Johnny Blogger

SURTEX Report

The report is good. Definitely worth spelling SURTEX in capital letters as the show organizers want us to (does anyone know why?) In fact I'll give bold, underlined, gold-colored, enlarged caps to SURTEX for this year's show! (SURTEX is the art licensing show held at New York's Jacob Javits Center annually alongside the National Stationery Show.)

Licensees kept us busy all three days. Surprisingly our 4 booth exhibit was the biggest in SURTEX, but we needed all of the space. The appetite for artwork is as strong as we have ever seen it, and manufacturers were highly focused and productive in identifying imagery appropriate for their particular product. Customers reacted to the images on the wall, stacks of artist portfolio books, and bottomless collections of art on iPads.

Despite reluctance to join a group that would accept me as a member, I participated on a panel discussion on "Strategies for Working with Manufacturers" along with representatives from Leanin' Tree, Prima Design, and Mohawk Home. It turned out to be a lot of fun, with an animated audience of aspiring artists.

Show traffic seemed similar to previous years, but we're not sure since almost all of our meetings had been set up by appointment. We did meet brand new people, some in segments of the market where we've never played before. And that's the cool things about art licensing: there's always new places for good art & design.

 

Report from FrameArt Expo

The 3 day FrameArt Expo in Rome, Italy ended today. Here's a quick report: It was a good show for Wild Apple.

Now the longer version. Only 2 North American publishers exhibited (Wild Apple and World Art Group), along with a dozen or so European publishers, the rest of the show being moulding and framing equipment companies. We saw people from 24 (!) different countries, including a lot of Eastern Europe (Russia, Poland, Slovakia, Serbia, Kazakhstan, Hungary, Romania), Egypt, India, Australia, as well as Central Europe. We did not see any South Americans, and only a small handful from USA, Canada, and China.

Last year we also met people from many countries, and only a few turned into regular customers. So I'll temper my enthusiasm until we see results, but this time it felt like people were a lot more serious and not just tire-kickers. My impression from the Europeans is that business is still tough, and to me it feels like the US did in, say, late 2010 - glimmers of positive news but tough slogging day to day. Eastern Europeans by contrast seemed very positive and vibrant.

FrameArt Expo alternates annually between Rome and Milan. This Rome show was tough logistically, with endless walking and trains and trams required. Countered, of course, by the opportunity to gorge on unbelievable food, and to enjoy the beautiful spring weather. We will definitely be back next year.

Real Not Fake Good News

A positive story ran in today's Wall Street Journal about Chinese consumers desiring real products, not fakes. Retailers who had previously hesitated to open shop in China for fear of being ripped off are now expanding aggressively. One survey cited found that 95% of 28 to 35 year old women would be embarrassed to carry counterfeit handbags. This rings true to me, having been struck on a trip to China last summer that there were so many high end brand name stores, including Prada, Gucci, Coach - - even though they do get ripped off, the amount of legitimate business justifies a lot of retail space.

Having had untold amounts of Wild Apple artwork ripped off over the years, this is welcome news. Cultural shifts like this will take time, and it would be naive to think that the counterfeiting problem is under control. And we'll embrace any step in the right direction.

Vegas Pays Off Big

Best show in a dozen years. That's our summary of the West Coast Art & Frame Show held last week at the Mirage hotel in Las Vegas. Strong attendance from around the country and around the world. A great new venue for the show. Positive energy from buyers. Best of all, a feverish hunger for artwork!

I believe I qualified for Nerd of Show Award: with a series of early morning meetings involving public speaking, late night carousing was not an option. A small price to pay in exchange for days that were so full of action.

Now it's time to follow up on the mile-long to-do lists. Viva Las Vegas!

Showtime!

Tomorrow we head to Las Vegas for the West Coast Art & Frame Show. I predict a very strong and frenetic show. I have a feeling it's going to be one of those where you never even get a chance to eat lunch. It seems that everyone is coming - from all over the world. This has been a great show for the last decade, and promises to be even better now that they upgraded the location to the Mirage. Bring it on!

SOPA Controversy

Hey! Remember the artists!

The frenzy attacking legislation known as the Stop Online Piracy Act (SOPA) and the Protect Intellectual Property Act (PIPA) has Wikipedia closed down today and Google's homepage showing a censored logo. Right now the overwhelmingly dominant voices in the media oppose the acts.

I am 100% in favor of protecting intellectual property rights of artists, authors, musicians and adding teeth to copyright enforcement. In all the current anti-censorship fury, I don't want the copyright concept to be drowned out. The art publishing and licensing industries continue to be plagued by illegal rip-offs, meaning we are not being paid and our artists are not being paid.

Do SOPA and PIPA go too far? Probably. They put too much authority in government to declare who is or isn't legit, and expose websites to excess liability even when they act in good faith to remove infringing material.

Watching, reading and hearing the news, I think that SOPA and PIPA are DOA for now. But I hope that efforts to beef up copyright protection continue and we raise consciousness of artists' rights.

