How I Collect

Cultural Entrepreneur Stefan Simchowitz on the Merits of Flipping, and Being a "Great Collector"

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Cultural Entrepreneur Stefan Simchowitz on the Merits of Flipping, and Being a "Great Collector"
Collector and art advisor Stefan Simchowitz

If you bring up the name Stefan Simchowitz in the company of art dealers, collectors, advisors, or other professionals, you are bound to get a vigorous reaction. A producer of Hollywood movies like "Requiem for a Dream" and a co-founder of MediaVast, the photo-licensing site that was sold to Getty Images in 2007 for $200 million, Simchowitz is one of the world’s most successful—and controversial—collectors of work by emerging artists. He also works as an art advisor to a coterie of enormously rich young mavericks from the tech sector and entertainment business, both flush fields that have been traditionally difficult for the art market to penetrate. How has he accomplished this? By positioning himself, convincingly, as a disruptor almost entirely at odds with the art establishment.

In fact, many people may have first encountered Simchowitz when he was featured in Katya Kazakina’s widely read Bloomberg article about “art flippers,” which reported that he had bought 34 paintings by the white-hot market star Oscar Murillo—whose canvases can now command as much as $400,000 at auction—for a total of roughly $50,000 early in the artist’s career. But Simchowitz’s real market influence might be found online, where he uses his Facebook and Instagram accounts to advertise the young artists he is championing (such as the Post-Internet star Petra Cortright, who parted ways with her gallery, Steve Turner Contemporary, to pursue alternate modes of distribution) and inject a potent sense of “virality,” his favorite term, into the art world.

To find out about the philosophy guiding Simchowitz’s multipronged assault on the traditional art structure, Artspace editor-in-chief Andrew M. Goldstein spoke to him about the rise of the Post-Internet artists, the vulnerabilities of the gallery system, and why he considers himself to be a great collector. 

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As a collector and art advisor, you have a unique way of manipulating the levers of power in the art market on behalf of yourself, your clients, and the artists that you work with. The way you operate is in stark contrast to the traditional modes of doing business in the art world. Can you talk a little bit about the worldview behind your approach? 

The alchemy of art is that it’s not just the artist who produces the work but the spectator and audience that essentially refines the art in its raw state into a refined product. After 1945 and the destruction of World War II we saw the emergence of the postwar art world in a very systematic way: you had the emergence of small galleries, expert writers and critics, academics, curators, and small groups of artists—many of them emigrants escaping the bleak landscape of Europe—that led to the expansion of the art business, both demographically and geographically. And over a 60-year period, as dealers like Leo Castelli guided artists’ prices to grow in a linear fashion, art was given its value by the people who wrote about it in journals and more traditional media. 

Then the Internet occurs, you have the browser, and in 2006 you have the emergence of what is essentially the mainstream social media, and you begin to see the distribution of imagery and artworks begin to expand online at the same time that you see the rapid expansion of the art business, because essentially there’s much less friction for the spectator to experience the artwork. More people see the art, more people can consume it and engage with it, and, more importantly, many more people have started taking and sharing photos and describing what they’re seeing. These posts aren’t in a descriptive format like a critical review, but they’re microbursts of cultural criticism that can balloon to be seen by a multitude of people.

So one artwork can be encountered by 20 people, but if they capture an image of it and distribute it then the viewership can become exponentially larger. In this way, the curator, the critic, and the context become fragmented, and we go from a hierarchical system that’s controlled from the top to a system that’s more like a beehive, where many people performing very simple actions can be aware of each other and create an organism that is actually extremely intelligent and able to achieve huge results. This is changing the way culture is distributed and marketed and thought about, which I think is pretty radical.

How do you use social media professionally?

I think that when it comes to art and culture, as opposed to having singular authorities that define it, you have what you could call amplification nodules—people who for some reason have cultural integrity and a following that they address through a social-media structure. And it’s not so much about speaking to a mass of 10,000 people, but rather being followed by key decision-makers, players, and collectors in that network. I happen to have been communicating on Facebook actively for many years now—I joined in 2008—and I really am an early adopter of not only social media but also what I call ‘curated social media,’ systematically managing my Facebook presence, which is essentially a very inexpensive way to have an editorial platform that people can follow. Instagram has been an extension of that, and I use it less to directly market artists than to create some kind of narrative around their work.

