Monday, February 23, 2015

[UPDATED} - Peter Lik - Master Marketer and Successful Entrepreneur

Peter Lik's "Ghost", which is the color version of his one-off "Phantom." ©Peter Lik

Say what you will about photographer Peter Lik, but you don't have 15 art galleries and a Chief Financial Officer and then belong anywhere but in the category of "successful businessman." An interesting article in the New York Times about Lik - Peter Lik’s Recipe for Success: Sell Prints. Print Money. somehow gave fodder for Artnet News to opine "New York Times Exposes Peter Lik Photography Fraud". Now, where do they get "fraud" in the NYT article? Questions? Sure. Fraud? That remains to be seen.

let's have a look at the math - actually, let's let the NYT to it for us:

"When 95 percent of an image has sold it becomes “Premium Peter Lik” and the price jumps to $17,500. At 98 percent, it’s “Second Level Premium Peter Lik” and leaps to $35,000. And when the image gets down to its last handful, the prices can go as high as $200,000 or more. When all copies of a photograph are sold, it can gross the company more than $7 million.

So, if someone wanted to by an entire edition of one of Lik's photographs, it would cost them "more than $7 million" and they'd have 995 prints in a stack. So, when someone pays "only" $6.5 million, they have one print and don't have to deal with 994 other prints, and they are saving at least $500,000. AND, they then have a one-of-a-kind piece to boot."

There are all sorts of quotes and colloquialisms "art is what you make of it", and "one person's junk is another person's treasure", and as Andy Warhol once said "Making money is art and working is art and good business is the best art." Oh, and you could quote P.T. Barnum's circus competitor, who, in cricism of Barnum, said, "there's a sucker born every minute."

Again, the NYT notes, on the resale value of Lik's work (or the work of ANY other artist, photographic or not, for that matter):

"It’s a truism that the price of a commodity doesn’t always correlate to its value. This is especially so in the art market, where experts say a stunningly small percent of what is sold will ever be worth more than it was on the day it was acquired."

"A stunningly small percent...will ever be worth more than on the say it was acquired." Yet others are being critical as if this is only the case with Lik. Artnet News, seeminingly critically, writes:

"With photos sold in limited editions of 995, Lik is able to create artificial demand by driving up the prices as he sells more copies."

How, exactly, is that any different than any other artist with editions? Ansel Adams? Picasso? Norman Rockwell? Thomas Kinkade? Every artist sets their edition sizes, creating an artificially limited supply. This is standard in the art world, yet they roll it out a criticism of Lik?

(Continued after the Jump)

Don't get me wrong - when Lik is quoted by the NYT as saying “I’m the world’s most famous photographer, most sought-after photographer, most awarded photographer,”, or “If you’re in Caesars Palace, you’re no joke,...That was a huge turning point. I’m in Caesars. I’m God. Nailed it.”, I think he's gone too far. "Most famous?" Well, depends on how you define "famous" - he's sold more signed prints than anyone else it seems. This argument also works for "most sought-after" too. Yet, he's using over-the-top marketing speak. When someone writes about Diamonds "She already knows you love her, now everyone else will too", or BMW's "The Ultimate Driving Machine" or Mercedes' "you deserve the very best" slogans - no one faults them.

Lik is making money, and lots of money at that. He's creating a demand for prints with an escalation of print prices as the edition sells out. He's no different than another self-taught photographer Rodney Lough Jr, who's creating an escalation of pricing with increased "appreciation levels" as editions sell out. In 1996 While Lik was selling postcards in Australia, Lough started his company in Oregon also selling landscape photography in limited editions as art, leaving his corporate life behind - both Lik and Lough are currently 55 years old. I suspect it's possible that Lik learned about these escalating prices and editions and scarcity from Lough. Lough will also "pre-sell" an edition, even before it's shot - sight unseen. So, you're buying a piece of Lough's future "vision", not even knowing what it looks like.

The photographic world of "art" is evolving rapidly, and also trying to evolve into an existing "art world" with trend-setters and taste-makers somehow telling people what's "in" and what's "out." Lik rejects that. How many "it" artists find themselves broke and penniless after the art world turns on them or they suddenly are no longer the "it" sensation?

