Art & income, the finance of art

This week has seen the demise of Aslice gaat stoppen. Aslice  was all about creating a more equal pay for musicians, for a fairer distribution of the revenue from music. Via a community driven structure.

There is a very big discrepancy between the income made by the artists who make the music (producers) and the people making a living out of playing the music (Dj’s). It’s not a coincidence you need to be a DJ/Producer nowadays to generate any income from making music.

The idea was pretty simple, Dj’s send in their playlists and from those lists the producers of the music get a paid an amount for each time a track is played. This means the Dj will make a little bit less, but the producer gets a change to have an income out of their music.

Not all Dj’s are big earners, and many struggle to get a decent wage out of it. You can still read everything there is to know about Aslice and their system om the website. But this brings up a bigger question there is in the arts in general, not just music, but writers, sculptors and painters and so on. All these people have trouble living of just their art. And have all sorts of jobs on the side.

Aslice & the importance of community

The biggest problem (in retrospect) for Aslice was the absence of a lot of Dj’s and mainly the bigger names and highest paid people in the industry. The problem with those people not signing up is that you miss a lot of revenue which should go back to the producers. But also in the lower echelons of the income pyramid it missed the volume to really make a breakthrough.

But why is a more equal distribution important? Everyone can go for their own succes by working on their own channels for revenue? Yes, these are options. The only problem is by doing this individually you can never reach all the corners of the eco system. You simply don’t know if someone is playing your music if they don’t tell you. Instead of being able to let the music work for you after you released it, by letting others play it (in other words sell it), you have to go out there and do this all by yourself. By playing the music yourself or do other activities to sell yourself.

The problem being, there is a limit to what the individual can produce as output.  There is a limited amount of time, and energy one can produce. And as a musician this isn’t your job, your job is to make new music. The Aslice system provided a way for musicians to generate income from music when other people went on and did their thing with it. I.e do their job. Making music is not a hobby, as an artist you have to be able to generate income from your music. And not just when you are at the top of the pyramid. Aslice provided a revenue stream without the artists having to put in time to generate it. Passive income.

An eco system can’t function if only a small minority profits at the expense of the work of all the others in the eco system (otherwise known as a community). This inevitably  leads to a hollowing out of that system. Artists drop out and no new ones can join. And some point the eco system collapses and a barren land is what is left. You can’t participate if you can’t live from an eco system. It’s that simple.
You can’t reach your full potential if you can’t work on your greatest skill, and have to to all sorts of side hustles to keep afloat.

Individuality & the illusion of succes

This is a problem in the whole of society, in the last 30 years or so this has become the main issue. The belief succes of the individual is solely the outcome of choices and changes that individual has made and taken. Throughout society the illusion that succes is a choice. Whatever is going on outside the circle of influence and the outside world. Just work ‘hard enough’ and seize ‘opportunities’ and you will reap the rewards.

This is only partly true, you can only be as successful as your environment is. Maybe a small percentage can fight their way out of a position of disadvantage, but the first thing they do is leave the place where opportunities are slim.

Succes, for the most part, is the outcome of great communities and solid infrastructures. You simply can’t do everything on your own. A society can’t function without education, health care, affordable living, access to food and so on. These things form the foundation for the individuals to thrive, the access to this infrastructure needs to be organized in such a way, that the majority of participants in these communities have acces to it and be able to use it.

You will have to work on, maintain and build these infrastructures before you can become successful as an individual. Every member needs to make a small contribution to this infrastructure and help others to become successful in order to stay successful themselves. The most well known way to organize this is paying taxes. It’s that simple.

The arts and the revenue model

The world of arts has been plagued by declining in funding the last few decades. All emphasis was placed on building your own revenue models. A lot of subsidies which maintained a lot of the infrastructures, think public venues, studios, art centers and educational systems have been minimized or downright cut all together. Which implicitly meant the art community had to fend for itself. A fairer distribution of the revenue generated with the art becomes crucial.

By subsidizing important parts of the eco system, the money involved becomes almost invisible. People pay taxes for all sorts of things and don’t think about what is funded with the money. This makes a lot of people even wary of paying them. Most people can only think about the stuff they don’t want funded by taxes.  That’s why the democratic process is important. But that’s another matter altogether, the simple fact is, the lack of togetherness, which has crept in, in the vast majority of society is also very prevalent in the art world. It wasn’t easy making a living from arts before and it certainly isn’t now. The community in the arts world has vanished.

The revenue stream, and the value broader society has for arts & culture has declined. And therefore the system fails for individual artists to make a living. The revenue model has shifted towards the individual, it’s not the art that needs selling, it’s the individual. Things like the 1000 follower principle, where 1000 people pay 1000 dollars a year and generate an income that way solely hinges on the individual to be able to generate art (or mostly content).

