Can Digital Art Make Money?

It would be easy to make the mistake of defining new media art as an entirely different beast from "old media" formats like painting and sculpture. After all, digital file-based works are, in their basic state, infinitely replicable, able to be seen by any audience on earth at any time, and without any physical form. But what's so intriguing about the burgeoning field of new media art is that it challenges the status quo of traditional artistic media, while at the same time adopting some of the same norms to become viable in the contemporary art market. The demand and collector base for new media art is small as of yet, but artists still must find ways to both control the dissemination of their work and make it saleable. But the paradox of new media art remains — how is it possible to sell something that it is impossible to own?
The strategies that are developing to monetize new media art are surprising mainly in their familiarity. Among them are creating an artificial scarcity for the files themselves, adopting a patronage system in which the collector is inextricably associated with the work, and turning the digital files into physical objects more immediately accessible to a traditional collector base.
A flash point in the commodification of new media art occurred earlier this year at one of New York's most recognizable venues for commercial art work — the Armory Fair. Lauren Cornell, director of new media-oriented online publication Rhizome, set up a booth selling digital work, as displayed on a 27-inch iMac screen. Hrag Vartanian, editor of art blog Hyperallergic, interviewed Cornell about the challenges of selling such non-traditional pieces of art (the full video of the interview can be seen here) [Full disclosure: I was until recently staff writer at Hyperallergic, and was present when Hrag first approached Cornell about the interview]. Pointing out Sara Ludy's "City Inverse" on the screen, Cornell notes that, "you can sell digital work in different ways but in Sara's case we're going to take it offline for the collector so they can just have it locally." This means that Ludy's GIF file would no longer be hosted live on the artist's Web site in an "official" capacity, and the collector would be able to possess the file on their own drive space, much like a painting going in to private hands. The work would be inaccessible — that is, if other artists, writers, and bloggers had not already re-published Ludy's file elsewhere, disrupting the possibility of true unique ownership. Ludy's work has already disseminated through the Internet, and is likely possessed locally (on home hard drives) by more than a few viewers.
Cornell's statement touched off a heated comment thread and dialogue on Hyperallergic and off. The reason for the controversy is that being "online" is often seen as integral to new media work. The question becomes, if a digital file is not live on the Internet, is it still a work of Internet art? Artists Jeremiah Johnson (Nullsleep) and No Carrier embarked on a new project in response to Cornell's statement. The mission of the resulting Web site, 0-DAY, is to keep works of Internet art online at any costs. With a lo-fi hacker aesthetic and a punchy attitude, the people behind 0-DAY are the free-data pirates of the new media world. 
Respected GIF artist and omnipresent Internet commentator Tom Moody wrote, "No director of a new media website should be promoting work in those terms." Ludy responded, "It was my decision to take the GIFs offline, not [Cornell's]." Taking a work wholly offline, or turning it into a consumable object editioned in a limited quantity, imposes a false scarcity on the art that works much like the limited edition of a photographic print would — a decreased supply leads to an increased demand. Other artists, however, are pursuing strategies that allow the work to remain online while it is still collected and owned by an individual.
Source http://www.artinfo.com/