Picassos and Pez Dispensers? Sotheby's and eBay Team Up (Again)
Twelve years after a short-lived online auction joint venture that was arguably too far ahead of its time, Sotheby's and eBay are making a second go of it, announcing a new partnership this morning. The plan is to make make the 270-year-old auction house's offerings available to eBay's 145 million active buyers in 90 countries. The two companies "will unite the global leader in online shopping with the iconic international art business and auctioneer." Their strategy involves developing an online platform that they say will make it easier for millions of people around the world to "discover, browse and acquire exceptional works of art, antiques and collectibles."
The announcement comes just two months after activist shareholder Dan Loeb joined Sotheby's board after a bruising, nearly year-long proxy fight that saw the two sides trading barbs amid "poison-pill" shareholder activity and lawsuits, in addition to other combative tactics. At one point, Loeb said Sotheby's was “like an old master painting in desperate need of restoration." And, while this venture certainly marks a step forward for Sotheby's (its shares were trading slightly higher this morning at $40), it will still have some catching up to do with rival Christie's, which has been a successful innovator in the online auction realm. Christie's held its first online-only auction in December 2011 as part of the auction of Elizabeth Taylor's collection. It has gone on to hold them on an almost-daily basis.
eBay and Sotheby's expect mobile activity to play a significant role in the new venture. "As technology evolves and mobile commerce becomes ubiquitous, collectors are increasingly purchasing high-end items online and even on-the-go from their mobile devices," according to a release. Both companies will focus on growing the market at price points where they expect their collectors to converge in the future, particularly in segments such as jewelry, watches, prints, wine, photographs, and 20th century design.
"Our shared strengths make this the right time for this exciting new online opportunity."
Noting that the global art market is currently estimated at $65 billion, the release cites projections that online art sales could reach $13 billion by 2020. " We believe this is a great opportunity, through this partnership, to truly make art more accessible to exponentially more collectors," said Bruno Vinciguerra, Sotheby's COO. "The growth of the art market, new generation technology, and our shared strengths make this the right time for this exciting new online opportunity."
eBay and Sotheby's will kick off the venture by offering a number of live auctions that are taking place at Sotheby's New York headquarters on the Upper East Side. eBay will launch a newly-designed experience on its site, "tailored for collectors of rare, unique, and premium art and collectibles as well as first time buyers. " (So… tailored for everyone?) Sotheby's will be the preeminent anchor tenant in the revamped marketplace, which will include a new live auction feature and real-time bidding from anywhere in the world.
The auctions will present 18 collecting categories and will explore themed and time-based sales, as well as live auctions from Sotheby's other salerooms around the world. One sign that the house is exercising some caution in preserving the integrity of its prestigious brand: Evening sales will not be included in the venture, according to the release.
Sotheby's and eBay also trotted out some interesting data about how the two businesses will complement one another. Each day on eBay, more than 3,500 auctions close with a price over $5,000; meanwhile, in 2013, more than half of Sotheby's lots were sold within the $5,000–100,000 range.
Sotheby's said online bidders competed for 17 percent of total lots offered in 2013 and noted the $3.5 million record online price paid for John James Audubon's elephant folio, The Birds of America, which it sold this past April. The auctioneer said the number of lots purchased online in 2013 rose 36 percent compared with 2012, and that the number of visitors to sothebys.com on mobile devices (tablets and smartphones) had doubled in 2013.
eBay reports that it "enabled $20 billion in mobile commerce in 2013," up from zero in 2008.