You call yourself a “cultural entrepreneur” rather than an art advisor. Why is that, and what does that mean?

I think art advisory is very banal in that it generally simply involves someone who has access to several rich people and who, relative to those rich people, has slightly better taste. There is very little required to enter the field. On the other hand, I run an extraordinarily expansive broad network of people who listen to me, who follow me, who are interested in this sort of ideology that I set up. I am not an art advisor that sends a client a PDF of 20 works to see what they like; I send one work and say why that client should buy it.

It’s a very different system, and there are a lot of people who are trying to do what I am doing because I have done very well, and there are outsized returns. But people who think, “Gee, I can buy a piece of art from a gallery for $5,000 and sell it for $25,000” don’t understand the complexity of thinking necessary to get to this position. It requires research, knowledge of the canon, knowledge of the past. And a lot of young guys can get access to A-level material for ten minutes, which is happening across the board, but at the end of the day it’s going to be very short-lived. The interesting thing is to be part of the paradigm shift, to initiate the paradigm shift, and support the advanced artists who are working within that paradigm shift. That is what’s interesting to me.

What kind of clients do you work with?

I work with so many clients, maybe 100. I have some very high-profile people as my core clients, but I work with many, many people. I’ve managed to build an extraordinary following in the art market that is very unique. I work with Sean Parker, Steve Tisch, Orlando Bloom, Guy Starkman, Enrique Murciano, and Rob Rankin, who is the head of investment banking at Deutsche Bank worldwide. I also work with young people like Justin Smith, who is a professional poker player, and I have clients in Australia, Israel, everywhere. I think you need a very widely distributed clientele, with everyone from the very rich to people who need to stretch to buy an artwork. You want to mix it up, like a school—you want diversity, as opposed to the traditional system, which is just looking for the super rich and famous clients. Advisors like that end up becoming inbred in their distribution. I think if you create diversity then you’re able to create a much healthier and more profound mechanism for cultural distribution.

You have to think of culture like it’s oil in the ground: it needs to be mined, refined, and it needs to be distributed. And the traditional system doesn’t like anything to be outside of its control—it likes you to follow a chain of command, to go to art school and get an MFA, to be nice and polite to the right people, to follow the chain of progression in the gallery system. It likes ticking off the boxes. But what happens in this new environment is that many of those requirements have been bypassed, because the network is able to support and sustain cultural distribution, still using the traditional systems as infrastructure but not solely relying on it in as much as they did in the past. And my role in the system is to provide that sort of intermediary support in the advisory and management capacity to clients who collect work but also to artists who create work and galleries that need assistance in navigating this new environment.

How do you work with galleries?

I help dealers decide which artists to represent, how to represent them, how to navigate the complexities of the new environment that has so many more participants, what to do strategically. My advisory capacity is very expansive—it’s not just, “Hey, let me walk around with a client at an art fair and find a piece to buy.” In fact, if I walk around an art fair, it’s never with clients. I walk around alone, and it’s not a shopping exhibition, I’m really gathering information, intelligence, figuring out what strategies to follow, and then acting. So my approach is very different—it’s about creating a substrate in the system that can help different players in the art market coordinate their actions so that cultural distribution can be managed more efficiently.

Some of the artists you have been looking at include Parker Ito, Amalia Ulman, Jon Rafman, Petra Cortright, Mark Flood, and Artie Vierkant, all very interesting figures that share a certain aesthetic. How would you describe what you look for in a work of art that you collect or that you guide clients to collect?