This immediately comes to an halt when that individual has a calamity and can’t make any more music (or content) and the revenue streams stops. There are no safety nets within the system. The most hearth-wrenching examples are the Gofundme pages where artists seek help in paying for cost of living and medical bills ones they fall ill. Nevermind paying for their recovery. Passive revenue from songs played is an absolute necessity.

There is a massive limit in earning power of an individual, this is true for everyone, but especially artists, where art needs to be sold, in this case music played before any revenue is generated. For musicians music played needs to be a valid stream of income. But they can’t live off albums alone anymore. And this is a big risk, it takes a lot of time working on an album and the only way to pay for this time is by the music being played when the music goes out into the world.

Once it’s out there, a lot of the revenue sticks to the top of the pyramid. The balance within the revenue stream is off. A fairer distribution is why a platform such as Aslice is important.

Community back on the agenda

Technology enables us to quickly build a solution which when carried by a large part of the community can restore the balance in revenue pretty quickly. So everyone can carve out their piece of the pie and keep going, and add too the community and eco system. We just need to instill a realization that everyone has their fair value within the eco system. Not just a shout out on social media, but a simple small amount whenever you use a track someone has made. These are not big numbers, it’s about volume.

Technology can help us work out the distribution, the how of the equation. But for things to truly happen we need the majority of the community involved. This can only be reached if we put the topic of the community back on the agenda. Within industry gatherings we not only need to talk about the branding of the artist on an individual level, but talk about a healthy eco system and community as well. How we build, maintain and develop the eco system and subsequently the community.

And not just about the fun stuff, like making music together, collabs with instrument builders and so on, but be frank about the numbers, the accounting behind it all. The “boring” bits. The risks of being a one person company as most artists are. And the risks involved when you do not get paid enough for your work. The bullet points below are just a few of the risks.

      • Insufficient income for health insurance.
      • Insufficient income  for periods with less gigs, or to buy insurance against income drops.
      • Insufficient income for building up a pension.
      • Insufficient income for insurance against disability.

And these are just the individual risks, some risks for the eco system

      • No new or improved venues for younger talent to work and perform
      • No real networks are maintained as everyone is to busy making ends meet.
      • No synergy and scale advantages that a healthy eco system provides for growth and future proofing of the eco system.

It’s not just about money

A community has a lot advantages for people who are part of such an eco system. You can grow your craft a lot faster you can focus on your skillset and not worry too much about other things. Everyone can learn and feed off each other and grow organically. Being part of a community is essential. For these systems to be able to flourish everyone has to contribute some of there time and energy towards that community. In a society this is done via taxes, we then pay other people with other skills to run the eco system. Now the world of arts need to do this themselves. The ‘invisible’ part in the form of subsidies is no longer there. The creative community might have gotten used to this too much, who knows. But in the current political and economical landscape you can’t count on this anymore. The creative community needs to organize this themselves. We need to make sure the eco system is healthy.

The most important thing for people to be able to contribute is that the revenue is divided fairly among the participants, so we can all work on the pillars of the system, such as education, safe spaces to work and crate, get together and interact. So everyone can work on their craft and be able to excel as much as possible and cover the basic risks.

Aslice had a great model to achieve just that. For everyone to be able to make a decent living and thus can dedicate some of their every to build a community in which everyone can work and make a living of their art.

For society as a whole this is very important, as art pays a big part in letting people be able to think critically and provide safe places for people in oppression. As a society we simply can’t progress without art. That’s why the art community has to take a hard look in the mirror and realize the need to work on the eco system and community as absolutely essential.

 

A side project, The Creditcard Hedgefund

I like finance and learning about it, used to write about this topic here as well. I was thinking about getting back into the topic when I stumbled upon substack. Which is a platform for writers. I thought I might try this out and start a little experiment.

My real long term investment plan is really simple, buy an index fund and hold it. The main goal for my investment is to work on my pension. Long term boring stuff, which to my mind is a good thing.

On the other hand, a more active approach can ben fun as well, and very hard to do. As well as the fact most people with an active approach lose money or underperform a simple index fund.

But I am going to test this myself with paper short term (day)trading. And to give Substack a go I set it up there.

Researching the topic of day trading this reddit came up, and made a lot of sense. So I took this as a starting point for my own adventures.

Keep in mind that nothing on here or on my Substack should be taken as investment advice, please do your own research and due diligence, or consult a professional.

With this warning out of the way, I will outline the idea. The credit card hedgefund is an experiment to see if I can make a profit while actively trading my portfolio. The name comes from the budget I set myself to start out with, my credit card limit of € 3500.

It’s all done on paper, no real trades or real money is at stake. I might do that later on or try other strategies but time will tell.

I need to trade 3 months and make 100 trades and be profitable. There are some more specifications, but read all about it on my Substack.

