A pro of Damien Hirst's "Beautiful Inside My Head Forever" auction for the artist is that it cut out the middleman (dealer) which resulted in the artist receiving the entire profit instead of sharing it. In the art market in general this may inspire other artists to think about alternative ways of promoting and selling their art so that they may have more control over their work. The auction also made Hirst's art more widely available to patrons, which was positive for those who could not access it previously. In addition, the auction received huge media attention which increased visibility for the Hirst "brand" and could garner more widespread interest in and demand for his work.
There were also cons of the auction. While Hirst gains control of his art financially, he loses the control that dealers exert on the market by their careful placement and limiting of art so as to increase and preserve its value. This loss of control of the distribution of art can lead to the market being flooded with readily available art for a wide audience which can lessen the demand for and value of the work. In addition, an artist taking their work straight to auction could alienate dealers and make enemies of powerful people in the art market who could withdraw support from an artist.
Although the Hirst auction was successful, it does seem that he overexposed himself and his art. The graphs in the Art Market Monitor article clearly demonstrate a downturn in the demand for his work and the prices paid for it. Although some of this may have been caused by the coinciding market crash, I think much of it can be attributed to overexposure. There are a limited number of people in the world who can afford to buy such expensive art and once they have satisfied their desires for works by Hirst, who will be left to buy the art? While I would describe Hirst as a marketing genius rather than an artistic genius he may have made a marketing mistake with the auction. The value of Hirst's work previously was very much dependent on the careful control of supply. With patrons treating art as a commodity more than ever before, the value of art depends largely on its demand which is higher when less work is available.
While Hirst may have made a misstep with the auction, his brand seems to be have survived quite well. He currently has a worldwide exhibition of spot paintings, "Damien Hirst: The Complete Spot Paintings, 1986-2011" that is receiving, as usual, plenty of attention. While the auction may have negatively affected the value of his work, it does seem to have achieved wider visibility for the Hirst brand. Interestingly, at the upcoming contemporary art auctions at Sotheby's in February, more Hirst pieces are available at the day auction than the more prominent evening auction and the prices continue to be low. The one exception is a spot painting for the evening show that is estimated at $500,000 - $700,000; this is a modest increase from the 2009 lows shown in the graphs.
A review of Hirst's current "Complete Spot Paintings" exhibition:http://latimesblogs.latimes.com/culturemonster/2012/01/art-review-damien-hirst-at-gagosian-gallery.html
Damien Hirst and his "Golden Calf"