Australian galleries are in an artful slump as the market fractures and art dealers struggle to adapt to the online space and changing audience behaviour, one of the country’s top critics says.

Susan McCulloch, a long-time art critic turned consultant and private curator, believes new shoots on the Australian gallery landscape indicate a “renewed faith” in the sector. But times remain tough for many, and galleries must do a better job adapting to a shifting, globalised market.

McCulloch was national art critic for The Australian, co-author and publisher of her father Alan McCulloch’s art bible Encyclopedia of Australian Art and is now a contributing writer for the Australian Financial Review and an academic at RMIT in Melbourne. For the last few years McCulloch has concentrated on her consultancy and three years ago turned the downstairs of her Mornington Peninsula property into a private gallery where she holds three to four exhibitions a year.

McCulloch has watched the “huge downturn” in the Australian art sector, dragged down by economic woes and retail declines. But she also believes art has suffered an identify crisis that it is only now grappling with.

“There’s a far greater blurring of what defines ‘art’,” she told Crikey‘s Daily Review. “YouTube, digital media, blogs, etc, and greater links between art and design encourage the concept that anyone can be an artist. Also, art’s becoming increasingly a lifestyle/leisure activity like cafes, wineries, etc. Public galleries encourage this and need to bring in a younger audience and art fairs, which do similar, are flourishing.

“The ways in which some galleries present themselves is also changing. The personality of the owner is often far more visible in commentary, blogs, etc, and opportunities are made for clients to interact with artists at social occasions. Economic necessity has also lead to some interesting gallery partnerships. Venues for seeing art are opening up — artists are opening their studios and houses for showings and home galleries such as ours are on the rise too. It’s a case of adapt or die.”

The decline in Australian art comes during a boom overseas. The local scene, according to McCulloch, lacks the same buzz — too far away and too “insular” to capitalise.

“Internationally the wealth is just enormous and there are whole new levels of it with fresh wealthy and super-wealthy buyers from Asia, the Middle East and elsewhere,” she said. “Europe, the UK and the US also have a far more integrally established cultural base that blossoms once the economy improves even slightly. Then there’s the constant search for the new, hottest art place. There’s a kind of fervour about this. China, London, Paris, Berlin have all been hailed as the contemporary art capitals of the world in the recent past. Now it’s Brazil’s turn and maybe Colombia’s next. Art fairs like Art Basel, Art Cologne, Art Basel Miami Beach etc all help create a buzz and position art as a ‘must-have’ commodity.”

The list of casualties on the domestic gallery scene are mounting, says McCulloch. As for the new spaces emerging, “how long they will last is anyone’s guess”.

“As some galleries are closing, or transforming themselves into project-based entities, new ones are opening … it does indicate a renewed faith,” McCulloch said. “Certainly, there’s a definite public eagerness to both explore art and buy it. However, more than ever galleries need to find new ways of showing and proactively marketing their artists and their work rather than waiting passively for clients to come to them. Those who crack this seem to be doing well.”

McCulloch’s new show — Summer Collectors Show 2014 — features 80 works from Aboriginal art centres around the country. Overseas, Australian art is not widely recognised or understood; poor reviews for the recent Australia exhibition at the Royal Academy in London haven’t helped the cause. “It certainly hasn’t encouraged the perception of Australia as one of the world’s fine or most interesting art countries and it’ll be hard to now work from a defensive base to overcome this,” McCulloch said.

“Our art and its market is largely still quite insular. Again, this doesn’t mean it’s not successful here — just that it’s still by and large a world unto itself. We need to be discovered as the next hottest art country … if only.”

*Read the full interview with Susan McCulloch at Daily Review