In the NYT article, they note "The message is that the sooner you buy, the less you will pay. So buy now. 'If we had them at $3,950 the whole time, where is the sense of urgency?'" Indeed. Is it factually inaccurate to say "“This photograph started at $4,000 and it sold out at $200,000"? No, it's not. Someone bought an early edition of a print at $4k, and others later paid $17,500, and $35,000, and yes, eventually, it sold for $200k before no longer being sold. Fraud would exist if Lik later re-printed the image and started anew. Is art a good investment, photographically or otherwise? Generally speaking, no, it's not. People say, of art, "if you like the art, if it speaks to you, buy it because you like it." I agree. It is smart business to be very up front and say "it's $4k now, and in 8 months, it'll be $20k - the price goes up the scarcer it gets." Sure, people may be trying to re-sell a print and be having a hard time - right now. Others, like the Chicago real estate developer has 50 or so Peter Lik prints, and he's happy. The people he shows the photos to are "delighted."

The article notes "that the vast majority of Mr. Lik’s buyers are not well versed in the secondary art market" and it may be that conveniently located galleries in tourist destinations where there is high traffic and disposable income means that higher-net-worth people have $4k to drop on a photo, but when people are spending $35k and $200k in a photograph, these people are not idiots - they have huge piles of disposable income and want what they want and can afford to choose to buy these things. Who are we to say they shouldn't, any more than we should tell everyone to buy a Toyota or a Chevy as transportation because a Bentley or a Maclaren is just wasting your money? His galleries are smartly located and his sales teams well trained, and the NYT article notes that they risk their jobs if they start talking about Lik's works as an "investment." The Wall Street Journal in an article here notes that the art-as-investment industry is nascent at best, with little evidence a mid-teens return can be even be achieved yet. So why are people so focused on a "secondary art market"?

In another NYT article, the title of which inspired a part of the title of this article, about Ansel Adams, "Ansel Adams: Master Photographer,Master Marketer":

"Mr. Adams had printed his work in open editions up until then and sold the work for very little money. With the landmark decision to cease printing, they created a limited supply...Adams was by then in his 70s and had grown weary of the difficult darkroom toil."

I'm not suggesting here that Lik is Adams, and Lik certainly is quoted as having taken a swipe at Adams in the NYT article, but the concept remains - scarcity is the key to an increased valuation. With Adams gone, his print prices have increased. I'm guessing that will be the case once Lik is gone, but that seems like it'll be many decades from now.

In the meantime, those who have Lik pieces will enjoy their beauty, and no one has criticized Lik as having less than beautiful work, they've just criticized his marketing speak, success and business acumen.

---------------- UPDATE: For a reason which Artnet News has not explained, following (but, one can not say definitively, as a result of) this blog post they changed the title of their original blog post from "New York Times Exposes Peter Lik Photography Fraud" to "New York Times Exposes Peter Lik Photography Scheme", yet the original post URL with the word "fraud" in the URL points to the same article, yet the resulting URL displayed text now has "scheme" in it. Googles' dictionary here lists a few definitions - among them, as a noun, 1) a large-scale systematic plan or arrangement for attaining some particular object or putting a particular idea into effect; and as a verb 2) "make plans, especially in a devious way or with intent to do something illegal or wrong." Yet, they still characterize what he's doing as "fraud" when they write, in the (new?) last paragraph of the post "Perhaps the biggest believer in the Peter Lik fraud is the photographer himself."

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Govis said...

The problem is, with Lik owning his galleries, we have no idea what the actual price for these works is. They don't trade on the secondary market. How many is he actually selling? Is he selling/leasing to props and buying back? Inflating the price of his work is obviously helpful to him.

Bob said...

I saw a recent write about him in the PPA magazine. Some photographers have a really negative and at times nasty attitude towards him. I have no issues with him whatsoever. Whether or not his art is worth the thousands of dollars they sell for is up for debate. Either way the guy is a master marketer and IMHO other photographers should take notes from this guy about creating demand.

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