Into Christie's digital future
Auction house CEO draws on old-line business experience to keep pace with new markets and modernise the 246-year-old British firm
Steven Murphy, the first American appointed as chief executive of Christie's International, hails from two old-line businesses: book publishing and music, both of which have faltered as the globe has gone digital.
Now, as the top boss at Christie's, Murphy is keen to get the legendary auction house, which first opened its doors in London in 1766, onto a fast track for growth in the online as well as the offline world.
"Everyone lives in the online and real world together at the same time now. That's the way our clients live their lives," Murphy said.
"Today the main difference between generations is the way our clients like to communicate with Christie's.
"We have maintained our traditional means serving our clients with catalogues and one-on-one meetings and we have also added a lot electronic means to the mix," he said during his trip to the firm's autumn auction in Hong Kong.
"If the client is younger, he may prefer bidding online or communicating online or just watching the auction on his iPad."
When Murphy was appointed CEO about two years ago, it made quite a buzz in the art world, not only because he was the first American to lead a long-established British firm but also because his career background had nothing to do with the auction world.
After graduating from university, he became a book editor and went on to be a senior executive at a record label.
Murphy, who calls himself an "accidental CEO", said his experience in book publishing and music taught him how to keep up with fast-changing consumer behaviour, and stood him in good stead as he applied what he learned to Christie's growth strategy.
"In publishing, I think the great magazines have learned what they should do is to expand from the print to online," he said.
"When they go online, they should not just put magazines online.
"They should do things that print can't.
"They should make the best use of online for unique purposes."
To attract more clients from China, already the world's second-largest economy after the United States, this year Christie's became the first auction house to provide Chinese-language online auctions through its so-called Christie's Live platform, in which it invested heavily.
According to Murphy, that investment is paying off. In the five online-only auctions so far this year, including ones for wine and a James Bond collection, 45 per cent of buyers were first-timers who became clients of Christie's because they could have an online connection with the firm. Among the people who registered as potential bidders, 72 per cent were new to Christie's.
The August auction of fine and rare wines brought in US$819,715, selling 88 per cent by lot, including the top lot of a dozen bottles of 1982 Château Lafite Rothschild, which sold for US$42,350 to an Asian private collector.
The October sale of James Bond memorabilia, including first-edition books, tripled pre-sale estimates, with bids from 42 countries, pushing the total to US$1.4 million.
Christie's plans to add more online-only sales to its calendar next year, and is exploring more collecting categories, including watches and prints.
The art business has grown rapidly in recent years in Asia, in particular in China as mainlanders have become richer and look for assets whose value will hopefully outpace inflation.
So far this year, there has been a more-than 30 per cent increase in the number of Asian clients registering to bid at Christie's auctions in New York and London, according to the British auction house.
Some industry watchers are growing concerned that there are bubbles in the art market.
But Murphy said: "These things [price bubbles] always come and go. Masterpieces will always reach record prices.
"When the demand is really strong, everything reaches the record price, and I think the demand in China and Asia is in a good place."
Regarding spikes in prices for certain artworks, Murphy said: "There is a lot of question and observation on price increases, in general, in New York as well as worldwide. One of the things that is driving this without question is simply the basic economics", where demand is rising because more people are registering to bid and putting in offers.
Naturally, he argues, "the opportunity of [higher] prices will rise", adding that most clients he meets are serious collectors rather than "art speculators" who buy art purely for investment.