Market Analysis

According to the National Endowment of the Arts, there were 2.1 million people
who considered being an artist as their primary job within the United States in
2009. However, designers make up 39% of that pie, which translates to
1,281,000 professional artists in the US. When you include the 264,000
individuals who consider being an artist as their secondary job that brings the
count up to 1,545,000. In order to confirm that the number from the National
Endowment of the Arts is in the correct ballpark, we cross-referenced the number
with the results from the Center for Arts and Cultural Policy Studies at Princeton.
Given the preceding data, we conservatively estimate a domestic artist
population of between 1.2-1.5 million artists. This number will grow over time as
the number of college art degrees is at 129,000.
If you research the market you will find sites that are not listed below. Simply put,
there are more places to buy art online than we can mention. The conclusion of
this research is not that there is a lot of competition, but rather that there is no
unifying force in the art industry. The majority of artists that sell online still do so
via a personal website. Our platform will be the unifying force that brings all these
individual artists together, by providing them more value than an individual
website ever could.

Art Market

Market Highlights
International Art Market: $30 Billion
Domestic Art Market: $8.6 Billion
China is the fastest growing art market, followed by Latin America1

Price Point Gap

Static art (Walmart, Target, etc.) average sales: $20-$300
Original / Commissioned art sales: $900-$UP
Market Gap: $300-$900

Art Industry
Gallery Commission: 30%-90% (Average: 50%-60%)
Galleries only feature the most elite artists
22,605 Domestic Art Dealers2

Artists
1.2-1.5 million domestic artists3

http://www.artworldsalon.com/blog/2011/07/are-we-booming-yet/#comment-901
http://www.ibisworld.com/industry/default.aspx?indid=1104
3
http://www.nea.gov/research/Notes/105.pdf
2

of all artists (globally) havent yet sold online4

US Geographic distribution (top states in order): New York,
California, Oregon, Vermont, Colorado, Connecticut, Hawaii,
Maryland, Massachusetts, Minnesota, Nevada, New Jersey,
Washington, and Rhode Island5

Target Demographic
Artists: student artists, non-career artists, regionally known artists
Consumers: Female, College Educated, Age 25-35, income >$60K6

International Artist Survey7

Artists Distribution of Income From Online Sales

http://www.princeton.edu/~artspol/quickfacts/artists/lbrfrcartist.html
Http://artweb.com/Art- Web/How-Much-Will-Artists-Sell-Online-In-2010/

http://www.arts.gov/news/news11/Research-Note-105.html

Alexa.com using our closest competitors, UGallery, Etsy, DiscoverOrignialArt.

Web/How-Much-Will-Artists-Sell-Online-In-2010/

7 Http://artweb.com/Art-

!
Frequency of Sales (Artist Selling online)

Patterns of Distribution (Artists Selling Online)

Number of Sites a Single Artist Will Utilize

Artist Demographics

!
Gender:

Age:

!>!45!

Target Market (Explained)

We are creating a community of artists. Our market is anyone who loves art.
This includes artists and art enthusiasts alike, those who create and those who
consume. Anyone who likes to buy, create, enjoy, decorate and design art will all
be a patron of our site.
The site is perfect for budding artists who are just getting started. Many times
artists have to do unpaid internships, work for a professor, or do works for free
while they are still in school. This site offers them an alternative. They can get
paid to do the things they love to do, create art.
We also appeal to experienced artists. The current preferred method for artists
selling online is to create an independent website. However, it takes an extensive
amount of skill, time and money to create an effective site. Most artists do not
have high levels of technical skills, and even if they did, they wouldn't want to
spend the time maintaining their own Internet storefront. Sites like BigCartel.com
offer assistance in the process of establishing a web presents, but their service
offering is extremely shallow and leaves the artists to maintain the operations of
the site. This detracts from artists being able to do what they love, which is being
creative and not getting overloaded with the administration.

We want to create a community of users who consume art as well as create it.
We also want to appeal to individuals that like art, but have never had the means
to purchase any original works for themselves. For example, there is a huge
demographic of casual browsers of art, who enjoy simply going to museums and
galleries. However, they may not own any original art due to the time and effort it
takes to commission art, as well as the risk and financial factors. Many resort to
purchasing some cheap mass-produced piece at Wal-Mart or a knock-off gallery.
Our site is the perfect entryway to allow the middle class art enthusiast to
become an art collector.

