“Our financial issues are measured in billions”: How the Hermitage is entering the NFT art market

The Hermitage has brought out the first NFTs with images of artworks from its collection. The originals for the tokens were five paintings, with two NFTs being produced from each of them. One copy of each token will remain in the Hermitage; the other will be sold at auction through a crypto-currency exchange. Hermitage Director Mikhail Piotrovsky told Forbes Life why the Hermitage needs NFTs.

– Mikhail Borisovich, how does the Hermitage intend to earn money from the issue of NFT works from its collection?

– The Hermitage does not intend to earn money. Our financial issues are measured in billions. It’s not serious to resolve financial issues with the aid of tokens. We do not have any market expectations relating to the emission of NFTs. It is an element that is measured in money, but we are not doing it for the money. For the moment, we want to see what sort of reception this form gets. There are, thank goodness, a thousand legal obstructions to all these virtual trades and they cannot be overcome. There are no financial interests here. We don’t try to make money from everything. We have long-established arrangements for the upkeep of art.

The blockchain, new IT technologies have opened up a third phase in the history of art where neither craft, nor action is required. The main thing is possession.

But the Hermitage is a conservative museum that, in order to preserve its conservatism, should make use of all manner of new technologies and various amusements, so to speak. Those include the NFTs, “non-fungible tokens”, and also TikTok. We are producing tokens and have just now started on TikTok. That is one of the new spheres in which the Hermitage is trying out its capabilities.

– The artist Beeple, who had a work sold at Christie’s this spring for a record $69 million, announced that the NFT is a new chapter in the history of art. Do you agree with that?

– It is a new chapter in the history of the market, not in the history of art. We need to understand the difference between the market and art. They are bound together, and the market often helps in assessing quality, not just at a given moment, but we need to grasp that there is a big difference. In the history of art, they do not write the price on a label. On the market they do. That is the fundamental difference. There is no doubt that the prices put on contemporary works of art on the market bear no relation to art. That is a story of market forces that intrudes only slightly into the history of the arts. So, there is no new period here, although there is a new phase in the development of awareness.

What is art over the course of all this long time? Art was always perceived as a craft. The artist makes, he paints. He is a genius, inspired by God, but he has to know how to make something, to produce a result of his work. In this scheme of things, the master’s hand is very important. What percentage is by the master? How much did Rembrandt or Rubens apply his hand to works produced in his studio? That gives rise to discussions about authenticity. The next aspect comes in the 20th century, when the important thing became not the craftsmanship but the idea. Take the Black Square. It was conceived just once.

Take Duchamp’s Fountain. The idea has been expressed – the rest is mere reproduction. For example, present-day installations that are reproduced from instructions endlessly in all contemporary museums of contemporary art. They buy the idea, the copyright and get the instructions – that’s enough. The blockchain, new IT technologies have opened up a third phase in the history of art where neither craft, nor action is required. The main thing is possession. What is the point of these non-fungible tokens? That they are non-fungible, not able to be split. The blockchain provides a guarantee that you are the owner and no-one else. It is of absolutely no importance to you that reproductions of the painting are all around you and anyone can look at it. Evidently the important thing, though, is the actual sense of possession that is transitioning into an aesthetic quality. And how much that can be sold for is of no great significance. The main thing is the sense of possession. I think this is an important stage in the development of the relationship between the human being and money, the human being and an object. The very sense of an aesthetic of possession. That’s a topic for your magazine.

– Isn’t this a return to mediaeval conceptions, when only the rulers of the world could afford to live surrounded by art objects, to commission works from artists in accordance with their own tastes, while no-one else had enough money for art?

– Owing an NFT does not mean that the original does not get shown to anyone. On the contrary, with the aesthetic of possession, it makes no difference at all that the image bought for $90 million is everywhere – on screens, on posters, on postcards, in the Internet. And someone who possesses the right of ownership is not forbidding anyone from reproducing it. Those rules are laid down at the creation of the NFT, providing the opportunity of access to amazing things. That is the democratic way, That is the hierarchy. That has become especially evident now.

