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Quote of the day
“The person passionate about what he or she is doing will outwork and outlast the guy motivated solely focused on making money." - Reid Hoffman, Co-founder, Linked In

Dear Thinklers,
Over the last few years, there's been an interesting advent of platforms which enable people to earn a livelihood in a way that highlights their individuality. They allow creators to pursue their passion, share it with millions online and get paid for it. This is quite different from the earlier gig economy, which while promising one to be their own boss, offered work which was often one-dimensional - food delivery, transportation, parking. We explore this amazing new trend is our feature today, The Passion Economy.

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Today's Stories
Feature: What is Passion Economy?
So, what else is Brewing?
Market Watch

Today's Stories
INSURANCE
Private life insurers’ first year premiums grow
The year-on-year growth in the first year premiums (FYP) of the 23 private life insurers gathered pace in July – it was 26% y-o-y and 27% month-on-month (m-o-m). The public sector behemoth Life Insurance Corporation (LIC) reported staid growth numbers: -0.92% y-o-y and -33% m-o-m. Consequently, the industry registered a 6.87% y-o-y and -20% m-o-m growth.

Individual single premium and group single premium segments grew even as other segments de-grew. Total FYP in the month was Rs.22,986 crore and for the four months of this financial year Rs.72,322 crore. LIC’s market share for the four month period stood at 71%.

SBI Life and HDFC Life did particularly brisk business in the month; both registered over 40% y-o-y growth.

Interestingly, both the number of policies sold and the number of lives covered decreased in the four month period y-o-y across both private companies and LIC; but registered smart gains of over 58% m-o-m (for the industry).

AUTO
Auto sales improve but registrations dull
Vehicle sales in India recovered on a sequential basis and registered high double-digit growth. Post lockdown in April and May, factories resumed production and most dealerships opened. While sales did recover lost ground, year-on-year (yoy) numbers still need to play catch up.

In July 2020, yoy car sales witnessed a mere 1% de-growth. But, vehicle registrations in July 2020 fell by 36%! However, officials at Federation of Automobiles Dealers Association (FADA), the apex body of automobile retail industry in India, believe that the current market conditions are still not indicative of the actual demand situation on an all-India level.

Moreover, although banks and non-banking financial companies are flush with high liquidity, they still have a cautious approach towards funding auto retail, affecting demand revival, especially in commercial vehicles, two wheelers and three wheelers. Hence, a 10-15% fall is seen in vehicle funding in several segments, increasing the initial contribution beyond the reach of many customers, despite the intent to buy. Nonetheless, growth continues to be led by rural demand, despite persisting supply chain constraints.

AIRLINES
Cash and carry – AAI’s message to GoAir
An airline operating from any of Airports Authority of India’s (AAI) 100 airports has to pay for various facilities used at these airports. AAI falls under the Ministry of Civil Aviation.

GoAir has to pay dues upto Rs.50 crore to AAI. However, given the prevailing difficult situation for airlines because of the pandemic causing travel restrictions, airlines are running into losses. As recourse, effective August 11, 2020, AAI has asked GoAir to pay charges daily to operate flights from AAI-managed airports.

Wadia Group, which controls GoAir, has assured in a statement that passengers will not be impacted by AAI’s decision. Airports in Delhi, Mumbai, Bengaluru and Hyderabad are managed by private companies and not by AAI. The loss to Airlines in Asia-Pacific countries, including India, is estimated at USD 29 billion for 2020, making it the worst region for aviation, as per International Air Transport Association (IATA).

GLOBAL ECONOMY
UK’s GDP crashes 20.4% in June quarter
The country has suffered the most economic damage from the covid-19 pandemic and recorded the highest death toll as well. It is also the second consecutive quarterly decline in growth. Even during the global financial crisis, the country’s GDP had not declined by more than 2.1% in one quarter.

Services sector output declined 20% with accommodation and food services plunging 86.7%. For the first half of the year compared with the end of 2019, the country's cumulative GDP growth (-22.1%) is much worse than other major economies - France's GDP fell 18.9%, Italy's GDP fell 17.1%, Germany's GDP fell 11.9% and U.S. GDP fell 10.6% during this period.

The economy is expected to get back on track in June even as shops reopen and factories begin to ramp up production. The Bank of England expects the economy to shrink 9.5% in 2020, the worst decline since 1921 (-9.71%).

Feature: The Passion Economy
We are definitely living in strange times. "Back in our days", work used to be something we did after earning a college degree, or an MBA - it involved 1-2 hours of travel to the workplace, putting in 60-hour weeks (no overtime, mind you) and often working through weekends; not to mention office politics and horrible increments. Overworked, underpaid, yet forever running up the corporate treadmill. And passions? If by that you meant hobbies like writing, gaming, singing - those were long forgotten elements from the school and college days. A lucky few perhaps managed to revive them, often to overcome their corporate burnout, but by and large these were luxuries few could afford.

But what if you were paid to pursue your passion - to sing, write, dance, play games. Kidding, right? Actually no. Welcome to the passion economy.

The Passion Economy
On Substack, one of the top paid newsletter earns the author more than $500K a year from paid subscriptions. A top content creator on Podia, a platform for video courses, can easily pull in $100K a month. You might've heard of YouTube and its creators. But what about Twitch for gaming? No, it's not where one goes to play online games (that's Steam). Rather, it's a place where you go to watch other players play games online! So, you can sit and watch first-person shooter games like Fortnite, PUBG or get absorbed in strategy games like League of Legends or the classic Age of Empires. Or simply watch DJs play music!

