Article: Photography as an Art Investment

Five works by Indian artists were auctioned at Christies recent Contemporary Indian Art Sale, at estimates ranging from Rs. 4 Lakhs to Rs. 6.4 Lakhs, while a work by an Indian artist is listed on the Artnet catalogue for a reserve price of Rs. 12.7 lakhs. Those figures may not sound like much, given the astronomical prices commanded by Indian paintings and sculpture in recent auctions, but they take on a new meaning when you know that each of the artworks in question is a photograph, that too by a contemporary Indian photographer. The photographers who featured at the Christies sale included Anita Dube, Vivan Sundaram, Ravi Agarwal and Rameshwar Broota, merely a whisper of the many photographic talents from India beginning to make waves in the art buyer community. Clearly, the message is that photography as an art investment is coming of age: While prices commanded by photographers in Indian art sales may not have reached similar levels yet, Christies and Sotheby’s have always been bellwethers of the art community and global trends. Interestingly, while a vintage print of Ansel Adams’ famous Moonrise photograph sold for $1200 in 1975, by 2005 the price had risen to $25,000, and may well sell for $100,000 (around Rs. 40 Lakhs) today. American and European art collectors have accepted photography as a medium that stands tall next to painting and sculpture over the last decade or so, with photographs accounting for as much as 7% of art auction sales in 2007. One of the key reasons for an increasing uptake of art photography is the pricing of individual works, typically between a tenth and a hundredth of the cost of a painting of similar merit. Value appreciation of photographs too spans a wide range, from nil over a three year valuation window, to tenfold or more for the same period – again similar to the more traditional painting and sculpture forms. One investment parallel that can be drawn is to the world of stock markets, with stocks of high trading price engaging smaller numbers of investors, thus resulting in higher volatility and risk, compared to penny stocks inviting larger investor volume due to a lower threshold of entry, and consequently ensuring lower volatility hence safer investment. Photography is evidently the penny stock segment of the art investment market. As an indicator of trends closer home, gallery exhibitions of contemporary photography in Mumbai, in early 2007, boasted typical prices from Rs. 5000 to Rs. 50,000 per 2’x3’ print, for limited editions (usually of 10 to 20 prints per image), and sold perhaps 2 to 5 images in a week-long exhibition. In comparison, by mid-2008 the galleries are seeing prices from Rs. 10,000 to Rs. 2 Lakhs each, yet seeing sales of 10 to 20 images over a week. A patron who entered this investment area in early 2007 mentions that he has seen some of the images he bought back then, appreciating to over thrice their value in just 18 months. So what images work in a gallery exhibition or auction? Foremost, of  course, is the perceived value of the artist: Even mundane works by a celebrated photographer will command high prices. Beyond that point, images which are compositionally akin to traditional paintings appear to work the best. Also, moody photographs that evoke contemplation, awe, sorrow and introspection sell at better prices than cheerful and joyous photos, calendar type images, flowers and landscapes – unless the artist is an Ansel Adams! Pure abstract photographs do not necessarily sell well, because the uniqueness of the photographic medium, the ability to capture detail and provide context, gets lost in the result, thus bringing the photograph up against abstract paintings in valuation, rarely to its advantage. Unusual subjects (such as a rusty old door, shorn of all context), unusual views of familiar subjects (such as a highly perspective-distorted wide-angle photo of a familiar landmark), and unusual treatments (such as day-bright or colour-enhanced images of subjects shot at night) evoke a strong investor or art collector response. On the other hand, the casual visitor or first-time buyer usually reacts best to the familiar and the “pretty”, passing over the moody and the disturbing. From recent experience, the art photography market is divided into two, or perhaps three, segments:
  1. The mature investor, who evaluates the brand-value of the artist as much as the long-term visual and value impact of a prospective purchase – often seeing the current undervaluation of photography as an art investment opportunity in comparison to the traditional arts value bubble. The abstract, semi-abstract, the minimalist and the very moody images sell best to this audience.
  2. The newcomer to art buying, for whom the lower entry threshold of photography purchase allows a lower risk entry into art speculation than other arts. Typically, this buyer would be more sensitive to whether the prospective art work would retain visual and discussion value over the years, while hanging on the drawing room wall, or whether it would pall rapidly like calendar photographs do. The semi-abstract, the unusual, and the detail-rich photographs sell best to the newcomer.
  3. The impulse buyer, who walks into a gallery or exhibition, gets extremely enamoured of a particular image, and makes a purchase, often without regard to the pricing altogether. The colourful and the minimalistic photos are the images for this segment. Interestingly, the seasoned art critic or art aficionado also almost invariably prefers the same type of images, and buys in the same way, from the heart rather than from the mind.
In closing, some observations from a recent exhibition at the Center for Promotion of Photography as an Art Form, Piramal Gallery, in Mumbai: Gallery staff members were surprised at what they felt were much higher prices at the exhibition compared to the many prior photography exhibitions held at that venue. The denouement came at the end of the exhibition, when the same staff members admitted to being astounded at the number of high-value sales which happened at the exhibition – ergo, the art photography market has taken a leap, now is the time to get on board.  

Limited Edition Prints

The term “Limited Edition” indicates a fixed number of prints (edition size) of a specific photograph, printed to a specific description (edition description), backed by a written commitment by the artist to not print / sell or permit printing or selling of any more than that stated number of that print, ever. An edition typically also carries a guarantee that the printing was done under the artist’s supervision, and thus is of a quality, colour and detail rendition as expected by the artist. A typical edition description: “Limited edition of 10 serially numbered prints, of size 2’ x 3’, of  the image titled “Floating on Light”, of which the artist offers six prints for sale and retains the remaining four as Artist’s Proofs” Editions with highest investment value are typically of 10 to 20 prints at most, of which the artist would retain 2 or more as “Artist’s Proof” copies, as their own assets and for exhibiting. The serial number within the Edition has investment significance too, with the earliest prints typically commanding the greatest value appreciation. Also, pricing for an image typically ladders up with increasing serial numbers: If the first and second prints sell for Rs. 50,000 each, the next two are likely to be offered for Rs. 60,000 each and so on, with the Artist’s Proofs not being offered for sale at all. Correspondingly, as the remaining number of prints in an edition reduces, the early buyers can command a higher price at resale, though only if the artist’s recognition has gone up in the meanwhile – or, as with most other art, after the artist passes away!

Securing your Investment

Checklist of items to look for, in securing your art photography investment:
  • An undamaged print, in pristine condition, ideally printed on archival quality media (photo art paper, cotton canvas, silk et cetera, but not chemically treated ultra-white canvas), mounted on acid-free board or unmounted, and framed with ease of re-framing in mind.
  • Certificate of Authenticity signed by the Artist, specifying and guaranteeing the edition size with an edition description, and the serial number of your print within the edition.
  • Optionally, the print or mounting matte signed in pencil by the artist with the serial number (e.g. “Print 2 of 10”)
  • Signed declaration by the artist of holding the copyright of the image, lack of encumbrances or liens, and rights of exhibition and sale
  • Copies of any required Model Release / Property Release, for images containing a recognizable model or identifiable restricted properties. Such releases are not required for images taken in public spaces and of individuals in public spaces.
  This article written by Anindo Ghosh, originally appeared in The Financial Chronicle, India, on 26th June 2008, titled "Art of the Matter".