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The Impact of COVID-19 and the Resilience of the Art Industry

​Previous financial crises, notably the Great Depression of 1930 and the Great Recession of 2008, function as solid indicators for the state-of-the-art industry as we slowly emerge from lockdown restrictions. Financial crises have a massive economic, social and cultural impact, and the one that will very likely be instigated due to COVID-19 will be no different.


Image of a db Waterman artwork related to the global pandemic. It shows a man with a gas mask in a train, surrounded also by green leaves.

The Economic Impact of Covid-19 on the Art Industry


Spurred by the Lehman collapse, the turmoil of the global financial markets in 2008 did not materially affect the volume of sales until well into 2009. Just when equity prices started to rebound, the average number of expensive artworks bought declined. In terms of prices, effects fluctuated across various collecting categories. Whereas the postwar and contemporary index was down 33% for the year, the impressionist and modern art index fell only by 4%. Yet, compared to the 57% by which the S&P 500 had decreased by March 2009, the art industry seems to have been fairly resilient. Moreover, where the S&P 500 took five years to recover from the 2008 recession, the Artnet Index for the Top 100 Artists needed only three years.


For the present crisis, it remains speculation what exactly will happen to the industry in a few months’ time. Thus far, it is clear art collectors have been looking to sell their art in order to obtain enough liquidity as collateral to meet margin calls on their quickly tumbling equity portfolios. Indirectly, this seems to indicate that there are also still buyers willing to acquire art even when a crisis is looming. Yet, with regard to art in lower price categories, where art is merely treated as a luxury item rather than an asset class to invest in, there is very little hard data on the impact of a crisis on somewhat smaller artists. Although this is an excellent time for wealthy investors to acquire art at a relatively low cost to have it grow in value over the next few years, retail buyers are likely to refrain from buying luxury items at present.


​Thus, art from lower-price classes is likely to suffer disproportionately from the consequences of a financial crisis as compared to highly-priced art. Moreover, evidence from the previous financial crisis suggests that effects can even differ between various art streams. There is nevertheless the overall positive outlook that whatever consequences the industry suffers, it is likely to restore more quickly than other industries.


Image of a db Waterman artwork related to the global pandemic. It shows a large building with in every room a face.

The Effects of Lockdown on Artists and the Industry


The lockdown and ensuing social distancing restrictions come at a great price for both artists and audiences around the world. It will be very interesting to see whether the lockdown and coronavirus crisis will inspire a new art movement similar to how Modernism was encouraged by the Great Depression of 1930.


Undeniably, this situation of hardship and quarantine will also lead to newfound inspiration, whether that be expressed through depictions of isolation and separation, or through a critical rejection of the political status quo. Conversely, there might be an upsurge in art that offers an entirely different experience than what we have had during these past months. As Pablo Picasso is reported to have said: “The purpose of art is to wash the dust off daily life off our souls”. Art that could help with distraction and diversion of our thoughts could not come at a better time.​​


Further, COVID-19 has proven to give a technological impetus to the art industry, directly playing into the previously developing trend of digitalization and globalization. Around the world, physical exhibitions are replaced by virtual ones, and an artist’s online presence and social media portfolio more than ever play a vital role in being noticed and receiving invitations. The influx of virtual exhibitions offers another benefit: the de-utilization of the art industry. Online viewing might not give you the physical sensation of seeing a powerful work, but it offers an extremely accessible way for a large group of people to enjoy art on their own terms and in their own time. There is often a certain gravitas to visiting an art gallery, and not everyone may be comfortable in this environment. Moreover, not everyone may have the time or resources to travel to different galleries. The virtual exhibition trend, thus, offers a way for the non-elite to see and enjoy art from all over the world in an easily accessible manner.


Finally, it has been incredible to see the movement of artists donating their art to be auctioned off for charity. DB Waterman did participate in this and donated the artwork ‘$335 Dollar Dress’ to KazoArt.


​Overall, it is unquestionable that there will be large changes in the art industry, at least for the near future. Evidence from the previous financial crisis gives us some indication of what to expect financially, but only the future will tell us the true effect unprecedented lockdown and social-distancing measures have on the industry and on the artistic mind.

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