Daniel Grant: Does Price-Cutting Really Help Sell Art?

“In the past” – by which he means seven or eight months ago – “we might have offered a standard 10 percent deduction to certain long-term collectors or to people who purchased more than one work at a time,” said Eric Brown, director of New York’s Tibor de Nagy gallery. Nowadays, the standard has risen to 20 percent, “and, in some circumstances, we have gone to 25-30 percent.”
The Tibor de Nagy gallery is not unique. The current worldwide economic slump has reduced demand for works of art, as well as the prices collectors are willing to pay for them. “When the market speaks, one should listen to it,” said Paul Gray, director of Chicago’s Richard Gray gallery, noting that he has “contacted all our artists about readjusting their prices. They get it, to a certain degree, but they don’t have the conversations I have with clients.” Those conversations, he claimed, increasingly are about what the stated price is and what the buyers believe they should have to pay. One dealer after another reports hard bargaining in what traditionally has been a handshake industry.
Technically, most art dealers are not lowering their prices (“that’s bargain-basement mentality,” Manhattan art dealer June Kelly said); rather, they are increasing their level of discounts. (“If someone rally wants a piece is ready to write a check,” Kelly stated, “I’ll try to satisfy them by taking a little extra off.”) A number of galleries have long been willing to drop prices 10 or 15 percent when a collector purchases more than one item at a time, and San Francisco’s ArtZone 461 Gallery, which started to accept credit cards within the past year, recently began offering an additional five percent discount for those paying in cash. Even so, some gallery owners speak openly of cutting prices. Rolland Augustine, co-owner of New York’s Luhring Augustine gallery and the president of the Art Dealers Association of America, said that “I’ve told my colleagues that lowering prices is a perfectly acceptable thing to do. Look, I have 18 people here working for me and 15 artists that the gallery represents, so I need to perpetuate cash flow for all of them to get paid.”
In whatever form it takes, dropping the actual price a buyer pays has the potential of raising tensions between dealers and collectors and between dealers and the artists who have consigned their work to the gallery. Augustine claimed that his 15 artists are “extremely flexible” with regard to prices, while Gray stated that “different artists respond differently.” Some artists that the Richard Gray gallery represents are resistant to lowering their prices and prefer to hold onto their work, awaiting an economic recovery, while others more eager to make price adjustments in order to generate sales. Robert Fishko, director of New York’s Forum Gallery, said that a number of his “artists have contacted me to ask what they can do to support the gallery,” reflecting a willingness to take less than they might have a year earlier.
Not all artists are so willing. Trevor Winkfield, a painter in New York, strongly opposes increasing discounts, because artists start out with 50 percent off as a result of the gallery commission. “If you have a $10,000 painting, even in the best of times the dealer gets half, so the artist only receives $5,000,” he said. “If you increase the discount, the artist may only wind up with $3,000 for a $10,000 painting.”
The responses of collectors run a gamut of emotions. Long-time buyers who purchased a work by an artist last year at one price, only to learn that a similar piece by the same artist was sold for considerably less this year, may become upset and distrustful. Fishko described such thinking as “unreasonable,” noting that “no two people pay the same price on an airplane.” In an economic downturn, it is common for home sellers to drop their asking prices and for automobile dealerships to offer rebates and other incentives. Why should it be any different for collectors of art? “Buying art is an individual decision made at a specific time,” he said. “No one forced you to pay the higher price.”
There is no unanimity of opinion on that, however. A substantial price reduction is “a disservice to your clients,” June Kelly said, and Louis Newman, director of New York’s David Findlay Jr. gallery, claimed that maintaining the regular price structure “serves our core group of clients and gives them a sense of confidence” – confidence that the gallery isn’t giving other people better deals.
However, Paul Gray noted that it is “not reasonable for a collector to whine” about other buyers obtaining lower prices. The art market, like all markets, goes up and down. “Some collectors are disappointed that they bought at the height of the market, but it is not reasonable to assume that prices only go up,” he said, adding that most of his gallery’s clients have a “mature understanding” of the vicissitudes of the art market.
It is not at all clear that lowering prices increases demand. Economists refer to this in terms of the “elasticity of demand” – demand shrinks or expands with higher or lower prices – but “demand for art is probably not elastic,” according to John Silvia, chief economist for Wachovia. He noted that lowering the price for less expensive consumer items “brings people into the store, but if you have a product that is fairly unique or distinct, like art or jewelry, the answer is no, you don’t lower the price.” In a prestige realm such as art, cutting prices – “a painting that last week was selling for $40,000 is now for sale for $30,000,” he speculated – could have an adverse effect. Art gallery owners who do slash prices risk “alienating two customers: You alienate anyone who bought from you in the past and now thinks he was cheated, and you create a doubt in the minds of future buyers about any work of art you sell. They wonder, Am I being cheated now.”
Lowering the admissions fee at New York’s Sports Museum of America, from $27 to $16 to $10 didn’t help that institution, which closed earlier this year after a run of only eight months and poor visitorship. Enhanced rebates for would-be car buyers and falling home prices have not led to more sales but only underscore how unwilling so many consumers are to make purchases. In fact, the lowered prices may make potential buyers reluctant to act, assuming that prices will decline even further. Cutting the price of works of art similarly may convince collectors that they should wait for a bottoming-out. “Price is a signal of quality and your commitment that this is good art,” said Gerald Friedman, an economics professor at the University of Massachusetts. “If you cut the price, it sends a signal that this is not a desirable product. If you are an investor, cutting the price is a sign that no one is going to buy it in the future.” If someone wants to buy work by a particular artist, he stated, they will pay the going rate, rather than switch to other artists.
Remaining is the question of whether or not, after the current economic downturn has passed, galleries will be able to return to the standard 10 percent discount and a more predictable sense of pricing. “Demand will return, and that should help close the floodgates,” Eric Brown said. “It certainly will take discipline, but I don’t really know how it will play out.”

