Art World Players Rethink The Auction Marketplace

Collectors have long enlisted dealers or auction houses to help resell their art holdings because such insiders typically have up-to-date pricing data and access to potential buyers.

Now, in the latest challenge to the art world’s status quo, a team led by former Sotheby’s rainmaker Adam Chinn plans to launch a peer-to-peer digital marketplace later this month that will invite collectors to sell high-end art to each other, directly and anonymously. Listings in an early version of the site, called LiveArt Market, include an Andy Warhol “Rorschach” from 1984 valued around US$200,000 and Jack Pierson’s 2009 sign, “Glory,” valued around US$85,000.

The move comes as all sorts of art-world players rethink the traditional ways art gets traded online, from former Christie’s auctioneer Loïc Gouzer’s Fair Warning auction app to the proliferation of digital platforms selling NFT artworks. Even as the art world’s attention increasingly pivots back to in-person art events including fairs, online sales of luxury goods remain robust and some top industry dealmakers see a bigger market opportunity in finding fresh ways to sell art to collectors accustomed to shopping for art online.

“Collectors go to gatekeepers because they need pricing info, but we want to put collectors in control,” said Mr Chinn, Sotheby’s former chief operating officer. Late last year, he teamed up with artificial intelligence experts and former auction specialists like George O’Dell to buy and retool Live Auction Art, then an auction-tracking data site. The new owners have now equipped the site, renamed LiveArt, with machine-learning technology so it can analyze auction data and give users free, real-time estimates of their collection’s likely market value. The key to success will be convincing collectors that LiveArt’s pricing and provenance services are as reliable as those collectors would get from the auction houses.

The architect behind the tech is Boris Pevzner, a graduate of MIT known for creating and selling several companies that use AI-driven algorithms, including one that resolves freight-shipping issues and another that manages art collections, Collectrium, that he sold to Christie’s in 2015.

Starting later this month, LiveArt will add the marketplace component to double as an online platform for private art sales. People can upload artworks and specify any details they want shared or kept from potential buyers, including their own identities. Once listed, an artificial intelligence bot on the site will help them sift offers or field questions from potential buyers—like bots on retailer sites already do—as well as mediate deal terms so both parties remain discreet, if they choose. Once under contract, the seller will be asked to ship the work to the company’s clearinghouse in Delaware, where conservators and former auction specialists will check its condition and vet provenance before sending it on to its buyer, Mr. Chinn said.

He added that LiveArt has hired a team of provenance researchers, including some from Phillips, to vet work and if there are provenance disputes between buyers and sellers, the site will offer mediation. (LiveArt only charges buyers a flat 10% fee for any sales versus the big auction houses which can charge more than 20%.)

Christie’s and Sotheby’s didn’t immediately comment on Mr. Chinn’s new venture.

New York art adviser Alex Glauber, who isn’t involved with the venture, said the matchmaking element of a peer-to-peer digital marketplace could “solve a practical problem” for collectors who want to sell middle-market pieces without paying steeper fees to an auction house or wrangling a gallery to promote their consignments ahead of the gallery’s own inventory or artists.

Mr. Glauber said he plans to upload a few pieces to test the experience before he suggests it to his clients. He said the challenge will lie in persuading a “critical mass” of sellers, who typically prize discretion, to reveal the art they’ve got in storage. “Even with all the security assurances, some people may be reluctant to push their pieces online,” he said. “It’s going to take some convincing.”

David Rogath, a Connecticut collector who owns pieces by David Hockney and René Magritte, said he also has no ties to the venture but said he has bought and sold plenty of art through Mr. Chinn during his tenure at Sotheby’s, so he’s intrigued by the platform. “I have things I want to sell and things I don’t want anyone outside my family to know I own, and Adam understands discretion is key,” Mr. Rogath said.

Mr. Rogath said he used LiveArt’s pricing tool to test the values for several works he’s owned over the years and said he found them accurate. Mr. Rogath also said the site appears to smooth out some “speed bumps” that have historically dissuaded top collectors from brokering major sales to each other, including the logistics of hiring third parties to research and vouchsafe a piece’s condition and authenticity. If a platform can take over those real-world hassles, he said, “For a collector, there’s an allure to cutting out the middle man.”

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Investors should pay attention to that distinction. When Meta Platforms META 3.38%increase launched its Muse agent last month, travel stocks including Booking Holdings BKNG -1.19%decrease, Expedia and Airbnb all fell sharply.

