by John ColsonSteve Proffitt''s Internet article (July 17) was on-target – in 1996. It''s based on a factual error, dubious sociological generalizations, and ignores the root problems of an outdated business model and demographics. Movie Attendance: The Motion Picture Association''s own reports show that movie attendance is declining. "In 2005, the number of movie goers fell to its lowest level in eight years," falling 8.7 percent. Box office receipts for 2005 declined 5.7 percent despite an increase in the cost per ticket. By no statistical measure is Proffitt''s statement, "…movie theaters are doing a booming business," correct. The facts do not support Proffitt. Restaurants: 1) Any review of studies on dining out shows that the factors influencing growth are: restaurant proliferation, affluence, convenience/time. 2) Dining out is not a social interaction: the diner is not interacting with other diners, except for the screaming two-year-old at the next table. Nor is it social interaction to drive a car up to the take-out window. Car Travel: "Total miles traveled equals greater social interaction. Explain." This is a good question, which Proffitt fails to answer. Factually, commuters make up most of the increase in driving miles - where social interaction is limited to yelling at the driver who just cut you off. Isolated (or with family) inside a two-ton vehicle is not social interaction and there is no evidence to suggest a greater percentage of the population is going to see grandma. Shopping: "…retailers continue to build stores." More importantly, they continue to build websites. Factually, year-over-year some store sales growth is 1 to 5 percent, depending on the category. Internet sales growth is 10 to 50 percent, again depending on the category. No one is building a bricks-and-mortar site without a website to augment sales. Even the smallest local business recognizes the necessity of a web presence. There is no evidence to support the conclusion that shoppers, "…want to…shop…amongst other people." Let''s quickly look at the counter-evidence. 1) Civic organizations are withering. From the Boy Scouts to the PTA to the Rotary (or Lions or Elks) declining membership is a fact. People''s interests and available time have changed. These forms of social interaction are simply not as important as they once were. 2) "People don''t want to live isolated and sequestered lives." However, how we do that has changed. eBay has more than 200 million registered users worldwide. This certainly constitutes a community were social interaction takes place: from simple buying and selling to the ability to ask questions of sellers to its new sponsored blog to its conferences and conventions. MySpace, the internet site primarily for young adults, has grown to over 17 million participants in just over two years. From Wikipedia to blogs, the Internet is the place for social interaction with more than 75 percent of homes having a connection and more than 42 percent with a high-speed connection. What Proffitt sees as "…isolated and sequestered lives," is just the new reality. Ultimately, though, it is Proffitt''s analysis of the auction business that is more damaging than his foray into murky sociology. "…there is no reason to believe the Internet is going to overwhelm thousands of years of tradition and rewrite the social characteristics of our species." Businesses and business models change - just ask buggy whip manufacturers. Thirty-five years ago I was a runner or floor man at two to three auctions per week. Twenty-five years ago I attended at least one auction a week. Fifteen years ago that number fell to once a month. Five years ago it was 8-10 a year. In the last five years, I''ve attended a total of three live auctions. Have I completely lost interest in buying antiques? To the contrary, my expenditures are several multiples now compared to five years ago. What happened? First, the quality of merchandise at the local auction, through no fault of the auctioneer, has declined since its heyday in the 1970s and ''80s. Dealers will tell you that the biggest challenge they face is finding good stuff. Collectors, once the source of the dollars powering the market are now the bane of the market - as they became more sophisticated (and picky) they were less inclined to attend or buy at the local auction; and, once a piece goes into a collection it likely stays there, and off the market, for an extended period. Second, we''ve seen the rise of the regional or specialized auction. When sellers look to consign goods, their eye is on maximizing profit. If I have three 19th century portraits, will I do better at Fred''s auction five miles down the road or at, say, Pook & Pook? Clearly, my best interest is served by choosing the auction that can devote the advertising, time, money, and expertise to marketing my portraits. Sorry, Fred. Third, demographics work against the local auction. The simple fact is that too much of the auction audience is made up of gray-haired people. Bluntly, they''re dying off and haven''t been replaced by a younger audience. The younger audience doesn''t see the auction as a social event; their attendance is driven by buying and they are disinclined to attend simply as a social event. While older attendees supported the PTA and the Rotary, grew up in a close-knit community, and saw a 30-mile trip as an excursion, baby boomers don''t share this ethos. This is a generational shift in attitude that isn''t going to be reversed. Fourth, and lastly, underestimating the power and the reach of the Internet is the death knell of the local auction: auctioneers have to invest or die. I still participate in one to two auctions a month (excluding eBay); I''m just not physically present. When I can review a complete auction catalog online; when an e-mail or phone call will answer my questions and get more photos; when I can bid online, by phone, or absentee, why should I travel several hundred of miles to bid on one or two items? Would I prefer to see and touch the item before I bid? Of course. But the good auction houses provide me with a level of expertise and interaction I could never get at my local auction or even onsite at a regional auction. A subtle advantage they offer is trust. I know that if Pook & Pook describes a portrait as 19th century, relined, minor in-painting, circa 1830, that the painting is exactly what they purport. The Internet is the most powerful auction tool since the invention of the gavel. In the last month I''ve participated in auctions in Maine, Massachusetts, Ohio, Pennsylvania and South Carolina. It would be physically and financially impossible to do this without the internet. People who see the Internet as a great place to sell Beanie Babies but not much else are flat out wrong. This summer I watched a painting go for $920,000 (plus premium) and a Maentel watercolor for $469,000 (plus premium). The first thing any auction needs is buyers and there''s no better way to reach buyers than through the Internet. An auction house that establishes itself as having buyers will attract consignors. Consignors aren''t going to a house where they don''t see buyers. Auctions are no longer social events. They''re commerce. Lamenting their demise is fruitless since they''re never going to return to the old-fashioned, neighborly gathering Proffitt describes. His conclusions, based on highly dubious premises, just don''t hold up under scrutiny. If local auctioneers don''t change their world view and their business model, they''ll join the buggy whip maker as an interesting, but sad, relic of an earlier time. |