TPR Podcast Episode 3 – The Artist as Businessman

My friend Stuart Allen has strong ideas. Art and money can (must!) coexist. The myth of the starving artist does not serve artists or the art world well. Art school is great, but sometimes errs on the side of training art teachers rather than artists. Artists would do well to treat their practice like a small business.

I already admired Stuart’s art – we have a piece of his in our home. But his business sense is also quite admirable!

Stuart Allen

I’m proud of this conversation we had for No Hill For A Climber, my new podcast with Texas Public Radio. You can even listen on Apple podcast and Spotify. And you should absolutely subscribe and rate it and comment and do all the things!

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The NFT Revolution

NOTE: This one ran in the San Antonio Express News back in May 2021, and its being posted a bit late. 1

San Antonio-based graphic and web designer Ron Garcia works at the intersection of technology and art. On May 8th he and his fellow members of RePublic Arts Collaborative will host a gathering “The Revolution Will Be Digitized,” in a near-downtown studio, featuring physical art as well as digital art at auction in the form of NFTs. 

Non-fungible tokens (NFTs), as you may know, are THE art trend of 2021. Collectors can purchase individual copies of digital art, verified and authenticated with their NFT certifying ownership. If the NFT-linked art ever changes hands between collectors, that will be tracked, and artists can collect a commission on the sale.

Warning, a brief word salad ahead:

Garcia’s preparation for the show includes teaching artists how to upload the digital files of their work to the Ethereum blockchain. He also coaches them on how to create a digital wallet, linking their regular bank accounts to Coinbase, which serves as a place to store cryptocurrency. As part of the link of art pieces to an NFT, artists will need to pay the “gas fee” needed to mine a unique Ethereum coin that will serve as the NFT.

Are you with me so far? Not really? I’ll spend the rest of this space unpacking that word salad above.

Blockchain is the term for distributed computer networks that create a permanent database (like a fancy spreadsheet!) that allows anonymous participants to verify storage of data and transactions without any central authority. The point of linking an NFT to digital art is to offer a permanent certificate of authenticity as well as a way of tracking the art’s authorship and the collector’s ownership. 

NBA TopShots kicked off the mainstream NFT market

Garcia purchased an early NFT released by the National Basketball Association, which pioneered the issuance of blockchain collectibles with something called NBA Topshots. NBA Topshots are digital video clips with stats – basically like online playing cards – first released in October 2020. Garcia bought one for $14 and later reports flipping it for $1,000. That experience opened his eyes to the possibility of NFTs for artists. Why couldn’t his fellow artists participate in and benefit from this emerging technology?

Garcia – like others attracted to the NFT market – foresee the increasing importance of the Metaverse, a virtual reality that exists either apart from or alongside physical reality. In the Metaverse, humans will need to populate their living areas with video or static digital art. When you observe young humans like my teen and pre-teen constantly interacting with their friends via screens, I think the Metaverse is not far away. It’s actually kind of here already.

“Society is changing to a whole new form,” says Garcia. “All these different things are happening. I saw that NFTs are part of that whole turning. We’re going from the physical space to the virtual space,” he continued.

Digital art NFTs use the blockchain associated with the cryptocurrency Ethereum, making that preferred medium of exchange for art-linked NFTs. The Ethereum blockchain works similarly to, but does not interact directly with, the better-known Bitcoin blockchain. 

Coinbase is a company that facilitates blockchain transactions, charging fees for services like offering a digital cryptocurrency “wallet” to individuals. Coinbase Global Inc went public on the NASDAQ stock exchange with a direct listing in mid-April. 

With a market capitalization above $60 billion, Coinbase is evidence that some investors believe in the staying power of blockchain transactions, as well as the fees that Coinbase can charge cryptocurrency participants. 

Garcia views the fees from Coinbase as high, but hopefully someday soon will come down through competition.

Let’s now review the good, the weird, and the bad of NFTs.

The unquestionably good: Artists who work in digital media – including video and music – have a new tool for creating and selling limited-quantity or individual pieces that collectors can own. 

When Napster made music incredibly easy to reproduce and pirate illegally around the year 2000, musicians lost their ability to earn music royalties. Music streaming services have since gone a long way to solving that problem. 

NFTs may, analogously, allow artists to earn money through the sale of their work that otherwise might be infinitely reproducible and pirate-able. Earning additional commissions each time a piece of art changes hands has so far been generally impossible with physical art. So NFTs are maybe a helpful leap forward for digital artists. 

As a technology, NFTs represent the first blockchain application that I think solves a real problem – specifically, the problem of verification and authentication of art and ongoing payments to artists.

Here are as couple of weird NFT outliers that happened in March 2021, as these things exploded in popularity.

NYTimes_NFT
So damned meta

New York Times business columnist Kevin Roose arranged the NFT auction of a digital image of his printed newspaper column about NFTs, which sold for the equivalent of $560,000.

The big weird one, the one that conferred global art legitimacy on NFTs, was from Beeple.

A digital artist named yes, Beeple, sold an NFT via auction house Christy’s a digital montage of his images named “Everydays: The First 5,000 Days,” for $69 million. 

As a result of these outliers, and as a responsible finance guy, I feel obligated to attach a warning sticker on this new thing. NFT art is not worse than signed baseballs or rare stamps or first edition books. It’s not even necessarily worse than paying $100 million for a physical Van Gogh or Picasso, if that’s the scale you operate at, financially.

Beeple_Everydays
Beeple’s Everydays

But they are also not suitable as investments. 

