Last month, galleries showed a united front when backing the VIP Art Fair – the first online international contemporary art fair, and the brainchild of gallerist James Cohan and Jonas Almgreen, founder of Oneartworld.com. For one week from January 22, 2011 VIP Art Fair will provide a virtual art fair experience, including real-time interaction with dealers.

The move can be seen as a direct counter-attack to the success and increasing dominance of online auctions such as Christie’s LIVE™. The online channel now accounts for one-fifth of Christie’s sale registrants and registrations, and one-quarter of the company’s bidders. Internet-based auction house Saffronart, one of the early pioneers in the online auction space, has become the third largest auction house for Indian art, competing neck-and-neck with Christie’s and Sotheby’s. In the spring of 2008, Artnet.com launched its own online auction platform – with auction revenues tripling in the first half of 2010.

The competition to woo new art buyers and to improve the buying experience for existing clients is hotting up, and it has been evident for some time that galleries have fallen behind their auction rivals in the online space.

The early high-profile failures of Sotheby’s online Internet venture with Ebay and the collapse in 2002 of Eyestorm, an online-store specialising in art editions, did little to build confidence in the fledgling online art market. However, the days are gone when selling high quality fine art online was seen as a far-fetched and impractical idea. The notion of ‘must-see and must-touch’ is becoming less important in a fast accelerating jpeg culture. Most galleries today will close a sale purely on the basis of an image, combined with, of course, a relationship of trust. Auction houses, such as Saffronart have already done this for a decade.

So, what is the likely impact of the VIP Art Fair? Although the online concept of the VIP Art Fair may sound revolutionary – it’s not because of the technology. Despite online VIP Lounges, three-dimensional views, instant messaging, virtual backrooms and special tours – it’s hardly a winner against the testosterone-filled environment of competitive bidding offered by online art auctions. No, the revolutionary element is that major international galleries have for the first time come together to form what looks like the beginning of an online strategy to fend off the increasing popularity of online auctions.

It’s unlikely the online fair will be a instant commercial success for the galleries involved, however, it will for sure trigger a huge amount of interest and curiosity, particularly with heavy-weight galleries such as Gagosian, White Cube and David Zwirner endorsing the venture.

The VIP Art fair will also force existing art fairs such as Art Basel, Frieze, Armory, FIAC and others to re-think their own online strategy. This can only be a good thing, as all of them are far behind in terms of effectively using the web as a complimentary channel (both experiential and transactional) to their existing offline fairs.

All in all, recent development suggests that we could be in the early stage of an online revolution in the gallery and dealer market – a change that would help to restore some of the lost ground to the rapidly expanding online auction market.