I look to identify a movement, and I look to identify macro-trends. What is going on in the world? How is the world changing? What are the power shifts at play? The world is constantly in flux and constantly in a period of hierarchy-restructuring. The key is to understand what exogenous factors enter a marketplace and will change it. I thought that the Internet was a very important thing in changing the way we see art and how we experience art and also how we experience history—how an artist today can go online and travel from medieval art to 17th-century Florentine art to contemporary and back in the same moment, because everything is present on a flat surface, as opposed to in the past where you would have to sequentially go through the Met century by century. The Internet changed everything, changed how art is identified. So, who are the artists who are working in this new structure, and who are going to be the leaders in that space of cultural production in coming years?

That’s how I found Artie and Parker and Jon, who I met in 2009. I was Parker Ito’s first client, I was the first guy who bought Artie Vierkant, the first guy who engaged with Jon Rafman. In all of these guys, I identified the makings of a movement, so I went to them and provided these artists with support. I introduced Jon Rafman to Seventeen, a very good small gallery in London, which introduced him to Zach Feuer. I introduced Artie to China Art Objects, which did his first two-person show and got him the “Image Objects” essay in Artforum. I introduced Parker Ito to Johan Berggren in Malmo to do a group show there, which was with Artie, Parker, Jon, Ben Schumacher, and Chris Coy. When they wanted to go to Sweden, I bought them their tickets to fly there. I mean, they had no money, you know? These guys were just kids, and I supported them and helped them get a gallery infrastructure to build their early-stage careers, gain momentum, and get started.

A lot of it is instinct, and it’s difficult to explain, to be honest with you. I can just feel it. When I saw Oscar Murillo’s work it was immediate. No one else saw it at the beginning. I can’t explain it. I saw it at the beginning with Lucien Smith. I was the first guy to buy a rain painting, and then I was the first person to buy two rain paintings. I can just see it. I can feel it. It’s weird.

You mentioned Murillo, who is one of the artists that you have collected in depth. But while he is certainly a market success, his work does not fit into the same Post-Internet aesthetic as the other artists you mentioned. How does his work tie into your vision?

Do you like science fiction movies? In these movies you have the guys in the spaceship who are wearing their fancy modern suits and carrying their special weapons. But what happens when they go down to the ground of the planet that’s under attack? What is Luke Skywalker wearing? In every science fiction movie, the guy in the space ship has a laser gun and the guy on the ground is wearing medieval peasant robes. Why do you think that is? Because human beings have a relationship to technology that is bipolar.

On the one hand, we want to embrace technology and utilize it and manifest its power and integrate it within our existence to empower ourselves; on the other hand, as this empowerment extends and expands, there’s an urge for humans essentially rid themselves of technology and go back to the earth and almost worship nature. People go to Burning Man, they do yoga, they eat organic food. It’s very interesting—if you look at the technocrats in Silicon Valley, they revolve their day-to-day lives around yoga, healthy eating, organic farming, and sustainable ways of living, all matched with technological enhancement.

Strangely, very few people think of this, but I would call what Oscar Murillo is doing neo-primitivism. Eddie Peake also has an almost neo-primitive way of making work. It’s ritualistic in nature, and exists in polarity to the Post-Internet movement. I see these approaches as the North and South poles of what is going on. So, I look for artists in that Oscar Murillo category now more than ever as technology is accelerating. I also think Oscar’s work is interesting in that it really is about hierarchy disruption to some degree—it’s about flipping the order of things, setting the painting on the floor, using all the trash in the studio for the art. A lot of the work has gamesmanship to it—like he’s playing a constant game of chance, and there’s a prospect of winning or losing.

Oscar’s market has risen so quickly—do you consider there to be any risk in collecting him? 

I think Oscar, frankly, is probably the most significant artist to have arisen on the art scene in the past 40 years, in part because he also demonstrates another one of my megathemes. The idea that art is produced in power centers like New York and L.A. by white art-school-educated people who talk about the canon and come out of the academic structure is basically very problematic. What we are going to see is the emergence of people who are disrupting this hierarchy, and they are not marginalized figures—its not like anyone thinks that Oscar Murillo is a marginalized figure because he’s from Colombia and he’s dark-skinned. He is central to the practice. He is the conversation.