These new digital platforms dedicated to the passion economy enable people to build audiences at scale and turn their passions into livelihoods, whether that’s playing video games or producing video content. It allows people to build customer engagements, provides them with tools to market themselves, manage their payments (in case of freemium or subscription services) and build their fan, or rather cult, following.

So, how is this different from the Gig Economy?
While sometimes the term gig economy is used interchangeably with passion economy, at heart they are quite different.

In the past decade, we saw a lot of on-demand marketplaces emerge along the lines of "Uber for food-delivery, transportation", which enabled workers to make money in their free, available time. A college guy could switch on his Uber app to pick up rides during his spare time, or a guy with a bike could do food delivery for Zomato or Swiggy in the peak mealtime hours. While they did a great job of matching the demand and supply and providing jobs to millions, their success was predicated upon being able to deliver consistent, homogenous service. So, while you get to be your own boss, the work was often one-dimensional.

In passion economy, you make money because you are different. The focus of the platforms is to help highlight one's individuality, their uniqueness. This is what attracts millions of users to various platforms and to watch people sing, dance, cook, teach and play!

Characteristics of the Passion Economy
Li Jin, Partner at the respected Silicon Valley VC firm, Andreessen Horowitz, believes that that the commonalities of the passion economy are:

1. Democratisation of access: Everyday people can launch and grow a business, and scale it to dizzying heights. Success of people on Insta, TikTok, Udemy, Outschool is testimony to that

2. Individuality is celebrated: Unlike the gig economy, diversity is encouraged. We are moving from a world of broadcasting to 'narrow-casting'

3. Digital and virtual: Unlike the previous entrepreneurship-enabling platforms like Amazon, Etsy, eBay, which focused on physical goods, the passion economy focuses on digital goods and hence, works and operates quite differently from the predecessors. Additionally, the business model is usually built around percentage of revenue share rather than transaction fees

4. Radical business models: Jin talks about the microblogging site Weibo in China, where users sell content such as Q&As, exclusive chat groups, and invite-only live streams which has spawned a wave of non-traditional influencers—financial advisors, bloggers, and professors.

So, while the older generation might struggle to understand the lure of this new trend (a job without fixed work timings, security or consistent pay) the passion economy is here to stay and will have huge implications for entrepreneurship and what we’ll think of as a “job” in the future.

(In case you have some feedback or would want to get your article featured in this section, write to us at brew@thinkly.me)

So, what else is Brewing?

US ELECTIONS
Joe Biden announces Kamala Harris as his running-mate
The senator for California will be the first black woman on a major party's presidential ticket. Harris clashed with Biden in the primaries but stepped out of the race in December 2019 citing lack of funds. She has been widely seen as a safe, centrist choice and seemed like a popular choice for the VP nomination. Her father, who was Jamaican, taught at Stanford and her mother, the daughter of an Indian diplomat, was a cancer researcher.

VACCINE
Russia launches Sputnik again
Russia became the first country to grant regulatory approval to a vaccine against covid-19. Coming on the back of just two months of human trials, some experts question the speed of the process. President Vladimir Putin, whose daughter has already been inoculated, said the vaccine “had passed all the necessary tests”. Mass inoculation could start this month.

Russia named new COVID-19 vaccine 'Sputnik V' in reference to Cold War space race. It seems to have won this race for now.

US CITIZENSHIP
Increasing numbers renounce U.S. citizenship
A study by a New York based firm, Bambridge Accountants, revealed that more than 5,800 Americans gave up their coveted citizenships in the first six months of 2020. About 2,000 gave up their citizenship in 2019. A payment of USD 2,350 and personal appearance at the U.S. embassy is needed for those who are not in the country and would want to give up the citizenship.

GIG ECONOMY
Uber, Lyft drivers not contractors: California Judge
The Judge granted the state’s request for a preliminary injunction blocking the companies from classifying their drivers as independent contractors rather than employees.

The companies have been accused of violating assembly bill 5, a new state law that requires companies to classify workers as employees if they controlled how workers did their jobs, or the work was part of their normal business.

BIOTECH
Scientists manipulate genes to enhance crop yields
Researchers at the University of Essex, UK, used genetic manipulation processes to enhance photosynthesis in the tobacco plant. They noticed the plant’s ability to convert light energy into chemical energy increase significantly. Also, the transgenic plants needed much less water to produce the higher yields. The study was published in Nature Plants.

They now hope to use the technique to growing crops – soybeans, cowpea and rice.

CIRCUS
Germany’s Krone Circus finds new side income in cat droppings!
The circus is home to 26 lions and tigers. Despite these testing times, it has raised money selling droppings of big cats in jars, at 5 euros each. Martin Lacey, the lion tamer says, “I am told it keeps cats away from the garden, and animals away from the car, where they eat all the electric cables”. Some part of the money is for charity to improve the living conditions of captive animals.

COFFEE BREAK
Quiz
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Market Watch
INDICATORS
Nifty 50                        11,308          -0.12%
Nifty MidCap 50         4,505           +0.57%
India 10yr gsec yield  5.88%          -0.32%
Gold (Rs./10 gm)        53,758           -1.43%
US Dollar - Rupee      74.83             -0.07%
*As of market close

Equities continued to edge upward this week as well. Foreign institutional investors (FII) have been net buyers for 7 of the 8 trading days this month, the net purchase being Rs.11,164 crore. Domestic institutional investors sold Rs.4,993 crore in the same period. This is the fourth consecutive month in which FIIs have been net buyers.

Debt markets have been moribund for over two months now. Rupee depreciated further against the U.S. Dollar – about 2.5% since mid April this year. Precious metals corrected this week after its blistering run up for over two months.

Wear a mask. Stay safe.

Yours musingly,
The Desk @Brew

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