Chapter 1 An overview of the development of cultural and artwork property rights exchanges
1.1 Concept of Cultural Exchange
The Cultural Property Rights Exchange (hereinafter referred to as "Cultural Exchange") is engaged in cultural property rights transactions and related investment and financing services, and promotes the cross-industry, cross-regional and cross-ownership flow of cultural industry elements. The innovative business engaged in by the Cultural Exchange is mainly the sharing of cultural artworks, that is, on the premise of strict identification, evaluation, custody and insurance procedures for cultural artworks, the issuance and listing of split, non-physical assets Art share contract.
This new trading model can not only solve various problems encountered in the integration and flow of cultural and artistic resources, but also a beneficial exploration of the price discovery mechanism of cultural and artistic works and the diversified development of the cultural and artistic market.
1.2 Source of property rights
Works of art are special commodities created by folks, and each piece has its own characteristics, so its artistic value or investment value is often difficult to determine. What kind of works of art should enter the property rights market is very important. The credibility of the property rights market determines that the property rights of works of art that can enter the market must be investment goods or high-end consumer goods that meet the characteristics of safety, profitability and liquidity.
The property rights market should cooperate with authoritative artists, mainly locking in the works of modern and deceased well-known artists. This kind of popularity is not the so-called folk popularity, but a mainstream evaluation from a professional and academic perspective. This is a necessary means to lead the direction of social investment and artistic creation, and it is also a necessary condition for the capital market to support the cultural industry. Otherwise, it will not only Misleading artistic creation, increasing investment risks, and the art property rights trading market deviates from the direction.
1.3 Development overview
In 2007, Shanghai, Shenzhen and other places proposed to build a "cultural property rights exchange", and the prototype of the cultural exchange first appeared at the "Best Business Model China Summit" in 2008. Deputy director of the Institute of Industry and Culture of Peking University Chang Peng Zhongtian put forward an innovative business model of art property rights division investment.
In March 2008, at the First Session of the Eleventh National Committee of the Chinese People's Political Consultative Conference, there was a proposal to put forward "Suggestions on the Establishment of Beijing Cultural Art Exchange". It is more open and transparent, which is conducive to the return and protection of cultural relics and artworks. The cultural art exchange can provide investors with more convenient investment conditions and activate the art market. To a certain extent, the establishment of the cultural art exchange can make more capital flow to the field of culture and art, and relieve the pressure on the stock market and real estate market. After that, all parts of the country heard the news, especially in cities with active cultural and art markets, they were planning to establish cultural and art exchanges.
On June 15, 2009, the state piloted the establishment of the Shanghai Cultural Property Exchange, and then established the Shenzhen Cultural Property Exchange in November 2009. The establishment of two national cultural exchange pilot units opened up the domestic cultural exchange boom. curtain. On September 17 of the same year, Tianjin Cultural Exchange was established. As of December 2015, there were more than 80 cultural exchanges across the country, half of which are still in operation, and most of them claim that their function is to become a platform for the allocation of cultural resources.
Generally speaking, except for a few cultural exchanges whose art share transactions have not yet been dealt with, most cultural exchanges are seeking a way out under policies and regulations. Many cultural exchanges have avoided the previously controversial art share trading method, actively deal with the remaining problems, find new ways, and carry out other business, with a cautious pace and long-term focus, trying to open up the development of cultural exchanges.
1.4 Artwork Trading Market Positioning
Once art is proposed as a transaction product in the property rights market, it means that art property rights are positioned as investment goods or capital goods, and as an investment product, it should meet three characteristics, namely, the characteristics of safety, profitability and liquidity.
Security means that the value of the investment product is high and will not depreciate easily, but it will be quite difficult for investors to judge the value of property rights; profitability means that the investment product has time value, and only time value can increase Possibly, but investors are quite professional in grasping the relationship between supply and demand in the market; liquidity means that this investment product has a considerable market size and a relatively traditional investment group, but the transaction volume is closely related to the stage of social development and investment habits relation.
As the final consumption fashion of the social wealth class, art is also a high-end consumer product recognized by the society with cultural temperament. Due to the relative scarcity and high cultural value of artworks, the final purchase group must not be the general public. Therefore, the target customers of consumable and investable artworks can be locked in a relatively fixed group.