So that’s a major shift, and a very interesting one I think. Murillo is not like Joe Bradley, whom I love and whose work I adore, but he is captured in this network by Gavin Brown and the New York-centric environment, which is part of the traditional mafia. Finally, in Oscar you have this artist who bypasses that whole system, and in fact was initially largely rejected initially by that system as being a copycat of Joe Bradley. Now they can’t capture him, they can’t own him, the can’t possess him, and they can’t even catch up to him.

Looking at this theme of artists who are outside of the structure, Alex Israel has colluded directly with the system but in an exaggerated manner. He will only sell to rich and famous people, and he manages this very closely—he looks at the invoices himself and checks who has the work. Everything is part of a strategy to build a market among a group of people who will then trade his work within it and make it become very expensive. It is very collusive. But with Oscar, there is no collusion—his collectors are an evenly distributed group of people who love the work, and who collect it on their own accord all over the world. That’s interesting. That’s real culture, that’s real distribution, that’s a real market.

I believe the Post-Internet artists are really similar in that way. I think their distribution and their cultural profiles are much broader and exist outside of the traditional networks of distribution and control as they are centered in New York and London. What I’m doing, essentially, in that I am working with these young guys who are well known but who aren’t coming through the system—they’re not being developed at Andrea Rosen, David Zwirner, or the other major galleries. They’re coming out of nowhere. Its similar to how when the Germans invaded France, they didn’t go through the Maginot Line, the extraordinarily complex set of concrete pillboxes that the French set up to defend their country. They went through Belgium. So the heavy, immobilized infrastructure that France erected was made irrelevant through a very simple maneuver. I believe this is what’s happening in the art market, with many of the galleries and other traditional systems—including the consultants—having immobilized themselves through size, scale, and over-investments in infrastructure.

What’s remarkable is that there is so much movement and liquidity in this emerging area of the market, with new stars being minted so often and so quickly, that collectors who buy into these artists early can make a 3,000-percent return on their investment a few years later by flipping at auction, as Katya Kazakina reported. What is your view on flipping?

You can walk up and down Chelsea and see overpriced art every day by young artists to mid-career artists. What are these galleries trying to do? Extract the maximum margin possible. I believe in the trading infrastructure of the market, and I believe in inexpensive channels for art that allow it to get redistributed and redistributed and redistributed with great virality. If I sell you something for a dollar and you sell it to your mate for two dollars and he sells it to his mate for four dollars, and he sells it to his mate for eight dollars, and he sells it to his mate for 10—well, that’s five collectors who bought the work, discussed the work, studied the work, and made a profit from it. And then they feel good about investing in cultural production, which is a very difficult thing to do because art, at the end of the day, has no value.

So, the more confidence you can bring to the system, the better it is for the system. Instead of looking askance at those 3,000-percent returns that Katya wrote about, people should realize that when that article went viral it alone was probably responsible for bringing thousands of new participants into collecting emerging artists contemporary all over the world. One of the best thing that can happen is that investments are made in cultural production in an efficient way, as opposed to giving money to institutions, where a most of the proceeds go toward lavishing their boards of directors with fancy galas or building expansions by architects who mess up, or by doing shows that are managed by backward-looking institutional curators. And the most efficient way to invest in cultural production and support young artists is to buy their work and to give the people who buy their work confidence that they can make money from it and buy more.

Within the gallery world, flipping is looked at very negatively, because it can create upheavals in the artists' market that could derail a promising career.

Yes, the traditional gallery system is antagonistic toward this, of course, and they will say there’s a danger for artists of things happening too fast. But it’s only happening too fast if you’re a young artist and your response to it is that you’re going to go out and buy a Ferrari and say, “I’m going to raise my prices by 400 percent and act like an asshole because I have so much money now so I can be a prick.” The galleries say, “Oh, the speculators are bad.” But the galleries are too greedy, so they’re raising their prices and building bigger spaces in order to further raise the prices of the art and encourage more production. Their response to the market is what’s negative, not the market. The market should be embraced.