Market Gap / Blue Ocean strategy

Currently consumers that want to buy art have two primary options, they either
buy static art (printing press) from a distributor (Wal-Mart, Target, Bed-Bath-&
Beyond,! etc.) or buy (commission) original (one-of-a-kind) art from an artist or
gallery. The first option ranges from $20-$300 and the second ranges from $900$Up. Between $300 and $900 is the market gap that Artist Bound is targeting.
We are providing the middle class with the ability to commission one-of-a-kind
works of art at affordable prices because we utilize undiscovered artists that are
willing to work economically. This gap is illustrated in the following industry
diagram, connecting consumers of art (by income demographic) to the current art
!
market supply (by price point).

ArtistBound
ArtistBound

Market'Analysis/'Value'Propositi
-Art Industry Analysis-

Artist Bound

Artist Bound

$900!

ArtistBound
.com

.com

$300!

Artist B

!
ound!

Blue Ocean Strategy: The following 4 Action Analysis outlines the strategic
methodology we will use to penetrate the industry gap illustrated in the above
diagram.

Four Actions Analysis

Eliminate
-Elitist artist selection process
-Stereotypes (only rich can collect art)
-Student artists fear of entering the
industry
-Restrictions on artistic mediums (paint,
clay, metal, etc)

Raise
-Artist service offering
-Customer service offering
-Broaden consumers ability to
commission art geographically
(worldwide)
-Transactional security

Reduce
-Commission rates
-Art profession barriers of entry
-Price of art supplies, (leveraging
unified buying power
-Price of shipping, leveraging
unified shipping rates
-Gallery industry control (empower the
artists)

Create
-Innovative commissioning process
-Community of artists
-Artist Profile (all-inclusive portfolio)
-Artist backend admin tools comprised
of everything an artist needs to
maintain a career (taxes, sales data,
etc)

Competitor Profiles

Analogous Business: Ugallery.com

Corporate Valuation: $9,152,000 (Based only on Traffic and ad
revenue)
Growth: 21.38%
Founded: 2006 by 3 ASU students
50% Commission
Only features selected artists (painters only, w/ $5 application)
Refund policy: 1 Week
Free shipping
Free weeklong test run on any piece of art, risk free (includes free
return shipping)
Just launched their wedding registry

The average age of their artists is 26

Featured by:

Featured as Innovative solely based on their ability to offer commissioned art at a

price point inside the industry gap ($300-$900). Their average price point is
$500. They do this by employing a handful of student artists.

Distant Competitor Profiles

Custommade.com
Focus: made to order furniture and art
Pricing model: 10% commission, $1000 cap
Weaknesses
Primary focus is not in the art industry
Lacks secure payment process

Carbonmade.com
Focus: open online portfolio creation
Pricing model:
5 projects and 35 images for free
$12/Mo for 50 projects, 500 images, 10 videos
Growth: 100k users in 2 years, 200k in 3 years, 600k in 5 years

Allpopart.com
Focus: Upload pictures for portrait creation
Narrow focus (only portraits)
Lacks complete customization (limited options)
They use only internal employees (does not engage entire artist
community)

Etsy.com
Allows users to sell items they have created
A collaborative selling platform as opposed to a custom art site
Pricing model: 3.5% commission, $0.20 per listing
Similarities: community collaboration

Weaknesses
Focuses more on handmade crafts
Doesn't allow consumer to dictate what they want

Elance.com
Allows consumers to post desired work needs
Review process includes shared workroom to track progress
Pricing model: 8.75% service fee (escrow payment protection)
Weakness:
Freelancers do not get any payment upfront
Does not focus on art market

Bigcartel.com
Allows artists to easily set up their own website with a portfolio
and cart
Requires large initial investment
Monthly subscription pricing model ($10, $20, $30 Mo. plans)
Weakness:
Leaves artists to market the site themselves
Each site is its own entity, no community aspect

Other distant competitors include:

Artsic
Zatista.com
Discoveroriginalart.com
Mybestcanvas.com
Collageartonline.com
Lovecustomerart.com