Article source: http://www.huffingtonpost.com/daniel-grant/does-price-cutting-really_b_477888.html

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Prison Cell Phones Target Of Congress Crackdown

Last Updated on Wednesday, 21 July 2010 08:54 Written by Daisy Harley Wednesday, 21 July 2010 08:54

WASHINGTON — Congress moved Tuesday to make it tougher for federal prison inmates to use cell phones and wireless devices to direct criminal activities within or outside prison walls.

The House voted by voice to close a loophole in federal law by banning the use or possession of cell phones or wireless devices in federal prisons and classifying those devices as contraband.

Currently, cell phones and wireless devices are not specifically defined as contraband, and inmates and guards caught smuggling the devices into prisons are rarely punished.

The Senate has passed a similar bill.

Sen. Dianne Feinstein, D-Calif., sponsor of the Senate measure, cited a recent report from her state that found that inmates pay from $500 to $1,000 for a phone and that one corrupt correctional officer made some $150,000 in one year by smuggling cell phones to inmates.

She said prisoners have been found to use the cells to conduct criminal business outside the prison, including ordering gang hits, running drug operations and conducting credit card fraud.

The legislation would subject anyone trying to provide a cell phone to an inmate to up to a year in prison.

Rep. Bobby Scott, D-Va., said one reason that prisoners try to obtain cell phones is that they are required to call collect, at considerably more cost, when they make legitimate calls to their families. The bill requires the compiling of a study looking at the costs of providing prisoners with telephone service.


Source: http://www.huffingtonpost.com/2010/07/21/prison-cell-phones-target_n_653925.html

Pod Cribs: The Perfect Combo of Danger and Ugliness – Crib pods

Last Updated on Thursday, 15 April 2010 05:28 Written by Daisy Harley Thursday, 15 April 2010 05:28

Pod Cribs: The Perfect Combo of Danger and UglinessHoo boy! This design for “Pod Cribs” is as bad as it gets. Not only does it looks like something out of some sort of tube-baby-growing dystopia, but it’s almost designed to make sure babies fall out of it.

I mean, really. You design a crib that’s open on one side? Do you know how babies work? And how often do people need an interconnected crib system that can hold eight babies outside of a maternity ward? Also, they are stupid looking. Back to the drawing board with you, Pod Cribs. [Yanko Design]

Article source: http://gizmodo.com/5518156/pod-cribs-the-perfect-combo-of-danger-and-ugliness

What’s With All the Android Phones? And How to Pick Just One – Android phones

Last Updated on Thursday, 15 April 2010 04:58 Written by Daisy Harley Thursday, 15 April 2010 04:58

What's With All the Android Phones? And How to Pick Just OneIt’s a near-weekly occurrence: HTC, or Motorola, or someone releases a brand-new Android phone. There are a ton of them! But really, there are only a few worth buying. Here are the best Android phones on each carrier.