The critics also fall into this trap, because instead of looking at Oscar Murillo’s art they are so consumed by the price points and the auction records that they never discuss the work. Why does Jerry Saltz and every other critic want to write about money? Because their readership likes reading about fucking money, because people are greedy. If you put a headline on the article like “An Opportunistic Collector Makes a Fortune Collecting Young Art,” people are going to read that, and since the publications are driven by advertising revenue they need those readers. The system is structured in such a specific way. But, at the end of the day, the results are very positive. 

Oscar Murillo, 27 years old, comes from less than nothing, but has been so mature in how he has handled the market. He hasn’t gone googoo and gaga. He hasn’t expanded studio space. He hasn’t bought a Ferrari. He’s a sane guy. He works by himself. His uncle Carlos sometimes helps. It’s about the response that the artist and the gallery system have to the market. Are there 3,000-percent returns? Sure, there are 3,000-percent returns. But I can tell you that when I met Parker Ito when he was 22 and he wanted to sell me a painting for $750, it was a lot of money for him. And then when I sold that painting for $1,500, the guy came back to me six weeks later and asked for his money back because he thought the work was shit, so I gave him his money back. Now that painting is worth a lot of money. It’s not very easy to make 3,000-percent returns. It’s the same as when you invest in an Internet startup—you’re only going to make 3,000-percent returns if you do it before you know what’s going to happen in the future. 

Another reason that galleries are so opposed to flipping is that they want to steward an artist’s work into significant, stable collections—and ideally eventually museum collections—so that the artist has a reputational bedrock that can outlast fluctuations in the market.

Yes, and I’ve seen work that has stayed in collections forever. It goes to rich old people—no offense to rich old people—who have no connection to the work. They have houses in Bel Air and Beverly Hills that are designed by some bad architect, and usually decorated by some second-rate interior decorator. They have ugly cushions. They frame the work when it’s not suppose to be framed, or hang it next to the toilet, and then forget it ever existed because they have so much money it doesn’t make a difference. Those are the “good” collectors.

At least these other people I work with are posting pictures on Instagram, hash-tagging them, communicating the work to their friends, and trying to sell it to their other buddies. Basically, the galleries want to sell the work and have it go to a dead space. It’s good when some of the work goes to great collections, and it’s also good when some of it travels through the marketplace. But if the galleries had their way, nothing would ever show up in auction, nothing would be traded, and no one would be the wiser that the art even exists. The galleries are not protecting the artist—what they are really saying is, “We want to extract the maximum margin for ourselves and keep it off the table.”

They manage this by essentially increasing the primary-market prices radically when there is demand, but what inevitably happens is that the artist sees his prices rise and thinks he’s a genius, and says, “Oh, I’ll produce 10 paintings instead of two.” And we have this expansion. But when Michelle Maccarone says, “We raised Ryan Sullivan’s work to $80,000 to protect his market,” she didn’t protect his market—she could end up killing his market. Because when you raise the price on the primary market to around where the secondary-market price exists, you lose the market. The thing that keeps the virality going is having a low primary-market price and a high secondary-market price, so you can always sell the work. But the minute you take away that marginal difference, you lose the momentum to be able to distribute work throughout the system, and that is momentum that takes years for an artist to build.

Considering that you have such an oppositional stance to the galleries, why do they sell to you?

I don’t have an oppositional stance to all of them—I have very positive relationships with many of them. Many of them have adapted to the new environment. Many of them are finding that their old models don’t work and are adapting, so they’re coming to me and doing business with me. I am also a great collector. I have Sterling Ruby, Joe Bradley, Tauba Auerbach, Oscar Murillo. I have one of the great collections of my generation, of emerging contemporary art. I have 900 works of art in my collection. I am probably one of the best collectors of my age group around, and someone told me that I’m the biggest collector of all my clients put together. I am ambitious, driven, educated, fully informed, and I also have a client base that is extraordinary. Many galleries don’t like selling to me, but at this point they don’t have much choice. The volume I do in sales is too great, and the client base is too good. Also, any attempt to further control the system in opposition to me will asphyxiate them and asphyxiate the artist, because in the changing dynamic the network of participants is very different, and I manage that network to some degree.

