relationship is the amount of money that actually goes to the artist.

A recognized artist at a mid-high level gallery is usually promised a show approx. every 18 months. Average earnings for such a show is commonly expected to be around $100.000, (10-15 works each selling for between $5.000 and $10.000).

That would be a decent amount of money for that time but here comes the crux; the gallery takes 50%.

This leaves the artist with an income of $50.000 before taxes. Say you live in Sweden, where you have to tax nearly 50% for sales in a private company that leaves you with $25.000 every 18 months in disposable income, hardly something you can get a flat in Stockholm for.

What's even worse is that if you are tied to a gallery you are most commonly prohibited to sell privately or show with other galleries.

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50% actually makes a lot of sense given the nature of the market.

In my opinion, the high art world depends heavily on the manufacturing of taste, brand, and scarcity for survival.

We have a $100,000 valuation for a painting that would never exist if we didn't get a bunch of people together who agreed, perhaps by mutual delusion, that the painting is worth $100,000, despite all the other artworks by other artists that are comparable that sit in other galleries for a meager $1-10K--if they'll ever even sell for that much.

This market only exists because both the artist and the gallery foster the illusions necessary. And the artists brand depends on getting into a high-tiered gallery just as the high-tiered gallery depends on attracting well-branded high-tiered artists.

So the market has decided a 50% split, and remember these splits are actually negotiated by the people involved since these are very high touch markets.

If the artist complains to much, there's always some other artist to groom. If the gallery complains to much, there's always another gallery for a "worthwhile" artist.

Now compare this to how developers pay 30% for a fixed price app in a store.

Given all the voodoo in the valuations, I could easily see why a gallery could negotiate for 50%.

It’s a fair argument, but of the dozens of examples I’m personally aware of, from the tiniest and newest galleries to the very biggest blue chip ones, the 50% split basically never varies. The galleries compete on other things including attending art fairs (where many galleries do most of their sales), controlling access to networks of collectors, good exhibition spaces, money and assistance to send works to museums and other non-commercial shows which raise the artist’s profile, insurance and storage of works, fancy dinners after openings, and advances to cover production costs.

I know less about how the gallerists balance sheets look at the end of their careers, but I’d suspect that more of their net worth has come from having insider knowledge to make strategic acquisitions of rising stars (at 50% off sticker price) and then talking up their book, than simply accumulating what profits are left over from their 50% after paying for all of that.

Well, kind of, except that's not really right. A Gallery usually represents an artist in a specific area. For example, in the US it might be that a gallery represents an artist in San Francisco, while another gallery does so in Los Angeles, another in New York, etc. Generally anywhere with a big enough market is going to have separate representation. That means that a mid career, or later, artist could have many galleries representing them. Generally they will be doing way more than one show per 18 months, generally around 3 to 4 per year in major areas, maybe even more if they have international representation.

Also, $5K to $10K per work is somewhat misleading. I depends a lot on the work, painting tends to be more expensive than photography for example and unique photographic works are generally more expensive than editioned work. A mid career photographic artist doing unique work can expect to start at $10K per work but it certainly goes up from there. A recognized artist with international representation is generally commanding much higher prices.

None of this takes into consideration other work, such as commissions, installations, advertising, books, etc. which can be very lucrative avenues of revenue.

Artists who have good representation in major areas are generally doing much better than $50K per year.

Honestly had no idea how those folks even made money. Thanks for that.

I'm curious where you get your numbers.

AFAIK the 50% is pretty standard but "mid-high level galleries" both sell a lot of work for more then 5-10K, and sell a lot of work outside the exhibitions.

I know a couple moderately successful painters and they are selling bigger pieces for well north of 10K and have a lot of collector interest, i.e. it's a conversation between the galleries and the artist about what gets reserved for a show and what might go to a collector as soon as it's dry.

That's not to say they're getting rich, but I think they're doing better than your example suggests.

[Edit] Also in case it's not obvious to folks w/o art-world experience, the gallery usually does a LOT for their 50%. Basically they take over the "business development" work -- all the schmoozing, the selling, the legitimizing. At least the good ones do. It's not just paying for the wine and hanging the art. Many even help arrange studio space and pay a stipend (against your share of future sales) if you need that to stay focused on the work.

> the gallery usually does a LOT for their 50%. Basically they take over the "business development" work -- all the schmoozing, the selling, the legitimizing.

This, of course, varies. An interesting/tricky part is that the gallery acts simultaneously as a manager, agent, and distributor of the artist's work. Imagine if Brad Pitt worked with the same company to handle his day-to-day affairs, negotiate his fees, and then sell the resulting movies. Not saying it's a conflict of interest, but it is an oddity of the art market.