Choosing an Android phone is just like choosing any other cellphone, except easier: You’re already onboard with the Android operating system, you’re prepared to shell out for a data plan, and probably have a more specific idea of what you want in a phone than your average buyer. Accordingly, similar rules apply:

• Don’t buy something that’s going to be obsolete before you’re halfway through your contract.
• Generally, ignore the upfront price—the total tally for your cellphone contract is going to make your smartphone’s $200 seem like spare change.
• Look forward. Google updates their Android software at a breakneck pace. This is awesome if your phone is ready for the upgrades, and demoralizing if it isn’t—and a lot of current handsets are getting left behind. This has serious implications in terms of app compatibility—do you really want to buy a phone that can’t even run Google’s Navigation software?

So! The calculus is simple: Buy the Android phone that is objectively one of the best, or you’ll probably regret it. Here are your choices:

T-Mobile

T-Mobile is the grandfather of all things Android. They had the first phone! And the second. (Also, did you know they’re still selling the G1, right now? Nuts.) It’s weird, then, that their Android line has thinned down into an anemic, uninspiring mishmash of oldish hardware and Android’s few legitimate pariahs. Luckily, they’ve got a savior outside of their official lineup: The Nexus One.
What's With All the Android Phones? And How to Pick Just One
It’s the best Android phone that you can buy today, and that’s saying a lot: It’s got a 1GHz Snapdragon processor, and beautiful AMOLED screen, Android 2.1 and a bright future for software upgrades, since, after all, it’s the Google Phone. It retails for $180 with contract or $530 without, at Google.

What's With All the Android Phones? And How to Pick Just OneIf you need a keyboard, go with the Motorola Cliq, at $150. It’s far from futureproof, though, with and older generation of hardware and a certain delay for software upgrades, since Motorola needs to update their Motoblur software shell for any new OS releases. Stick with the Nexus One if you can.

Sprint

Sprint rode the crest of the second Android wave, landing the America version of the well-reviewed HTC Hero. Then, like T-Mobile, their lineup started to look less and less competitive, as phones like the Droid came to market. Now, they’re back out in front with the HTC Evo, the first 4G handset in the US, and by far the most impressive Android phone available.
What's With All the Android Phones? And How to Pick Just One
It’s got a 4.3-inch screen, HTC’s generally helpful Sense Android interface, an 8MP camera, and what the hell, a kickstand. 4G’s only a selling point if you live within Sprint’s limited WiMax coverage area, but if you do, you can use the Evo’s hotspot feature to share the connection with a handful of other devices over Wi-Fi. And even without 4G, it’s still king of the hill. Minor catch: It’s not out yet. It’s expected in June, when it’ll probably cost $200—though it could conceivably be higher.

What's With All the Android Phones? And How to Pick Just OneIf you need a keyboard, you’re nearly out of luck on Sprint. You could go with the Samsung Moment, but really, you shouldn’t. Nut up and deal with the soft keyboard—on a 4.3-inch screen, it’s really not that big of a deal.

AT&T

What's With All the Android Phones? And How to Pick Just OneAT&T got into the Android game late, and they started with a spread of mid-level phones, like the Backflip, and soon, the Dell Aero. But as with T-Mobile, your best option lies outside of AT&T: The AT&T-compatible Nexus One. But there’s a much larger catch this time around: It’s $530. There is no on-contract option, so your phone won’t be subsidized. On the plus side, you won’t be stuck in any kind of contract at all if you’re already an AT&T customer, but still, steep.

What's With All the Android Phones? And How to Pick Just OneSo here, your second choice, the Backflip, may seem a bit more compelling. Not only does it have a keyboard, but it’ll only run you $100, and it’s due for the 2.1 update sooner rather than later. But again, consider what you’re getting yourself into. Two years with a phone you don’t really want isn’t worth saving a few hundred dollars, and signing a new blood contract with your carrier—you can always resell the Nexus One!

Verizon

Verizon took Android mainstream with the Droid, which, up until the Nexus One came out, was the best Android piece you could buy. Today, they’ve done themselves one better with the HTC Droid Incredible, which matches or beats the Nexus One (which, by the way, both Sprint and Verizon are due to get sometime soon) in almost every respect.
What's With All the Android Phones? And How to Pick Just OneIt’s got a 480×800 AMOLED screen, a Snapdragon processor (like the Nexus One) and an 8MP camera, to start. It’s due on April 29th.

What's With All the Android Phones? And How to Pick Just OneIf you want a keyboard, though, the original Droid is still a reasonable choice. Obsolescence isn’t something you have to worry about in the near-term, and it’s generally been quick to receive major software updates. It can be had for significantly under its $200 retail price, too.

Article source: http://gizmodo.com/5518214/whats-with-all-the-android-phones-and-how-to-pick-just-one

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