Goin' to Goa

It's great being part of a widespread eccentric family, especially when you get to go to your cousin's wedding in Goa, India. And not just because you get to play Indian dress-up.

This was a personal trip, but I couldn't help setting up a business meeting along the way. While Wild Apple has done business all over the world for the last 20+ years, India has always been something of blank spot. We'd love to play with over 1/7 of the world's population! I think we can develop a niche business in India; our cultures and imagery are so different from each other it will be a long time before we could ever go mainstream.

Among the impressions I bring back are the sights - rich varied colors, textures, bling, especially on women's sarees, decorated buildings, bright advertising, and lots and lots of litter; the sounds - it's loud! Car horns in constant use, blaring music; the movement - Indian traffic is crazy (for entertainment we sat and watched the endless stream of motorcles, cars, bikes, camel carts, rickshaws, pedestrians, and wandering cows - crossing the street was an adrenaline rush); the spirit - I was struck how integral religion is to daily life, not an abstraction; our different lenses on life - I see utter confusion, crowds and disorder, whereas they might see our life as sterile and lonely.

"Incredible India" for sure.

Occupy Wall Space

Have you ever tried coming up with a perfect company mission statement? It's really important, and it's a quick route to the funny farm.

Playing off of current events, "Occupy Wall Space" doesn't do the trick, since it ignores the half of our business licensing art for home products that aren't on the wall. We used to state our mission as "To discover and develop innovative, on-trend artwork to create products that people want and can afford." Too clunky. So we edited it to "We find and develop on-trend artwork and bring beauty to the mainstream market."

We thought we had it nailed and were a little proud of ourselves. But at a planning retreat our outside facilitator described it as "just over the Sucky line." Still a little clunky and corporate sounding. So we went back to the drawing board, where we remain with about a million (I exaggerate) versions.

We know what we want to say, we just don't have the exact right words to make it short, compelling, aspirational, and full of pride. The heart of our mission is picking art that is right for the market, and making it accessible. There are infinite choices out there - see Getty or Corbis, for example - so selecting from the art universe is key. Making great art available and affordable has been central to us since day one. In current political lingo, we want the 99% to be able to have beautiful art, not just the 1%.

Discussing our mission statement publicly like this may be a corporate no-no, but I feel like it's OK since we're just trying to craft the right words. Here's a sampling:

• We find great art and make beauty accessible to everybody.
• We bring art to Main Street.
• We make great art accessible.
• We bring great art home.
• We make it easy to get great art.
• We bring art to life

Not sure yet, but after all this, we may end up sticking with clunky!

The Price of Art

Art World News had the questionable judgment to publish a guest article from me in their current issue, as follows:

I’m a capitalist, which means I believe in the free market, which means I (have to) believe in competition. My economics courses taught that competition forces prices down, an easy theoretic concept to digest. During my 21 years (so far) in the art business, Reality corroborates Theory beyond any shadow of a doubt. To overstate the obvious, price does matter, yet the actions of our industry suggest we forget to compute the enormous cost of “competitive” pricing, in other words, reducing prices.

For years industry guru Jay Goltz has been pounding on custom framers to maintain their prices and in turn profitability. The inconvenient truth is that math is math whether you are a retailer, a framer or a publisher and that skipping the step to calculate the cost and effect of pricing decisions can be disastrous. Each level in the food chain buys into the idea that the lower the price, the more units you’ll sell. Everybody knows this but do they really know the effect of lower prices on profitability? Something to keep in mind is that you have to sell a lot more units to make up for the lower price. If your business runs on a 40% gross margin, and you lower your price 10%, do you realize you have to sell 33% more units to make the same gross profit?

If your gross margin is lower, the effect gets worse. This example assumes that your Cost of Sales per unit is entirely fixed, but even if it is partially variable, the percentage increase in unit sales required will be greater than the percentage decrease in price to make the same gross profit. The calculations are shown below.

Again, I emphasize that the same analysis applies to retailers and framers, not just whiny art publishers. And even though I know the math, there’s nothing like competition to keep me and my prices competitive.

Your price		10% Discount
$1.00	Price/Unit	$0.90
-$0.60	Cost of Sales/Unit	-$0.60
$0.40	Gross Profit/Unit	$0.30
x 100	Units sold	x 133, a 33.3% unit increase
$40.00	Total Gross Profit	$39.90

Powerful Tool to Fight Illegal Copies

Google has made it very easy to find uses (legal and illegal) of a specific image on the web. On Google's main site, click Images at the top of the page, then click the camera icon in the search box. You can paste a URL or browse to the image you want to search. (Detailed instructions here.)

This will make it a lot easier to police illegal artwork out there. The more artists, publishers, and retailers who know about it the better; transparency will help keep people honest. So spread the word.

Special thanks to Cedric H. who wrote about this on LinkedIn's Art of Licensing group.