As art? Sure. As a neat technology? Definitely. As an expression of your values? Very cool, I love it. But only burn money on this that you would otherwise dedicate to collecting for non-financial reasons, please. Please don’t dedicate your money to this in the hopes of a quick flip. Turning $14 into $1000 quickly on an NFT flip, as Garcia did, should not be your financial expectation.

The emergence of NFTs this year exposes the different fundamental worldviews of different types of people. Technologists, of course, will embrace NFTs, for their clever deployment of blockchain to solve a problem. Artists, unquestionably, should welcome the emergence and adoption of NFTs. 

“A lot of artists are afraid of technology. It goes against their artistic sentiment somehow,” adds Garcia. “On the local front that’s the biggest contribution I can make.”

Financial types – and I’m mostly in this camp – view NFTs with a combination of awe, worry, and shadenfreud-ish skepticism. 

Of course as a business columnist I also cannot help but slow clap, nodding sagely in approval that someone somewhere would spend over $500,000 for a digital copy of a newspaper business column. I am absolutely on board with any reader of this column, for example, looking to create a collector’s item of my own work. Heck – you could even buy this from me at half price. Let’s say $250,000 as a starting amount, just to be fair all around. Hit me up, let’s collaborate.

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  1. Since NFTs could very well disappear forever as a thing in the next month, or they could become the most important invention since sliced bread, I figured I should post it before people entirely forgot how crazy NFTs seemed in the Spring of 2021

Art Lessons For Business

A version of this post ran in the San Antonio Express News

found_marble

You know what’s hard about producing art?

Getting paid.

I don’t usually turn to the art world for my lessons on business, but I’ve been thinking lately about San Antonio glass artist Justin Parr and what he’s been doing with the “Esferas Perdidas” project, a model for creating financial value for art.

For the Spanish-language-challenged among you, “Esferas Perdidas” means “lost spheres.” Parr and fellow glass artist Sean Johnston, along with their glass artist mentor Jake Zollie Harper, began in January 2014 posting pictures of their large glass marbles on Facebook, with a “Lost” announcement, and photographic clues as to where, in the San Antonio area, seekers could find the artistic treasure.

A hunt among glass marble enthusiasts follows, typically with a follow-up “Found” posting of the marble, often with the obligatory happy selfie-with-marble posting by the fortunate treasure-finder.

In the months since their launch, and in particular after a prominent photographic slideshow in the San Antonio Current, the community of marble keepers and marble seekers has grown quickly. Currently at about 5,300 Facebook members and counting, a constant stream of participants is losing their marbles over this game.

A little while ago I happened to be sitting with Parr, sharing a fermented beverage at his favorite watering hole The Filling Station in the minutes following a “Lost” posting on Facebook.

“Here they come,” he commented mildly, as a woman dismounted and leaned her bicycle against the outside of the building. She began closely inspecting the landscaping, checking under the picnic tables and lifting up used food trays.

Soon a pickup truck pulled into the driveway, and out jumped a bearded man, a friend of Parr’s.

“He’s here for the hunt as well.”

A few more arrived before the first woman announced her find.

“It was in the palm tree!”

Selfie snap, upload, “Found.”

“Nice work.”

The slow-motion mini flash mob dispersed over the next five to 10 minutes.

When another artist and hipper-than-thou friend of mine complained publicly about the “commercialization” of the “Esferas Perdidas” project, Parr responded with a commercially friendly post that I’d summarize as “Who cares?”

Parr’s marbles normally retail for between $25 and $300, but the “Esferas Perdidas” project has expanded the market for his and others’ work.

I see three possible business lessons for the art world from the “Esferas Perdidas” project:

1. Help build a community that values your art, but let the community make their own rules.

2. Create a back story for your art.

3. Give it away for free, and a paid market may develop.

Parr is thrilled that many glass artists — not just the project’s founders — can get paid more, and more often, for their work following the “Esferas Perdidas” project.

glass-blower-sean-johnston
Glass blower Sean Johnston

Parr watches prices online, noting that San Antonians often dominate the national marble auction market in the wake of the project. At the highest end of the marble market, collectors pay up to $3,500 for the work of master marble maker Yoshi Norikondo.

Community rules

Parr’s fascinated that the community of “Esferas Perdidas” fans has taken a simple idea that he and his fellow glass artists had and have developed a set of unwritten community rules and mores around hiding, finding, posting, and valuing his art. He’s flattered that “Esferas Perdidas” communities have sprouted in New Jersey and the Pacific Northwest.

Back story

Part of the value of certain art and collectibles of course has always derived from the back story. Philatelists salivate over the British Guiana 1c Magenta in part because of the back story of war reparations, elaborate auctions and burned copies.

This "1 Cent Magenta" last sold for $9.48 million in 2014.
This “1 Cent Magenta” last sold for $9.48 million in 2014.

Every time one of Parr’s or his fellow artists’ “esferas” goes “perdida,” seekers have an adventure that creates a particular story and memory for the item. I assume this ups their value permanently.

The first ones for free

In addition, the fact that some marbles can be obtained free, through the personal effort of the hunt, in no way has lessened the demand for the purchased kind. On the contrary.

Parr says that many participants in the community pay full price for newly created marbles for the intended purpose of hiding and giving them away to others.

I’m fascinated by the “give it away for free” model that they’ve employed.

I’m intrigued by the “catalyze the idea” but then let the community determine what happens next with your art, or with your product.

And I’ve got to be happy when artists move closer to getting paid full value for the art they love to produce.

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