Airbnb, though, has a real chance to emerge as a winner from the upheaval. The catch: Its stock already reflects above-industry growth. To justify its valuation, Airbnb will need to turn repeat customers into loyal ones.

Online travel companies make much of their money by simplifying search and collecting fees on bookings. AI agents threaten that model.

But not all travel marketplaces are equally exposed. Booking and Expedia largely sell hotel rooms that travelers can also book directly or through competing sites. If an agent can find the same room elsewhere, it has little reason to favor either Booking or Expedia.

Booking and Expedia also sell sponsored listings that steer travelers toward particular properties. Wells Fargo estimates those will account for about 8% of Expedia’s revenue and a much higher percentage of profit next year.

Airbnb has more ways to adapt. More than half its listings are available only on its platform, and more than 90% of its traffic comes directly to its app or website.

The customer relationship doesn’t end after booking, either. Bernstein analyst Richard Clarke notes that 90% of Airbnb guests go on to message their hosts about arrival times, keys or local taxes, giving Airbnb a connection to both sides of the transaction.

How the companies have responded to the possible agentic future is telling.

Expedia quickly signed on as a Muse partner. Airbnb hasn’t, and Chief Executive Brian Chesky says AI chatbots have so far been a boon, sending customers to Airbnb’s website.

Chatbots might work for buying paper towels, he quipped at a Skift conference last month, but people enjoy planning trips. He argued that browsing dozens of homes isn’t something a text-based chatbot is well suited for.

Still, the AI jitters arrived just as Airbnb was persuading investors it deserved its pricey multiple. For years after its 2020 initial public offering, the stock—which trades around 25 to 30 times forward earnings—went nowhere. Investors saw a mature operator trading at a growth premium.

This year, Airbnb growth seems to be accelerating. The stock jumped in August after the company raised its full-year revenue-growth guidance with its second-quarter results. Wells Fargo analyst Ken Gawrelski credits a run of product improvements under a revamped leadership team.

Among the changes: letting guests reserve now and pay later, adding hotels, and a redesigned home page and app. Investors were also betting on what comes next, including thousands more hotels, car rentals and, eventually, advertising.

The irony is that some of those growth drivers push Airbnb closer to the kind of business Booking and Expedia run—the kind of business AI agents could threaten. Even if AI agents capture a large share of travel planning and booking, Airbnb would capture the demand. But it and others would slowly lose control over how customers find and choose properties.

That would undermine the advertising opportunity investors are counting on. The bigger point for Airbnb and other marketplaces is that losing control of customer acquisition could mean surrendering some of their pricing power and margins.

To bulletproof itself, Airbnb might look to another e-commerce giant that has so far kept AI agents at arm’s length: Amazon.

Like Amazon, Airbnb has a loyal customer base and hard-to-match supply. But it has nothing like Prime membership to make customers think twice before taking their business elsewhere.

That is where loyalty comes in. Business travelers stick with Hilton or Marriott because enough nights earn them perks. Leisure travelers rarely accumulate stays with one chain. Airbnb has millions of listings and plenty of repeat customers, but no broad rewards program. It has begun experimenting with credits on hotel stays, but it should make loyalty a priority, not just a promotion.

Airbnb also plans to launch its own AI agent next year. But travelers using an agent might still want it to search Airbnb, Vrbo, Booking and hotel websites alike, rather than limit itself to one company’s inventory.

Eventually, Airbnb might have to strike deals with agent makers, using its unique homes as leverage to negotiate favorable terms, says Gawrelski. Such deals, along with rewards for loyal guests, could over the long term eat into the company’s roughly 13% take rate, he adds. But if they bring in enough additional bookings, the trade-off could be worthwhile.

History offers a reason not to panic. The shift from desktop to mobile unsettled investors in Alphabet and Amazon, but both emerged as major beneficiaries. Companies with valuable assets can come out of a platform shift stronger, if they adapt quickly enough.

Airbnb has homes the bots can’t easily replace. Now it needs to give guests a reason to insist on booking them there.

Art World Players Rethink The Auction Marketplace

A new peer-to-peer digital platform lets high-end collectors buy and sell without the middleman.

AI-powered travel agents are challenging online booking platforms, but Airbnb’s exclusive listings and direct customer relationships could give it an edge. Its next challenge: turning repeat guests into loyal customers through stronger rewards and innovation.