Speaking of this new dynamic, speculation in the art market has reached such a fever pitch that the art world was captivated a little while ago by a new site called SellYouLater that purported to rank artists by their market heat. Tell me what happened with between you and SellYouLater.

It was started by a young guy named Carlos Rivera, who created a scraping tool that analyzes certain people’s Instagrams to see which artists they’re looking at and what artists get liked. It’s  very simple. So he scraped my Instagram, and he scraped a few of my friend’s Instagrams. It’s not relevant—it is an opportunistic flash in the pan that got him some publicity. But if you look at the data, he just doesn’t have the real data. Carlos is a young guy, not particularly sophisticated, who doesn’t really have a cultural outlook broader than trying to index something. And the real data is unquantifiable.

So, I found out who he was, and I was somewhat irritated because essentially a lot of those artists were sort of scraped from the things I was doing and I didn’t like the context of it. I picked up the phone and had a conversation with him and said, “Look, you created a system that frankly has been able to take propriety information that I am very generous to give through my social media platform that you have used and abused in a bad way.” And he agreed with me and apologized, as he should have.

You must have been very persuasive, because he posted this statement on his Facebook page: "After a conversation with Stefan, we've agree that SellYouLater was a disrespectful tone for this analytics exercise. It is impossible to gauge cultural value in objective terms as is evidenced by some of our past inaccuracies…. We will aim to achieve a more respectful and accurate index." But now, instead of changing the way the site operates, they seem to have doubled down, renaming themselves ArtRank and charging fees for their data.

He did. He doubled down. He’s a young entrepreneur looking for a business model that can make money for prized information, and I wish him the best of luck.

Are you now working together in some capacity?

No, I am not.

You're deeply embedded in the Hollywood celebrity circuit as both the producer of "Requiem for a Dream" and a co-founder of MediaVast. How do you see L.A.'s entertainment culture beginning to mesh with the rising tide of contemporary art? 

It’s very simple: there are a lot of young people in L.A. who make a lot of money and want to participate in a social environment that is cool, and the art world has become the new movie business—it’s the new cool. It’s a world where they can play, learn, collect, and engage socially in a more mature way, rather than just going to the Cannes Film Festival. It has completely changed, and art has become so much more culturally immediate to so many people that it has become the de facto definer of social hierarchy in Los Angeles. Going to a museum gala or a nice art event is the thing to do. The whole social hierarchy has been changed by the art business and its expansion, and frankly by the opportunity to make money from it, because these young agents and executives like making money. Now L.A. is no longer a movie-business town—it’s an art town.

So now Darren Aronofsky is using art to market his movies—he produced an art show to go along with Noah. The equation has been rebalanced, and I think that’s a very powerful thing. But a lot of my ideas actually arise from independent movie financing, production, and distribution. In order to effectively distribute culture, it needs to be evenly dispersed, and the movie business taught me that you have to embrace many different strategies to achieve that. You also have to remove the friction to pull people to engage, because when you have friction people don’t participate, they walk away.

What kind of friction do you see in the L.A. art scene?

Sean Parker, one of my good friends and clients, has a young friend named D.A. Wallach. He’s a funny guy. So D.A. went to a gallery in L.A. the other day and he called me afterwards, furious, saying, “They were so rude to me.” Now, D.A. happens to be friends with Marc Andreessen, Sean, and about ten other people any gallery would dream of having as clients—and they dismissed him immediately. So I took him to an artist’s studios to have a different kind of experience. People like Sean and D.A. don’t like the system, and they don’t like how it operates. And Sean is a massive cultural figure, worth $3 billion. But these guys have been completely alienated from the traditional system. 

And you are positioning yourself as their way into contemporary art.

My whole approach in analyzing the system is very different. Is it oppositional? Absolutely it is oppositional. Is it intentionally oppositional? Yes. I want to change the system.

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