In an exclusive interview with Michael Bouhanna, Director of Digital Art and NFT at Sotheby’s, we set out to find out how the renowned auction house sees Web3 in its business. Is blockchain technology set to completely revolutionize the art world?
Interview with Michael Bouhanna, Director of Digital Art and NFT at Sotheby’s
Sotheby’s is one of the world’s oldest auction houses. The company has made a name for itself several times in the cryptocurrency ecosystem in recent years, whether with its own non-fungible token marketplace (NFT) or the sale of Three Arrows Capital’s (3AC) Grails collection.
To find out more about this famous house’s Web3 activities, we spoke to Michael Bouhanna, Director of Digital Art and NFT at Sotheby’s. In his job, our guest is in charge of his department’s long-term strategy, as well as “curation”, i.e. the whole process of sourcing and selecting works to be sold at auction.
Can you tell us more about your background and what led you to mix art and Web3?
“I started at Sotheby’s 8 years ago as a specialist in contemporary art, and worked for 6 years in London as a sale manager. I’ve always been interested in new technologies and young artists, and at the end of 2020 I started looking at what was happening in NFT, crypto-art and digital art. I saw some very interesting artists using this new vehicle and launched the first NFT sales at Sotheby’s in early 2021. “
Meanwhile, our guest also returned to Sotheby’s Web3 shift:
“When we launched our first sale dedicated exclusively to digital art in 2021, it worked very well and we committed to developing a significant presence in the Web3 community. The same year we launched Sotheby’s Metaverse, which is the platform dedicated to NFT. This allows us to develop more features, including the latest one we announced with the integration of Art Block Engine, enabling us to conduct generative art sales completely on-chain. “
NFTs as a new vehicle for digital art
Do you see NFTs as contributing to a greater democratization of digital art?
“There has always been a lack of education about how these digital works are created with new technologies. NFTs have enabled a whole generation of younger digital art collectors to emerge. At Sotheby’s, these are typically 10 years younger than our average buyer, and they have less trouble than traditional customers in getting interested in a work that doesn’t come with a physical medium. “
While digital art and NFT can sometimes be confused, Michael Bouhanna reminds us that the latter is only one facet of the former. Indeed, digital art originated long before the emergence of blockchain:
“Digital art has been around for decades, we see with the sale of Vera Molnár who started using the computer in 1968 when at the time no artist had access to computers to create algorithms to create visual art. But for her and even later with other artists in the 80’s and 90’s, they were going to the paper form to get into the traditional art circuit. “
Speaking of Vera Molnár, the 99-year-old artist is still creating, and will be honored on July 26 at Sotheby’s with the generative art collection Themes and Variations, comprising 500 non-fungible tokens:
Are you seeing an increase in traditional buyers turning to NFT?
“There are many examples of important traditional collectors who are curious, interested in a new aesthetic and who see NFTs as a new way of collecting. It’s also something very generational, reaching a younger-than-average collector base as I said. In my experience, every sale is also an opportunity to educate people about the art behind it, because the word “NFT” has been polluted by speculation when in reality it’s about digital artists using this means of distribution in the same way they might use any other circuit. “
In fact, several artists were already recognized in their art before turning to NFTs, as our guest points out:
“The creative process is very interesting, and sometimes these are artists who already have a very big career, especially with exhibitions in institutions. So it’s really a question of education to put digital art back into the context of art history. “
A look back at the value proposition of Sotheby’s NFT marketplace
Last May, Sotheby’s Metaverse launched its own NFT marketplace, so we asked Michael Bouhanna how the platform stacked up against competitors like OpenSea:
“I think we have a completely different approach in the sense that we select the artists who can be presented on the platform. So collectors can’t list works that don’t belong to the 13 selected artists. We can then be sure that customers who enter the platform are advised to buy works by those we think are the right artists, and we’ll continue to explore and gradually add more while remaining hyper-selective. “
Quality is then preferred to quantity, and each exhibited artist benefits from a more detailed presentation than would be the case on other marketplaces :
“On the other hand, every sale and every event is an opportunity to educate, so we’re very focused on content, the artist’s biography, the technical process. In fact, the collector browsing the marketplace needs to know the work well before buying, and that’s what we’re trying to enable through the experience we offer on our platform. “
The case of Grails: 3AC’s NFT collection
Beyond its own Web3 experiments, Sotheby’s is in charge of selling the important Grails collection of investment fund Three Arrows Capital, which went bankrupt last year in the wake of the Terra (LUNA) affair. This series of auctions, spread out over several dates, raised handsome sums, such as the work Ringers 879, nicknamed “The Goose” by artist Dmitri Cherniak, which sold for $6.2 million.
How did Sotheby’s come to manage the sale of 3AC’s NFT Grails collection?
“We are the leading auction house, both in the traditional market and in digital art, and we specialize in organizing very large sales, both in terms of quality and volume. We were able to propose a strategy that satisfied the liquidator, i.e. to offer sales through different channels such as auctions or private sales, and on a global basis using platforms in New York, Hong Kong and Europe. “
It’s true, this sale seems to be going rather well, even though the NFT market isn’t in very good shape at the moment, how do you explain that?
“It depends on the angle from which we look at the market, it’s not in very good shape if we compare this to 2021, which I don’t think should be a benchmark. On the other hand, we see that it’s an emerging market that’s very young with a new technology and ecosystem forming at the same time, and we see collectors being more and more selective. The market is perhaps becoming a little tighter, it’s getting healthier, there’s a lot less speculation, it’s becoming harder to make a profit very quickly in NFT, which is good because it brings collectors in for the right reasons. It encourages them to take an interest in art, to look for solutions to display it at home and the relationship with the work. “
Can blockchain threaten intermediaries like Sotheby’s?
Often, blockchain is described as a technology for cutting out intermediaries. These intermediaries are particularly present in the art sector, whether through the various experts, auction houses or auctioneers, for example. So we asked Michael Bouhanna how the company was approaching this paradigm shift:
“I believe that when it comes to aesthetics in art history, it’s important to have specialists as intermediaries to guide those who don’t necessarily have the time to make it their business to know what to buy. This is what we do, and it makes sense to pay for this service. We focus on the top end of the market, with works that need a lot of effort. It becomes very similar to the way we would sell a traditional work, for example by calling every collector who would potentially be a candidate to bid. “
However, for works sold directly on Sotheby’s NFT marketplace, the various processes are largely automated, which is why our guest explains that in this case, fees remain relatively similar to competing platforms.
To conclude with a bonus question, what advice would you give to someone wishing to start a collection in art, both on the traditional market and with Web3 technologies?
“The advice I was given when I was starting out was to get an eyeful. That is, by looking at thousands or even tens of thousands of works by image or in real life, in order to start having an opinion on the aesthetics, and then start collecting what you like. We’re made to recognize quality by the training we’ve given the eye.”
