Brokerage Intervention

According to the 2017 edition of the "Art Market Survey", which is published annually by the South Korean Ministry of Culture, Sports and Tourism and the Korean Arts Management Service Center, the size of domestic art market transactions surged to 396.5 billion KRW as of 2016, up 1.6 percent from the previous year. According to the market share by major distribution area, 41.2% accounts for galleries, 37.3% accounts for auctions, and only 21.5% for art fairs. These are all transactions that are implemented through the brokers, and in the case of galleries and art fairs run by galleries, the brokers receive up to 30-60% of the commissions of the sold/purchased artworks, and in the case of auctions, fairly large commissions of 10-18% each are charged to the consignor and the successful bidder. These kinds of high transaction costs are a factor that prevents sufficient compensation for artists who actually engage in the artwork creation activities, which is a major obstacle to the growth and revitalization of the art market itself. In fact, in 2013, when the Internet-based artwork 'ifnoyes.com' by Dutch media artist Rafaёl Rozendaal was sold at the Phillips Contemporary Art and Design House, tons of controversy arose due to the brokerage involvement.