I went to this art show on Saturday night featuring the artist Blek Le Rat. I had no idea who he was beforehand. To me, the art looked like it had no real skill involved. I recognized there was some sort of political meaning behind it, yet I had no idea what it was.However, as we walked into the place, I saw 400 people standing outside for over an hour just for the chance to see his art. I saw people begging the bouncer to get in. I saw tons of hipsters, intellectuals and wannabe Hollywood-types staring at his work and discussing what they saw. In this context, the art appeared more to me than if I had seen it in a Google picture search.
A friend of mine came up to me while I was looking at a white fence that Blek Le Rat had marked with graffiti. He said, "man...how awesome would it be to have this in my office? I bet that's going for about $20,000, though." Even though it was just a big white fence with graffiti on it, somehow, intuitively, I said, "No...I bet that's going for something more like $60,000." It turns out we were both wrong and it sold for $75,000.
Let me remind you... I've stolen thousands of dollars worth of music and tend to feel ripped off when I buy a $10 CD on iTunes. So why would two college students who steal thousands of dollars worth of music assume a fence should go for tens of thousands of dollars? Let's take a simple look at supply and demand. Everyone knows you want a low supply and a high demand in order to maximize total revenue. Blek Le Rat seems to control these two factors amazingly well, though.
Controlling supply is easy. He created the fence a few days before for the show so that it would be a completely unique piece of art. You can't get a lower supply than that.
Demand is where his talent shows. Obviously, his 20+ years of experience come into play. His background of guerrilla style artwork has intrigued a certain audience. But why did I assume his painting was worth $60,000 without any familiarity with his background before 2 days ago? He was able to manufacture a sense of demand through the organization of his event. It created an aura of importance around his works. For some reason, I associated the experience of being there with the stuff hanging on the walls.
I think this is a good lesson for anyone trying to make money off of intellectual property. Just because you might own the copyright, that doesn't give you the right to mandate a price for your art, or whatever it is. You have to give the buyer reasons why they should desire it, and the more reasons you give, the more they will want it and therefore the more they will pay for it.Blek Le Rat enhanced this desire among his audience by controlling a group of people's excitement over his event and, by association, his work. He didn't just throw an exhibit opening, he got enough people there so that there was a constant line waiting to get in. He created excitement through the presence and participation of other major artists in his field. He talked to people all night in a friendly and passionate manner to show his own excitement about his artwork. Booze doesn't hurt either.
With all of these factors coming together, he was able to build on his base demand from his supporters. With just his background story and art alone, he may have still sold it at a high price on Ebay, or some other distributor. However, there's no chance this guy would have sold it for anywhere near the ridiculous price of $75,000 that way. And just so I don't get the complaint that "it's not all about money," he also used this to build his case for new-comers to get excited about his art, and to get long-time supporters to feel their passion for his art renewed.
That's the best way I can explain why I would value Daft Punk's new album at $0, but a fence at $60,000. I'll keep thinking about it though. I'd love to hear anyone else's theory on the pricing of art, so whoever's interested, get your art-economics theory hats on.
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