The broader the inclusiveness of our visitors, the more important it is to stress the beauty of the Hermitage’s exclusiveness

I never tire of repeating that the museum is a luxury. We should make it accessible to all, but each person should understand that in the museum they are coming into contact with something special. There is not simply a right, granted at birth, to kick open the doors of any museum. The Hermitage is an imperial museum, a palace to which everyone has entry. Yet it continues to be the imperial museum, in which the emperor and his circle forged Russia’s history. The Hermitage is not merely an art museum. It contains a large historical and cultural seam of world importance.

I believe that, on the contrary, NFTs, new IT technologies are means that stress the democratic nature, the accessibility of the luxury of visiting the Hermitage. They are being used so that the luxury itself continues to amaze people with the fact of its exclusivity. Now, the broader the inclusiveness of our visitors, the more important it is to stress the beauty of the Hermitage’s exclusiveness. At the moment – and in the future it will always be that way – considerably fewer people can get into the Hermitage than used to be the case. We will be permanently restricting the number of people that the Hermitage can accommodate. It will be increasingly difficult to get into the museum. Of course, everyone will get in all the same. Things will be organized in such a way that all who wish will be able to get in anyway. It won’t be so easy, though, no spur-of-the-moment entry. However, alongside the restriction of people’s physical presence, there will be an expansion of other digital opportunities for getting acquainted with the collections, with the palace. We will be constructing our experiments upon that.

Rembrandt has always been accessible to people, but at the same time you can have a little piece of your very own Rembrandt

– Isn’t there a conflict here between what the museum often advertises as the strongest impression – the opportunity to stop by, say, a Rembrandt and to enter into some sort of emotional contact with the original. Where, then, does the aesthetic attraction of tokenization lie? What makes the power of an NFT Rembrandt? And won’t that devalue the opportunity to see the original in person?

– Nothing will change. Rembrandt exists in an endless quantity of reproductions. What in point of fact is this non-fungible token? It is a good, unique reproduction. If we are not talking about works specially created for an NFT, then it’s a reproduction. A unique reproduction, made just the once. You might compare an NFT to an engraving that is printed a single time, after which the plate is destroyed. That does not prevent the print from being reproduced, existing and being accessible to people. Rembrandt has always been accessible to people, but at the same time you can have a little piece of your very own Rembrandt. The book played the same role at one time. You have a book about Rembrandt and then there is Rembrandt. You long at the book containing reproductions, but the one does not in any way replace the other.

Nowadays, sadly, no-one remembers how they bought a book, but back in our day it was hard to buy them. You remember each book, each illustrated album, when and how you bought a Rembrandt reproduction. The first experiment that we have conducted is called “Your token is kept in the Hermitage”. We took five paintings and made two reproductions of each. One token will be in the Hermitage, the other will go to auction. Each of them was signed by me on a particular day, at a particular moment. Now we shall see whether or not that arouses interest.

– What works are included in the first five tokens?

– We’ll be announcing that soon, This may take place in a couple of months. Right now, we are checking the platform. We have had a large number of proposals from various NFT platforms. We are experimenting with them all at the moment.

– At the start of July, the talk was of the Binance platform.

– I’m not naming any names. There are various platforms, various proposals.

– Why aren’t you working with the world-ranking auction houses? Both Sotheby’s and Christie’s have already acquired successful experience of selling both NFTs and material art for Bitcoin and Ethereum.

– It’s dangerous to get involved with auction houses. Journalists will go writing that we are selling paintings. That is why we need to do it somewhere where everything is perfectly clear and nothing can be confused. We know how a cryptotoken works? But what about how a platform works, how that world works? It’s interesting for us, because we have many other projects connected with cyberspace, not just with tokens.

– Is the Hermitage planning to buy contemporary NFT art?