Book review – Good economics for hard times

This is one of those books I am not going to indulge in giving away some parts or examples of the books greatness. So no subjects , conclusions of problems discussed in the book. Not doing it. Which makes this a bit hard. Here I go.

What I am saying is anyone with just a slight interest in the reasons for the current state of the world should absolutely read this book. Especially if you have some affinity with economics. But the good news is, it’s not about economics. It’s about assumptions , which we all know are…. , anyway these assumptions have been drafted into policy. And these policies have inflicted permanent damage and made the problems they were designed too solve much worse.

The book touches on most of the main problems of our time , and all is explained in a clear and very understandable way. Without cutting corners in it’s due diligence.

It’s pretty remarkable how long some of these assumptions on social structures, money, taxes , income , human values have come back over a long period of time. While most of these assumptions were proven to be wrong or have changed over time. Nevertheless most measures to counter the problems have been intensified because there is nog change in our assumptions. Which made the problems even worse , and a downward spiral. Nobody thought about checking if what we were doing was in fact pointless.

Maybe I am being a bit cryptic in my review of this book. But hopefully you get some direction on what the book is about.

And forget what I said about it being interesting for people which want to know about why we are in a world we are in. This book should be mandatory for everyone. It should be mandatory in all schools , universities what have you.

It teaches a very valuable lesson , a problem can never be solved with just one field of expertise, not even when it’s the dominant field. It’s very much a necessity to counter our current problems with multidisciplinair teams , creativity and looking at the problem from different perspectives.

We can only solve our problems together, no-one can do it alone.

Book review – More money than god

I read quite a bit again, which helps my brain a lot. And I have always found it relaxing. I mostly read biography’s , history and finance books. And the odd novel. And some tech books , which I won’t bore you with. I recently finished reading more money than god , by Sebastian Mallaby , a book combining history and finance in one go. Two of my favorite subjects. Plus it tells the stories of all the people involved , 3 boxes ticked.

It’s not a dry book with just names dates and numbers, it’s written with stories anecdotes and the numbers just fit in naturally. 

It’s about the history and evolving world of hedgefunds. For those who don’t know hedgefunds are private investment funds which in the classical term make bets on markets, and make use of diverse array of instruments in order to gain a edge in the market of choice. In the classical sense a hedge funds was always hedged against the risk they take. Neutral in a way, as far as their models go anyway. But that changed over time , and most just looked for edges in markets.

This book starts out with the first hedgefunds and goes until recent times just after the credit crunch in 2007/2008. What’s interesting it not just covered the most famous hedge funds and their bets like Soros versus the pound. But also lesser known stuff like the takeover of an Indonesian bank by a hedge fund.

Without giving away alle the stories the book tells the tales and sets out to give some insight in why hedgefunds are good for markets instead of the more common view that all hedgefunds are evil. It makes a good point. It’s also very dense and took me a while before finishing it. It’s a good for anyone interested in finance or the world of finance in general, the more numbers inclined among us will also be catered too and even the casual reader with more of a history interest will be having fun while reading it. 

It’s one of the best books on the history of hedgefunds in general and has a lot of interesting tales to tell. Make sure to put it on your reading list. 

November 2019 – Dividend

11 months in 2019 dividend wise, so another update is due. Not an extraordinary one but slow and steady is the name of the dividend growing game. November always is a month with just a few dividend paying company’s. At least in my portfolio it is. And this time it’s no different. Just a few but still a nice bump if you look at last year. Passive income is simply fun to watch. So here are the November numbers !

DateStockCurrencyAmount
15-11-2019ASMLEUR10,50
14-11-2019Apple EUR10,31
12-11-2019ASMIEUR30,00
TotalEUR50,81

October 2019 – Dividend

October again, and it’s time for my monthly dividend statement. Yet again a steady growth. It’s considering the current interest rate climate all too easy to praise dividends.

But there is a but, the risk is significantly higher. So always invest for the long term, at least with a 20 year horizon. And with money you absolutely don’t need for the foreseeable future. Don’t chase the next hot thing. Make a plan, and stick to it consistently. And let time do its job.

Maybe these warnings albeit a repetition are still worth mentioning. A lot of people talk very casually about investing as if they are as secure as an ‘old fashioned’ savings account. Well they are not. Be sure too understand the basics of finance, money and time before doing anything. Read a few books on money and finance in general. And then start reading up on investing. And make sure you read even more on risk. Not just financial risk, but risk in general. There are numerous non financial risks in your life which will impact you personally and financially. Such as job and income loss, divorce , illness. Read about how to cover those risks. Life is 90% other stuff rather than money. Albeit a lot of people feel otherwise. Think about what you want in life first and foremost. Think hard. And then make a plan on how to get there.

Well after this short intermezzo, it’s numbers time.

