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.

 

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. 

Rethinking the blog

Well I have been absent with blog posts for a while now. Last post was November 2019 and we are well underway in 2020 in the meantime.
So what’s up, well I have drifted a bit from what my original idea for the blog was. My personal interests in finance, music , running and art. The main idea was to write whenever I felt like it and keep it a bit diversified. I got caught up in the personal finance part of it all. Mainly because there are so many cool ideas and I tried incorporating all that in my blog.

Well that generated more posts but not a lot of interesting ones. So I am stopping all series, which don’t add to get people thinking about things and just state facts, like the dividend and portfolio updates. Lot’s of other people are doing a much better job on those topics than I do. It also means I don’t feel any pressure (totally self imposed offcourse) to keep a monthly schedule and post stuff for the sake of it.

It’s a bit of a re-focus if you will and a drive in writing more meaningful pieces than just following a format. Let’s see where it takes me.

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

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 !

July 2019 Dividend

A new month, a new dividend round. And another nice monthly revenue, which in most part because of the ever growing portfolio , not so much extreme dividend increases. Around 167% more. Seems steep but mostly because of the growing number of shares and ETF’s which pay out. Compounding interest at it’s finest. The 8th world wonder some say. Exactly as it was intended. A nice bit of passive income.

We live in strange times, as always maybe. But it’s rather strange indeed, geopolitics, environment and economical. The switch towards a more sustainable way of living which is upon us. Which has not yet been seen in any of the current driving numbers. It’s time we look at things in a different perspective. Calculate our production and profits not just in money and growth. Take into account things like health, impact on the environment and our surroundings, happiness and more of these kind of parameters. These should all be taken into account when calculation the gross national production of countries or the results of any company.

Unfortunately we are not there yet, until we are it’s all about the benjamins. Speaking of which , here are the July dividend numbers :

DateStockCurrencyAmount
25-07-2019Walt Disney CompanyEUR0,68
24-07-2019Cisco SystemsEUR8,83
16-07-2019W.P. Carey IncEUR9,32
11-07-2019Vanguard FTSE all world UCITS ETFEUR114,27
05-07-2019Unibail - WFDEUR16,41
02-07-2019Porsche automobil holdingEUR22,10
02-07-2019Nike IncEUR1,98
01-07-2019Coca ColaEUR5,41



TotalEUR173,59

Option trade diary #4 – Heineken

Another new position, this time Heineken. Also a bit different this time it’s a written call option instead of a put option. Which means I am bound too deliver the shares at the strike price up until the expiration date. There are two ways to go about this. Covered and uncovered , when you write a covered option this can be done when you have the shares in your possession. You expect the shareprice to stay more or less the same or go down and the option premium is a bit of an extra result on your stock position. You are covered by the fact you own the right amount of the stock. This can also work against you, when the share rises above the strike price effectively limiting your profits, which will be strike price plus option premium.

This is the easy way of covering, there are other ways , but those are for another post and another time.
Leaves us with the second variation, writing uncovered calls. Which means you don’t own the right amount of stock and you gamble om a downturn in the share price. Your potential loss is infinite as the share price can rise well above your strike price and when called upon too deliver , you will have too buy at market price.
You do have the option to buy the option back at any given time. So before you do anything be well aware of the risk and your risk appetite.

That’s the theory behind it in a nutshell, back to the position itself. Heineken’s share price rose above 100 Euro’s last week, at that time it got me thinking the valuation seems a bit high at the moment. The last jump up was also quite significant. Nonetheless Heineken remains a very solid company with great dividend history, worth having in any portfolio.

So I took a bit of a gamble and sold a Call option, strike price 100 euro, expiration date 15 December 2023. At 12,50. And I have set a goal buying the option back at 9,25. Let’s see how this works out.