– Not as yet, but in the autumn we will be holding an exhibition of NFT art. We will be showing some things produced specially for an NFT and also what NFT collectors buy. It will be very interesting sociologically to see who is collecting and what.

There are no cost-free visits to museums. They are paid from the museum’s pocket. If a museum is earning money, it can permit itself to let some people in free of charge.

– Will those non-fungible tokens that the Hermitage is creating be included?

– I should think so. We will begin with that, and then we’ll show that everything else is better than the Hermitage, or worse. We have another attractive story with NFTs – about using them to tell about restoration. When a painting is restored, its previous appearance is lost. It is possible to record the way a painting looked before restoration in the form of a token. And those tokens could theoretically be used for fund-raising, to crowd-fund restoration. People would buy a little piece of a painting before restoration and then receive that little piece after restoration. And it is kept only in the Hermitage and in the possession of the buyer. That little picture will never again be shown or sold to anyone else because it is needed for the restoration work. The owner of such a token would have something to be proud of. Especially as practice shows that people are more willing to make donations for a restoration than anything else. There could be all sorts of twists to this. The main thing is to give it a try.

– Mikhail Borisovich, you have often said that takings and visitor numbers cannot be the main criteria for assessing the work of a museum. Have you managed to obtain a reconsideration of that assessment? What other criteria does the Hermitage have now?

– We have managed. The pandemic helped us. The Ministry of Culture has set those indicators aside. And the main indicator now is entering items into the catalogue of the museum’s stocks and also into the catalogue of State Stocks. Figures for restoration. A good criterion for money that we are now finalizing – how many people a day a museum is able to let in free of charge. We try to explain to people that there are no cost-free visits to museums. There is no law that provides free-of-charge visits. They are paid from the museum’s pocket. If a museum is earning money, it can permit itself to let some people in free of charge. Then it has a social programme. That can be a criterion. Not how much you have earned and how much money you have, but rather what you managed to accomplish, what social programmes you are supporting financially. That is a fairly difficult matter.

Right now, there is discussion worldwide about what the criteria are for a museum’s success. To what extent – especially at the moment, when there is social engagement – is it possible to measure success objectively. All in all, it’s no easy matter and nothing can be determined by figures alone. I think that a time will come when those same tokens, after people have accumulated a lot of them, will get translated from digital to analogue, as they are doing with music now. Because analogue is still better. That’s a good business too – turning tokens into pictures. It would be interesting to hear the opinion of professionals engaged in venture business, what would be the proper criteria for success from society’s point of view. Not how many people and how much money came in, but, say, what sort of people, the social make-up. Just now, for example, this is not an indicator of quality, but for the first time for many years in the museum’s history 60% of the visitors are under the age of 35. That is unprecedented, except perhaps for young people’s museums of contemporary art. One of the explanations is that circumstances at the moment favour those who know how to use the Internet. After all, tickets are now being sold online. It’s an entirely different public.

– Will the museum be adapting to the interests of that public. Will you be changing the way pictures are hung so that it looks more youthful? Will you be carrying out a diversification of the collections as American museums are doing now so as to achieve, for example, a fairer gender distribution among the artists in the museum.

– Gender equality is something that we have always had. Of all the world’s major museums there are most women artists in the Hermitage. In Washington in 2003 we put on an exhibition of female artists together with the National Museum of Women in the Arts. It featured 49 works from our collection. such as the wonderful Angelica Kauffman. So, we do not need to carry out gender diversification, we already have it.

Now on the top floor of the Winter Palace we have opened two reserve galleries, what are called storerooms. One of them contains works by Angelica Kauffman. We have some fine things in the storerooms. It is a new way of presenting things – lots of paintings hanging close together. If you are familiar with the main collection, then go there. You will find the same artists, but with perhaps not quite so strong works. The repository exists for such intellectual activity, for the opportunity to compare and consider. That’s the kind of diversity we are doing.