But not all high-end customers have the demand or ability to consume artworks (including appreciation ability and purchasing ability), so the larger buying group is actually only the investment group, and these investment groups, even ordinary people, if If you want to share the investment income of the property rights of works of art, you must use financial tools, otherwise the works of art will become objects appreciated by individual people, and their intrinsic value will be far from being tapped.
Therefore, the property rights market is the place where the property rights value of works of art is discovered. The property rights market creates financial tools to organically connect art investors and art consumers. The property rights market makes works of art property rights and products through trading rules. Only the property rights market can Bring together various professional institutions and professional services to provide the whole society with socially credible art property transactions.
Chapter 2 Operation Mode of Art Property Rights Exchange
2.1 Trading Rules
Take the Chinese cultural art property rights exchange as an example:
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The trading time is in accordance with the time of the East Eighth District where Hong Kong is located. The trading time is 9:15-9:25, 9:30-11:30, 13:30-15:30 from Monday to Friday, Hong Kong statutory holidays and trading The market is closed on the announced rest day.
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The exchange adopts the auction trading method, and 9:15 to 9:25 of each trading day is the opening call auction time; 9:30 to 11:30 and 13:30 to 15:30 are the continuous auction time. The transaction and settlement currency is Hong Kong Dollar (HKD). Trading mode T+0 system. The equity shares purchased are executed on the day of reversal trading. The same-day swing trading of equity shares refers to the equity shares bought by equity investors on the same day, which can be sold in whole or in part on the same day.
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The daily price limit for shares on the first day of non-listing is ±10%, and there is no price limit for the first day of listing.
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Trading Commission Investors who buy or sell equity shares shall pay transaction commissions to the exchange according to regulations.
2.2 Current status and problems
Judging from the current status of my country's cultural art collection market, the cultural art exchange has broad prospects for development. Judging from their development and operation models, most cultural exchanges have adopted a stock-style "share-based" trading operation model, which is the main means of profit by increasing the market liquidity of cultural artworks and charging certain handling fees.
However, this model is accompanied by great risks. There are difficult problems such as the withdrawal of artworks and excessive speculation, which often bring irreparable losses to investors. With the "Decision on Cleaning up and Rectifying Various Trading Places to Effectively Prevent Financial Risks" issued by the State Council in November 2011, this trading operation mode was terminated.
Secondly, the fervent trading of cultural art has led some contemporary calligraphers and painters to have a sense of speculation. They do not pay attention to the improvement of their calligraphy and painting skills, but blindly cater to the needs of the market and create calligraphy and painting. In a short period of time, their works have filled the entire market. , leading to the continuous reduction of the artistic value of their calligraphy and painting works.
In addition, the Cultural Exchange has overhyped some cultural and artistic works, overdrafting their future value growth, disrupting market pricing, damaging the reputation of relevant cultural artists, and causing a downturn in related industries. Therefore, to re-explore the scientific development and operation mode of the cultural exchange has become an urgent problem to be solved by the entire cultural exchange industry.
The rapid expansion of the transaction scale and the substantial increase in the number of participants in the cultural property rights trading market, as an emerging trading market, the low barriers to entry and the lack of strict regulatory policy constraints have led to the concentration of risks in the cultural property rights trading market. Now is the era of "Internet +", opportunities and challenges have always coexisted, as two sides of a coin, almost every traditional industry has the opportunity of "Internet +", and also faces the challenge of how to integrate more deeply with the Internet challenge.
As a trading platform that promotes the docking of culture, capital and market, cultural property rights exchange is also integrating with "Internet +" in this new era. The addition of Internet parameters not only reduces time costs, but also improves the circulation of funds and information efficiency. Taking the postage card electronic disk as an example, it allows anyone to simply invest in the postage card, so that cultural investment and collection are no longer superior, but walk to people's side in a more down-to-earth manner, for Investors are offered new financial options.
2.3 Development prospects
Taking my country's postal currency card market as an example, it has been developed for decades. From the street, the physical market to the Internet, and the infiltration of today's cultural exchanges, every historical stage is telling the evolution of the postal market. The past three major price rises, as well as the intermittent mid-level rebounds in the past ten years, hype hot market, more or less left an unforgettable imprint on the participants. , the market is still rotating according to its own trajectory, until the Cultural Exchange set its sights on postal currency cards.
In fact, it is inevitable for the Wenxue to get involved in postal currency cards in the development process of China's postal market. In this historic leap of the postal market, the Wenxue, a new thing, has penetrated into it. Although it is still in its initial stage, it is also surging in the market. There was quite a disturbance. Regarding the future development of the cultural exchange industry, many experts believe that the key lies in the innovative operation of the cultural exchange itself and the national policy guarantee and supervision.
