Exclusive Interview with Jacob Pabst, Artnet CEO
THE SON BECOMES THE FATHER: Vision, art and business innovation
Jacob Pabst, Artnet CEO speaks to Dr.Asaf Rolef Ben-Shahar
about curiosity, vision and father-son relationship.
Asaf: Hi Jacob, perhaps you can start by sharing what brought you to choose the art world and Artnet of all the possible businesses you could have joined.
Jacob: Well, for a long time I was absolutely uncertain about what I wanted to do. I am a very curious person and there were many areas that interested me. I was born in Hamburg, Germany and was attracted to music, receiving classical piano training and being curious, about all types of music – from classical composers through soul and R&B to jazz. At the same time I was very interested in film and watched all the classic movies. On top of that I was always interested in art. I was also painting, but was not too confident about my talent. So it was hard to focus with such a broad spectrum of interest. At the same time, I love sports and am a keen soccer player. In the end, after high school, I decided to study medicine. I was accepted to study Medicine in Berlin and did an internship in a hospital, but then realized that I was not wholly convinced that this is what I wanted. It was only then that I applied for economics and completed these studies.
My father, Hans Neuendorf, who is the founder of Artnet, was an art dealer – one of the first art dealers in Germany, bringing top art to Germany. He founded Art Cologne and has discovered many successful artists, bringing many major pop artists to Germany. So from an early age I was surrounded by art and exposed to the art market.
Upon graduation from the business school, it was a time of a new economy and internet companies going public. My father was part of this movement, and although I was young, I did an internship in what later became e-bay. I was excited with Artnet and had exposure to it through my father, and became gradually more involved with this exciting new venture.
Asaf: It sounds as if your life was imbued with art, and in your joining Artnet, you made many transformations. Do you see your work as a form of art?
Jacob: Absolutely. I know that this is a piece of art. Running this business requires a lot of creativity, coming up with business ideas, thinking and acting innovatively.
Asaf: Must be exciting to finally find your medium of art.
Jacob: Yes, it’s really very exciting, and I enjoy the work very much and am fulfilled. But sometimes I wish that I was more closely involved with art, and I see myself doing this in the future.
Asaf: Thinking of future, where do you see the development of Artnet in the larger milieu of art in the world?
Jacob: Artnet has always been a few steps ahead. We are trying to change the art world, making art more accessible to more people. Going into a gallery can be an unfulfilling experience. You can enjoy the work, but you are not necessarily waited for, and it can sometimes be a condescending experience. Artnet launched the Artnet price database which made price information available to anyone by subscription, providing insight into the art market.
Asaf: You brought transparency into the market, democratizing it.
Jacob: Indeed. It was tough at the beginning. And it took us ten years to make this product positive, there was so much resistance to the price database. People threatened us, trying to take us out of business. I am sure that Artnet contributed to the development of the now flourishing art market. Later on, we launched Artnet magazine, which was the second online magazine in the world, and the first online art magazine in the world. Once again, it was new and innovative. And today we are in the same situation; we are essentially investing into new products and advancing the online auction platform.
Asaf: Say more about this future…
Jacob: Naturally, the internet is changing the ways transactions in the art market are happening today, and this is our number one priority, both from a business perspective and also in offering a platform for people to buy and sell art every day. We are making the market cheaper and quicker. We need no storage, expensive catalog productions, or space to show art. I believe more and more art will be offered online.
Asaf: Do you think it would make it easier for artists to make a living?
Jacob: It’s a good point. Not necessarily. It would always be difficult for artists to make a living. There are so many artists, and in the Western world you have to find a gallery that would represent you, and the big auction houses would not even touch you if you are not established. They cannot take risks, because the profit margins are so small. They can only focus on those artists whose sales are assured and this is where our model is more interesting. Since we don’t have such high costs, we don’t have to focus only on current trends. There are so many excellent artists who, just because they are not as fashionable right now it doesn’t mean they are not as good – and this is where we can offer a platform, we can really help these excellent artists.
If you are interested in selling a piece, most people run to the big auction houses, and they organize everything into two sales a year. It means that in many cases you have to wait four or five months for your money and transaction costs run around 30% and in some cases it can go to 40%. In Artnet we are moving towards a 24/7 platform. You can upload art quickly and sell it right away.
Asaf: It sounds so accessible. And what is the connection between the Artnet Gallery Network and the auctions?
Jacob: The gallery network essentially works like one large online art fair that takes place 365 days a year and is accessible 24/7. The gallery network is more a brand exercise, it’s about getting exposure. It is not a direct sales tool, even though this is of course the goal of the gallery. It showcases art, and assists in making contact and connections with people. The auction platform is a tool for selling and using our expertise and our reach to proactively sell for you. We focus on contemporary art, and our specialists check the quality and evaluate pricing and condition of each piece. Once the art is online, we use our network and we target specific customers by email or telephone with the help of our data analysts. We also work more broadly, through Artnet News. We don’t spend a lot of money on marketing because it’s so inefficient.
Asaf: What is your selection process?
Jacob: We typically don’t work with artists directly, but through the galleries. Artists come to us through the galleries. In China this is different. There is no gallery system, and artists go directly to collectors or auctions. But here, our main focus is galleries. Most of our work is with galleries and auction houses. We are selective with galleries not because of wanting to exclude but mainly because online space is not right for all types of artwork. People typically don’t know the artist well, if at all, so a little more is required in order to understand the artists and the art. That’s why we focus on the secondary art market, where we have a precise analysis of what people are looking for.
Asaf: And what do you see as the benefits of buying online?
Jacob: First, it is immediate – faster. Second, it is also cheaper. Third, compared to the traditional auction houses, we can cover a broader spectrum of artists who might be less popular right now for whatever reason (often there is no good reason) but we know they are good. And we can provide them with a market. These are the main advantages.
Asaf: Can you tell us about your relationship with galleries?
Jacob: We have good relationships with galleries. For one, they are our clients, be it through the price database, as many people are using it today including the big galleries and auction houses. We also evaluate artists or artwork for galleries. Further, we have developed a tool called Artnet analytics, which helps compare artists and artwork to other forms of investments. Lastly, galleries are our clients in using us to buy and sell.