We do not intend to build our work around the visitors’ demands. We do study our public and create our display in such a way that the public understands what we want to convey. Because our mission, above all, is the preservation of art. The public should understand why costumes are only exhibited once in five years, while works on paper are not displayed at all, or only on special occasions. Our mission is to tell people that differences are beautiful. That needs to be said in a variety of languages. And TikTok is a translation into one of the readily accessible languages. Gourmets have their own categories of exhibitions. We tend to put on exhibitions in salvoes, opening five or six at once. They speak in the different languages of generations X, Y, Z – whatever you like. We think about the delivery, not because we need to attract people and get money off them, but because it is important for us to have them understand what we want to say. If they understand, they will find it interesting, and they will come again and again.

– Are you going to introduce QR codes, for example, instead of labels?

– The labels will stay, but we will be introducing QR codes. In point of fact, though, that won’t make things easier, when each person is poking their phone. I think the best answer would be phone-base programs, apps where you can see everything. You would need to look for the number attached to a picture, the way it works with audio-guides. It’s best to have nothing on the painting at all, with all the captions on the phone. Then it won’t be a distraction. Because any label, number or QR code distracts. That is for the future, though, when we will be working on fresh applications, because the apps that were created in pre-COVID times are out of date.

After much interaction online between visitors and the museum, we need to take a different approach to the apps that work when someone is already in the museum. Now we are intensively discussing new apps, what fresh things should go into them and how those apps will help us to respond to the public’s requirements. Because when you purposefully examine the market, a survey will always give you the answer that you need, but when you can watch how people go around the museum, what they find interesting, what they look at, you get an idea not about the market, not about clients, but about people in general. And we address ourselves not to clients, but to people. We look for languages for interaction with different kinds of people. That is a good new form of work that provides us with completely fresh possibilities to interact with people.

The latest technologies and interaction with people show that it’s not all that important where an exhibit is. More important is its history and your sense of involvement with its history.

During the pandemic, it emerged that very many people know little about the Hermitage. There are far more like that than we expected. It turned out, for example, that there is a huge number of people who have never been to the Hermitage and a huge number who reckon they never will. Now, though, everything is changing. People are working online, and we need to take heed of that.

– American museums are planning to start selling off their collections so as to settle the debts they ran up during lockdown. What do you think? Will any Russian art be put up for sale, including the things that left the Hermitage in the 1920s and ’30s? Do you have any plans to return those things to the collection?

– Selling things from museums is the last move and a total disgrace. I gave lectures in America on many occasions explaining that it is a crime, and that a museum does not have the right to sell art. A museum is not a warehouse. A museum should pass its collections on to subsequent generations. Selling is a crime! I cited examples from our own Soviet history, when in order to gain a little money, they started to sell off collections and then couldn’t stop. The loss that was inflicted on the country, on the collections and on reputations was enormous! Nothing like that should ever be done!

Yet if they do sell, then probably we should buy. When I had an interview in Washington, I visited the National Gallery and there was a question about our items that ended up in their collections after the 1930s sales. And I said, “Of course, they cannot be got back, because the deal was lawful, but perhaps at some time you will become poor and we will grow rich, and then we will buy them.” That was a sad joke, but six years afterwards Victor Vekselberg bought Forbes’s collection of Fabergé imperial Easter eggs, and it came back to Russia. So, I do think that it is possible. I am aware of instances when collectors from here have bought items of ours from American museums.

Of course, the main items from the Hermitage are in such major museums as the National Gallery in Washington and the Metropolitan Museum in New York, and they would have to become very poor, and we would have to get very rich. The Hermitage does not have the financing to buy things back on its own. You know, though, there is one more thing: the latest technologies and interaction with people show that it’s not all that important where an exhibit is. More important is its history and your sense of involvement with its history. An item from the Hermitage hanging in Washington is ours nonetheless and that’s the truth. Raphael’s Alba Madonna is Italian, but she’s ours too. Everyone remembers that, and she remembers as well.