Very true. Not only is there some conflict of interest built in, but unscrupulous gallerists can and do take advantage of the relatively weak position of emerging artists.

Funny you should mention Brad Pitt...

https://news.artnet.com/art-world/angelina-jolie-brad-pitt-a...

Minor point, but Sweden has a 50% Sales Tax? What's the source?

I see a VAT of 25%. https://en.wikipedia.org/wiki/Taxation_in_Sweden

This doesn't change your overall conclusion that not a lot goes back to the artist.

There is a 25% vat tax and then on top of that you have income tax which is around 25% at that income bracket.

25% VAT would mean that 50k paid by the gallery is 30k to the artist, not 25k.

(50k inc VAT is 40k revenue, less 25% of that revenue as tax.)

Correct, sloppy calculation.

Is the income tax net of expenses?

From what I know, If you're self-employed you'll also have to pay payroll tax, which makes taxes end up close to 50% without even taking taking sales taxes into account.

Your post uses periods for thousands separators and mentions Sweden, so apologies if my US-centric view is a tangent.

If you're including the taxes the artist pays, shouldn't you include the taxes the gallery pays as well? Both are presumably taxed on net income after expenses. Thus it's not as if the gallery gets to run off with 50% of the revenue (which you called "earnings," but I think you meant revenue) and deposit it in the bank. In the US, a professional such as an artist would file a Schedule C to deduct business expenses from business income and pay only the remainder.

Re your later comment, why does the gallery calculate its percentage before VAT rather than after? It seems lopsided that the artist but not the gallery should be subject to a tax on funds that neither ever sees. The artist's business relationship is with the gallery, not with the buying patron, so it seems VAT should be charged on the amount the gallery pays to the artist. Maybe that's just how it is, and maybe it's an artifact of an imbalance of negotiating power between the gallery and artist. But it seems wrong.

That’s the nature of retail. If my art was a USB cable, and my gallery was Best Buy, the markup would be similar.

How much the casino pays to chips factory so it doesn't manufacture more chips to sell them on the side?

Well of course the gallery will take 50%. They're the ones doing all the work. I don't know if you've ever met an artist, but most of them are quite unsocial and naive people. They don't know shit when it comes to selling, and I'm telling you this from the perspective of a computer geek, and they don't even care to learn. The gallery not only finds the people to buy the paintings but they also do constant PR work for the artists they represent, past well any exhibition, they talk with museums and collectors trying to promote the works, they provide legal and financial advice and so many other things.

> They're the ones doing all the work.

Because, you know, art arts itself.

> I don't know if you've ever met an artist, but most of them are quite unsocial and naive people

God, I wish you were talking about me so I could use it as a quote. That's hilarious.

Your comment is getting downvotes for your casual absolutist statements, but you have a point.

An interesting illustration is that one avenue for artists to get paid for making art that side steps their gallery arrangement is public art for municipalities or integrated into new building construction. Lots of artists end up doing more poorly than they expect with these projects, because they lack or are never taught good project management skills, and they suddenly have to manage a budget in the hundreds of thousands, and attend or lead meetings with engineers and architects. OTOH, artists who have more of these skills can end up doing really well once they have a few successful projects under their belts.

Whoever thinks that galleries take too much of a cut could very easily try and market their work themselves. Or better yet, try to disrupt the art world by building an online art gallery that takes let's say just a mere 10%. After all, online sales are on the rise.

But guess what. Even online platforms take a significant cut. Why's that? Because marketing to the rich and well-off has a significant cost that's much higher than running a targeted AdWords campaign. You have to be out there, talk to people, attend art fairs and galas, socialize, then socialize more, network with critics and journalists who are considered influential, negotiate with collectors who will try to rip you off and do it constantly. On top of that, if you're one of the renowned galleries and an artwork for an artist you represent goes on sale at an auction at a low price you pay from your pocket to keep the price high in order not to hurt the reputation of the artist.

So yes, I'm making generalizations but I've also happen to work in the art world and I've seen how things work. Owning and operating a commercial art gallery is all about personal connections and that costs.

Making art is arduous, risky, expensive, and often a very lonely endeavour. Galleries can do a lot of great things, but they are not the ones doing all the work.

>I don’t know if you’ve ever met an artist, but most of them are quite unsocial and naive people.

This is entirely no longer the case. The competition and the art school system now eliminates those who cannot market themselves to the galleries. Being an artist is almost entirely a marketing profession now. I’ve done development for a handful of contemporary artists and it is very clear they are not on any idealistic or creative journey. They are simply salespeople.

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