Judging from the current development of the Cultural Exchange, if the Cultural Exchange wants to innovate and operate, it depends partly on the development process of the art financial platform. It is a compulsory course for the Cultural Exchange to provide corresponding financial support for art transactions. Explore new experiences and models , methods, in the development and growth of art finance, we can make ourselves continue to develop and grow.
Finally, paying attention to the cultivation and establishment of risk awareness is also one of the keys for the Cultural Exchange to obtain future development space, which is inseparable from the relevant risk control framework and regulatory system set by the state.
2.4 Transaction status
The 2019-2021 annual data of China International Cultural Property Rights Exchange as an example:
It can be seen from the figure that the number of annual listings and the total number of listed varieties in the three years from 2019 to 2021 have continued to grow, indicating that the demand for cultural and artwork markets has continued to increase.
It can be seen from the figure that the total value of collections in 2019-2021 is relatively stable, with a slight increase. In the second year, the transaction amount increased significantly, and was far greater than the total value of the collection market. With the increase of the annual transaction amount, the annual average daily transaction amount continues to rise, and the highest and lowest transaction amounts both rise accordingly. This series shows that the popularity of the cultural art market is constantly increasing, and consumers are willing to pay more for it. Land money, and there is a trend to continue to rise.
Figure China International Cultural Art Exchange Market Overview (2022.7)
(The picture shows the 2022.7 China International Cultural Art Exchange Market Overview)
Chapter 3 The meaning and application of NFT digital collections
3.1 The concept of NFT digital collections
Digital collection, which is the familiar name of NFT in China, is an application form of NFT. At present, the digital collection, NFT, and NFR mentioned on the Internet are all a way of calling digital collections.
NFT, the abbreviation of Non-Fungible Token, stands for non-homogeneous tokens and is a unique digital asset (art, music or game assets). The so-called non-homogeneous tokens are irreplaceable tokens, which record unique information in smart contracts. After being authenticated on the blockchain, each NFT is unique. NFT uses blockchain technology to mark the property rights of documents in the Internet. It is a product of web3.0 and is considered to be an important infrastructure for the future Metaverse. It is generally based on the public chain and can be traded in the secondary market.
To put it simply, NFT is like an ID card for digital assets. It can point to any content such as digital art, games, domain names, tickets, etc., making it a digital asset that can be permanently owned, preserved, and traced. The earliest NFT concept can be traced back to the 1990s, but limited by the technical conditions at that time, NFT only stayed at the conceptual stage. After a long period of exploration, in 2017, Larva Labs released the first real NFT project on the Ethereum public chain - Crypto Punks, which officially opened the era of using digital pictures as encrypted assets.
Currently, the most famous trading platform is OpenSea, and the most popular NFT projects include Bored Ape Yacht Club and Phanta Bear. In 2021, the global NFT market will usher in a big explosion, and in China, many hot platforms will also be born. Unlike foreign markets that are closely related to virtual currencies, since my country has a prohibitive attitude towards virtual currencies, domestic digital collections and virtual currencies have completely drawn a clear line.
3.2 Main forms of digital collections
At present, digital collections have become a hot spot in the industry, with rich categories, including but not limited to digital pictures, music, videos, 3D models, electronic tickets, digital souvenirs and other forms.
Music, tickets, fashion games, cards, paintings, photographs, GIF animations, emoticons, etc. can all be used as digital collections. Different digital collections have different ways of playing, for example, music can be listened to songs, tickets for entry and exit passes, paintings for long-term preservation and appreciation, etc.
3.3 Significance
(1) Capitalization of digital content. Under the current Internet, we only have the right to use digital content, and cannot really make digital content our property. The emergence of digital collections (NFT) has broadened the boundaries of digital assets. Digital assets no longer only refer to digital currencies. Any unique asset can be cast into digital collections (NFT), whether it is physical assets or various Digital content, such as pictures, audio and video, game props, etc., which improves the tradability of digital content.
(2) Relying on blockchain technology to ensure the uniqueness, authenticity and permanence of assets, and effectively solve the problem of right confirmation. This has three advantages:
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Decentralized storage ensures the permanent existence of assets and will not disappear when the centralized platform stops operating;
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Provides new ideas for intellectual property protection;
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Improve the efficiency of asset transactions and reduce transaction costs (such as the identification cost of the authenticity of collectibles), enhance the liquidity of assets, and attract more buyers of digital assets to conduct transactions.
