Web-only art auctions: how will they work?

"Goodman and de Pury launch web-only auctions with promises to keep down fees" is the title of a piece of news from Roland Arkell, writing for the Antiques Trade Gazette ("the weekly bible of the fine arts and antiques industry"), here. According to this piece, in relevant part:

Two senior members of the international auctioneering profession launch separate online-only ventures this week. Tim Goodman and Simon de Pury are embracing the digital revolution, looking to challenge a centuries-old business model with a footloose approach to selling art and antiques at auction.

Goodman's Fine Art Bourse (FAB) hopes to gain traction in the market via an innovative pricing model. Meanwhile de Pury's eponymously titled firm is promising to reduce buyer's fees to 15%.

The headline statistic at FAB is that they will charge vendor's and buyer's fees of just 5% with a 72-hour packing and shipping service - so often a barrier to entry for bidding online - 'free' for both buyers and sellers. They add that transaction charges will be exempt of sales taxes or artist resale royalties, as sales are processed through headquarters in Hong Kong.

However, the devil is in the detail. Alongside the 5% cut, consigners and purchasers will each be billed an additional fixed fee to cover other charges. The 'fixed lot selling fee' of $330 applies for items estimated up to $100,000 and $1000 for items estimated at over $100,000. This covers collection, storage and photography while the 'fixed lot buying fee' at the same rates pays for packing, shipping and delivery.

Sellers will also responsible for paying insurance costs of 1%.  ... the pricing model is designed to reward sellers of higher-priced items, but at lower thresholds it is less attractive.
... 

Goodman believes the traditional auction business model - one where an auction house can take proceeds of up to 50% from the sale of a work of art - is no longer sustainable.

"Something has to give. All we have done is apply digital technology to some of the good old ways and cut costs," he says.  ..."

It will be fascinating to see whether and, if so, how these two new-technology approaches will catch with purchasers who are in many cases both traditional in outlook and idiosyncratic in their habits. Will they take business from the well-established auction houses or will they create and develop new business? And, from a lawyer's point of view, it would be good to know a bit about choice of law and forum for the settlement of any disputes that might arise from the use of these services.

Thanks go to John Walker for drawing my attention to this development.

Dammed if you do, damned if you don't: are sculptors worth more than scalers?

"Hoover Dam artist wins $1.3 million in copyright lawsuit" is the striking headline of an article by Henry Brean in the Las Vegas Review Journal, here. According to the author:

"An artist has won almost $1.35 million in a lawsuit over a sculpture commemorating workers who were paid $5 per day to risk their lives during the construction of Hoover Dam. A jury in Las Vegas federal court ruled last month in favor of artist Steven Liguori, creator of the bronze statue known as the “High Scaler” at Hoover Dam.

In 2011, Liguori sued Bert Hansen, longtime owner and operator of the Hoover Dam Snacketeria and the High Scaler Cafe at the dam, after the artist said he was cheated out of royalty payments and his work was used without permission for merchandise and marketing. According to the lawsuit, Hansen commissioned Liguori to create “High Scaler” for a $166,000 fee and a share of the proceeds from merchandise based on the sculpture as well as the artist’s other dam-related creations.

U.S. District Judge George Foley ordered Hansen to pay Liguori $1.2 million for breaching their agreement and $150,000 in other damages.

The sculpture at the center of the legal dispute is modeled on a photograph of a high scaler, a special breed of Hoover Dam laborer willing to clear loose rock from the walls of Black Canyon while dangling from ropes tied to clifftop eye bolts.

“They were the celebrity laborers on the dam,” said Dennis McBride, director of the Nevada State Museum at the Springs Preserve and a leading Hoover Dam historian. “They’d be sitting in their bosun’s chairs, and over the side they went.”

...  The Las Vegas law firm Hutchison &Steffen, which represented Liguori, announced the final judgment in the lawsuit Thursday. “A jury of his peers found that he just wasn’t treated fairly,” Hutchison &Steffen partner Todd Moody said of Liguori in a written statement. “Not only did they breach the contract they had with him, they also infringed on the copyright he had. And to be awarded the highest statutory amount was kind of the icing on the cake.” ...".

Damages for breach of contract and copyright infringement are nothing new and, by the standards of litigation in the United States today -- especially when compared with the massive damages awarded by juries for patent infringement in the same jurisdiction -- $1,3 million seems almost trivial. However, the juxtaposition of that sum against "$ 5 an hour" makes it sound unfairly large.  There is also the implication that it's somehow unfair for an artist to gain more financially from his art than is paid to laborers who risk life and limb while dangling from ropes, though the truth of the matter is that the supply of monumental sculptors is far more limited than the availability of high scalers, a factor that is inevitably going to be reflected in the contract terms offered to Liguori in the first place.