Continuing recent trends, retail sales of museum-licensed merchandise showed greater strength than products tied to artists and their works. Museum products grew a modest 1.0%. But survey respondents attributed most of that limited growth to a small handful of museums with robust licensing programs in the U.S. (including the National Gallery and Museum of Modern Art) and London (notably the Victoria & Albert, Tate Gallery, Imperial War and Natural History Museum).
The larger art and artists segment, which accounts for roughly 75% of all licensed art sales, followed up a flat 2013 with a 2.5% decline in 2014 (from $4.25 to $4.14 billion).
|Note: Numbers may not add up exactly due to rounding.|
|(Figures in Millions)|
|Property Type||Retail Sales, 2014||Retail Sales, 2013||Change, 2013-2014||Share of Market, 2014|
|Art and Artists||$4,147||$4,254||-2.5%||4.2%|
Product Category Trends
Not a single product category in the art sector posted growth equal to the overall licensing industry growth rate of 2.5%. The two categories that came closest, at 2.0%, were domestics at $393 million (7.1% of art sector market share) and furniture/home furnishings at $238 million (4.3% market share). Housewares (9.8% market share) posted respectable 1.5% growth. Wall art and home textiles were bright spots, albeit ones facing saturation and price declines.
As usual, the two biggest product categories in the art sector were stationery/paper with 24.3% of market share and gifts/novelties at 22.2%. And as in previous years, both of these categories were sharply down industry-wide in 2014. But unlike in previous years where licensed art products in these categories actually grew despite industry-wide downturns, this year, the art sector also took its lumps on these products with stationery/paper falling 2.5% (as compared to industry-wide decline of 3.5%) and gifts/novelties down 4.1% (versus 5.0% decline industry-wide).
Adding insult to injury, publishing, the third largest product type in the art sector with 15.1% market share, fell 1.4% despite growing 3.0% industry-wide. “Social media has really hurt art book sales,” lamented one publishing licensee.
|Note: Numbers may not add up exactly due to rounding.|
|(Figures in Millions)|
|Product Category||Retail Sales, 2014||Retail Sales, 2013||Change, 2013-2014||Share of Market, 2014|
Fine Art v. Commercial Design
Even though it declined last year, the art and artists segment has actually grown in the long-term ($4.09 billion in 2009, versus $4.23 billion in 2014). Much if not most of this growth has come from fine arts, i.e., the segment that involves licensing the works of famous artists, both alive and dead. “Fine art properties have moved beyond their traditional high end product niches like couture and porcelain dinnerware,” notes one consultant. “Although you still won’t see Warhol and Basquiat products at Walmart, you are starting to see them at Uniqlo and on Converse sneakers.”
But while fine arts continue to thrive, the picture is far less rosy for lesser known commercial artists who create artwork and designs for use in consumer products. The good news is that there are more deals than ever. “Brick and mortar retailers need a constant flow of new products to keep the shelves lively and attract customers,” notes one agent. The bad news is that the deals are shorter and less lucrative. The pressure to “continually refresh” has compressed product development, shortened shelf life and depressed royalties. “We have less time to prepare and pull designs for manufacturers that are working under tighter deadlines and schedules,” according to one Survey respondent. The bottom line: Commercial artists are working harder and longer for less money.
Impact of Social Media
The social media trend that has affected the entire licensing industry has been particularly pronounced in the art sector—not so much regarding consumption patterns but on the production side. For one thing, artists tell us that they’re making more extensive use of Twitter, YouTube and other social media outlets to promote themselves, their products, and upcoming events. As one agent noted, “Pinterest is a huge design influence in the gift and stationery markets.”
“Many artists work alone in their studios and social media is their only connection to the outside world,” says one agent echoing the thoughts of other survey respondents. “They use LinkedIn, blogs, Pinterest, Facebook, Snapchat, etc. to share their work, seeking feedback and direction, and affirmation. They use [social media] to ask legal advice, to ask for licensee contact information, trade show tips, and product development templates. They share information that heretofore was highly protected and proprietary. It is shrinking the learning curve and creating an enormous supply of art flooding the market.” Result: lower royalties and/or guarantees, due to the laws of supply and demand. “Guarantees and advances for commercial artists have become all but extinct,” adds an agent.
Social media is also changing the role of the agent. “A lot of creative directors are prowling Etsy on their own and discovering new talent without going through the traditional routes of agents and submissions,” said an art-licensing executive. “A new cottage industry of consultants is also booming and artists are paying hundreds of dollars to take on-line and in-person classes on how to market their art and make themselves into a brand.”
“Art licensing agencies continue to move into training, consulting, and even fee-based ‘contests’ to replace lost revenue,” added another agent. “New artists are having difficulty finding agency representation, and some are forming co-op type groups to share marketing and trade show expenses.”
Other Business Trends
Other art-licensing trends noted in TLL’s 2014 survey:
- Newer and smaller companies are approaching artists about licensee opportunities. “Many young companies cannot afford the excessive licensing fees of big brands, which often have higher advance and guarantee requirements than art licensing,” explains a licensing executive working for an artist.
- New channels of distribution are showing more interest in art-based properties. For example, “Dollar, drug, and grocery continue to grow as a destination for licensed art as they demand more sophisticated design,” one agent observes.
- More artists are selling rather than licensing their art. This represents a departure from recent trends which saw the growth of licensing over sales as the preferred commercial channel.
Some of the creative and design trends noted by survey respondents and interviewees:
- Street art: Graffiti has emerged as an inspiration for commercial art. “Graffiti resonates because it’s real and satisfies the growing consumer demand for artwork that they can relate to as part of their everyday lives,” explains one consultant.
- Tattoo art: The evolution of the tattoo as an accepted fashion accessory has made art inspired by tattoos increasingly popular.
- Decline of text-based art: As predicted, the hot trend of mixing art with purely typographical images that took off in 2013 fizzled out in 2014. The same is true of message-based (particularly chalkboard) designs.
- Kittens: The one trend to show legs—four of them, in fact—was kitten art. “The kitten may just be the Marvel Superhero of the art sector in terms of staying power,” chuckles one licensing agent.
Even though 2014 turned out to be a forgettable year, artists, art-licensing agents and retailers remain optimistic about the future. “Art is an evergreen category. Tastes and trends come and go but what never changes is the demand for art-licensed products across a wide swathe of categories.” “I think that in 2014, we saw the first real signs of retail recovery,” says another observer. “More enthusiasm, more projects being licensed, more energy, more demand.”