Why contemporary fine art artists are starving in Latvia?

Abstract

Purpose - the aim of the paper is to understand why fine art market in Latvia seems to be very slow despite rapidly growing global art market.

Methodology – literature review on contemporary fine art market and affluent society; review of wealth studies and fine art market reports for correlation analysis.

Findings - governments and philanthropists, thus deforming natural market balance of supply and demand, support Fine Art industry. Subsidies in Latvia are directed to art making, thus stimulating the supply. The paper proves that situation in Latvia is different from the global art market epicentres, where demand for the fine arts is high; there is a lack of local art buyers in Latvia, thus stimulating art creation is not supporting local art market. The article describes the ecosystem of fine art market, consisting of primary and secondary market for sales & ownership and support & inspiration environment. Two mandatory elements of the Fine Art market are the artists and the art buyers. This article takes deeper analysis of the art buyers as financial fuel for the whole industry. Recent decades have showed changes in wealth acquisition leading to changes in the art buyer values system, taste and art acquiring. This explains new phenomena in Fine Art market – buying artworks of live contemporary artists. Deeper analysis is done on finding correlation and regression of factors affecting art sales volumes in secondary art market in global art market epicentres. The main finding is that art market is strongly affected by the number of millionaires in certain cities. Since Latvia doesn’t have high number of rich and ultra-rich people, Fine Art market is suffering demand deficit and supply overflow, thus leading to “starving artist” phenomena. This means that all the efforts of the artists, galleries and government should be refocused to looking for additional sales channels and sales promotion on all levels of the industry.

Practical and social implications – contemporary fine art artists, their representatives, managers and galleries as well as government offices related to financing the industry and philanthropists willing to help the industry can directly apply the findings.

Originality – first time described contemporary fine art market ecosystem scheme, finding correlation of affluent society and art market sales volumes, redirection of subsidies towards sales and demand stimulation.

Research paper: contemporary fine art market research