(3) The decentralized trading model improves the commercial status of content creators to a certain extent and reduces the commission share of centralized platforms. Through the smart contract embedded in the digital collection (NFT), creators can obtain continuous royalties from subsequent transfers.
3.4 Application
On July 13, 2022, the General Office of the Shanghai Municipal People's Government issued the "Shanghai Digital Economy Development "14th Five-Year Plan"", proposing that Shanghai will support leading companies to explore the construction of NFT trading platforms during the 14th Five-Year Plan period, and research and promote NFT and other assets Digitization, digital IP global circulation, digital rights confirmation and protection and other related business forms are first tried in Shanghai.
In addition to Shanghai, cultural exchanges in many places are also exploring whether the transaction of digital collections can be included in the business scope of cultural exchanges to realize the compliance of digital collection transactions. From January to June this year, the domestic digital collection market experienced a roller coaster of dramatic changes, which also created huge opportunities to get rich. A series of new gameplays such as priority purchase and PFP are gradually derived, and some artists are trying to combine domestic digital collections with overseas NFTs. Platforms, publishers, and IP parties are constantly iterating.
Chapter 4 my country’s Main Cultural and Artwork Property Rights Exchanges
So far, there are six approved by the state: Shenzhen Cultural Property Exchange, Nanjing Cultural and Art Property Exchange, Southern Cultural Property Exchange, Tianjin Cultural Exchange, Shanghai Cultural Property Exchange, and Beijing Cultural Property Exchange.
On December 30, 2011, five ministries including the Central Propaganda Department, the Ministry of Commerce, and the Ministry of Culture jointly issued the "Opinions on Implementing the State Council's Decision to Strengthen the Management of Cultural Property Rights Transactions and Artwork Transactions" (Zhongxuanfa [2011] No. 49), It is clearly stated that "the state will focus on supporting the establishment of cultural property rights exchanges in Shanghai and Shenzhen, two cities with mature capital markets and a good foundation for property rights transactions."
(1) Shanghai Cultural Property Rights Exchange
On June 15, 2009, Shanghai Cultural Property Rights Exchange, jointly invested by Shanghai United Property Rights Exchange, Jiefang Daily Newspaper Group, and Shanghai Jingwen Investment Company, was officially inaugurated in Shanghai Waigaoqiao Free Trade Zone, becoming a domestic The first established cultural property rights exchange, Shanghai Cultural Property Rights Exchange was jointly invested and established by Shanghai United Property Rights Exchange, Jiefang Daily Newspaper Group, and Shanghai Jingwen Investment Company.
(2) Shenzhen Cultural Property Rights Exchange
The Shenzhen Cultural Property Rights Exchange was officially listed in November 2009. With the business philosophy of "connecting culture with capital and creating value through transactions", it is closely integrated and deeply interacted with the China (Shenzhen) International Cultural Industry Expo and Fair. It is a national and global exchange. Cultural property rights trading platform, cultural industry investment and financing platform, cultural business incubation platform and cultural property rights registration and custody platform.
(3) Nanjing Culture and Art Property Rights Exchange
Nanjing Cultural and Art Property Rights Exchange cooperates with institutions such as trust, insurance, banking, leasing, guarantee and funds to jointly design a more advanced cultural and artistic property rights transaction model.
(4) Tianjin Cultural Exchange
Tianjin Cultural Property Rights Exchange is a comprehensive cultural property rights transaction service organization approved by the Tianjin Municipal People's Government. Text Exchange".
(5) Beijing Cultural Property Rights Exchange Center
Beijing Cultural Property Rights Trading Center was established by Beijing Cultural Investment and Development Group, China Cultural Industry Development Group, etc., with the business philosophy of "connecting culture with finance and enhancing value through transactions". A comprehensive cultural property rights trading platform.
(6) Southern Cultural Property Exchange
Nanfang Cultural Property Rights Exchange is a comprehensive cultural property rights trading service agency approved by the Guangdong Provincial Party Committee and the Provincial Government. Provincial Publishing Group and Guangdong Zhongkai Culture Media Co., Ltd. jointly invested and established, striving to build the largest and most influential cultural copyright industry cluster and demonstration base in the country. Cultural industry equity capital market.
Cover Photo by Jay on Unsplash