DateStockCurrencyAmount
23-10-2019Cisco systemsEUR8,83
16-10-2019W.P. Carey EUR9,33
09-10-2019Vanguard FTSE All-world UCITS ETFEUR101,18
01-10-2019Coca ColaEUR5,41
01-10-2019NikeEUR1,98
TotalEUR126,73

Option trade diary #6 – Ahold Delhaize

Well time for another option strategy, a pretty simple one and this time the example is based around Dutch supermarket giant Ahold Delhaize. One of my favorite stocks with a nice dividend. It’s a stock with not much in the way of volatility. Which means writing calls and puts is the way for me. As I always have a position in Ahold I can simply write call options on the shares I own and write put options at the price I bought them for in the past. Which mostly results in getting the premium.

Worst case scenario is I have to deliver the shares which I own against a tidy profit or I can add a few shares with a bit of a discount. I do this with option expiration dates between 1 and 3 months. So short term positions. As this is a bit riskier as opposed to maintaining longer timeframes make sure you cover your written calls.

Which ensures you can deliver the number of shares you sold call options for when you get assigned, or have enough cash at hand to buy them when your put options get assigned. This way you will not be in for a nasty surprise when things don’t go your way.

There is always the possibility of rolling the options on towards future dates. Which is perfectly Ok but is a bit more maintenance and more risk. You buy the option back, and sell another option with the same strike price a few months down the line. And wait for more profitable times. Especially with written calls the losses can mount as in theory the share price of the stock can rise indefinitely.

So in this case I keep it simple and have all outcomes covered. It’s just easier and I don’t have to think about it.

This strategy can be very useful in sideways markets or slight downturns, making a few extra bucks on the side. Mind the volatility of a stock, as this can greatly enhance the intermediate risk of these positions.

Until next time , have fun and as always do your own research before buying or selling anything.

September 2019 Dividend

Another month in the dust, thus time for a dividend update. This month there are a few new dividends paying out due to the growth of the protfolio. Also a few, one bank and two insurers, which are a bit of a coincidence , as I bought the shares for option construction purposes and was expecting having nonen of them at the time they were handing out the dividends. Nonetheless it’s here and I am clouting it. A bit of luck really.

Its yet again a nice improvement from last year, although a bit skewed with the Dow Dupont merger and split process and the dividend by accident with the bank and insurers. It’s good to have a growth and progress in the portfolio. It keeps one motivated !

See you all next month.

The numbers:

DateStockCurrencyAmount
28-09-2019Vanguard dividend appreciation fundEUR1,51
20-09-2019AegonEUR15,00
16-09-2019Corteva IncEUR0,35
16-09-2019DowDuPont INCEUR0,82
14-09-2019Dow INCEUR1,91
12-09-2019MicrosoftEUR8,36
11-09-2019NN GroupEUR76,00
11-09-2019UnileverEUR8,21
06-09-2019ASREUR70,00
02-09-2019ABN AmroEUR60,00
TotalEUR242,16

August 2019 Dividend

It’s been a while. Writing articles got a backseat to real life. So I am a bit behind. But we’re back. With August and the monthly dividend report. It’s the usual really. An increase in dividend income comparing the numbers with last year. And not surprisingly because of the fact I am still building the portfolio.

Another reminder of how important it is to be consistent and dedicated, it works. It’s better too invest a small amount consistently , then larger amounts when you have money ‘left over’.

Another fact of life, the world is still in turmoil. Brexit, nationalism, trade wars , oil you name it, it’s happening. Just the day to day madness really. Just keep building that portfolio and stay calm. One step at a time upon the ladder of investing.

Ok enough talking, it’s numbers time :

DateStockCurrencyAmount
02-08-2019Amsterdam CommoditiesEUR24,00
12-08-2019NSIEUR12,48
12-08-2019INGEUR24,00
15-08-2019AMGEUR20,00
15-08-2019AppleEUR10,40
29-08-2019AholdEUR30,00
TotalEUR120,88

Option trade diary #5 – Advanced metallurgical group

This one is not for the faint of harted , today in my option diary series , Advanced metallurgical group. Which in a very short description makes difficult products out of precious metals. With emphasis on difficult, and precious.

It’s a very hard and volatile market on any given day, it’s a highly cyclical business and it’s always at the forefront of any wrinkle in the market. But it’s a nice stock to own just because the stuff it produces is only getting harder to come by and it’s something which will be more expensive in the future , and since were here for the long run , this is worth a bit of a gamble. So I sold two put options.

These are the options I sold :

AMG Put 14.00 20 December 2019, for 50 Euro’s
AMG Put 18.00 20 March 2020 , for 175 Euro’s

As you can see, these were sold right before a dip in the market due to tweeting presidents and the like. So my timing was a bit off. So this case shows this stock can fluctuate a bit , I told you so. Target is 50% or less before I buy them back. See you next time !