((PKG)) COVID -- NY ART INVESTMENT
((TRT: 02:52))
((Banner: The Economic Flipside))
((Reporter: Vladimir Lenski))
((Camera: Max Avloshenko))
((Adapted by: Zdenko Novacki))
((Map: New York City, New York))
((Main characters: 1 male))
((MUSIC/NATS))
((Scott Lynn, Founder, Masterworks))
Art has obviously been around for centuries. Also for centuries,
it's really been collected by the ultra-wealthy, right? Like, even if
you go back hundreds of years. This is the first time that art really
can be purchased and owned by anyone. So, from our
perspective, it's not necessarily a commoditization of the object.
It's really just a way for anyone to participate in the acquisition
process.
((MUSIC/NATS))
((Scott Lynn, Founder, Masterworks))
Very simply, investors can come to our website. They can view
different works of art that we have available for investment.
((Scott Lynn, Founder, Masterworks))
They can invest amounts as small as $500 dollars or as large as
thousands of dollars in a particular painting. When you look at the
art market last year, $68 billion in art was sold. Most of those
objects are culturally significant and they are going into private
collections. They're going away from public view. And depending
on the collector, I would say the majority of collectors in today's
world don't actually lend those objects out. So, a great feature of
the Masterworks platform is the ability to keep those objects in
front of the public. We like the idea of once we purchase these
paintings and then sell them off to investors, to re-loan them out
to museums.
((MUSIC/NATS))
((Scott Lynn, Founder, Masterworks))
At Masterworks, our perspective has been that art is an
uncorrelated asset class, meaning that it doesn't necessarily go in
the same direction as the stock market or other asset classes.
((Scott Lynn, Founder, Masterworks))
So, what we've seen with COVID is that although there's been a
large decrease in the total volume of sales by roughly half, we've
actually seen our prices increase. And I think in June alone, we
saw 22 artists that set price records.
((MUSIC/NATS))
((Scott Lynn, Founder, Masterworks))
For example, many people use IRA or retirement accounts to
invest in these paintings. So, we want to make sure that the
returns are as predictable as possible and the risk is reasonable.
((MUSIC/NATS))
((Scott Lynn, Founder, Masterworks))
Obviously, most of the people that are on the Masterworks
platform today are doing that for investment, but I think it does
change how artists think about selling their work. You know, over
time, we can see a world where artists would prefer to have a
thousand people who enjoy their work and know their work very
well, own a painting rather than one person who is frankly very
wealthy and takes it out of circulation.
((MUSIC/NATS))
((Scott Lynn, Founder, Masterworks))
But the common question around that is, why would our prices be
increasing during COVID? And our best guess is that our prices
tend to be correlated to the top one percent. So, as the top one
percent become wealthier, we see our prices go up. So, for better
or for worse, that dynamic has continued independent of COVID.
((MUSIC/NATS))
((TRT: 02:52))
((Banner: The Economic Flipside))
((Reporter: Vladimir Lenski))
((Camera: Max Avloshenko))
((Adapted by: Zdenko Novacki))
((Map: New York City, New York))
((Main characters: 1 male))
((MUSIC/NATS))
((Scott Lynn, Founder, Masterworks))
Art has obviously been around for centuries. Also for centuries,
it's really been collected by the ultra-wealthy, right? Like, even if
you go back hundreds of years. This is the first time that art really
can be purchased and owned by anyone. So, from our
perspective, it's not necessarily a commoditization of the object.
It's really just a way for anyone to participate in the acquisition
process.
((MUSIC/NATS))
((Scott Lynn, Founder, Masterworks))
Very simply, investors can come to our website. They can view
different works of art that we have available for investment.
((Scott Lynn, Founder, Masterworks))
They can invest amounts as small as $500 dollars or as large as
thousands of dollars in a particular painting. When you look at the
art market last year, $68 billion in art was sold. Most of those
objects are culturally significant and they are going into private
collections. They're going away from public view. And depending
on the collector, I would say the majority of collectors in today's
world don't actually lend those objects out. So, a great feature of
the Masterworks platform is the ability to keep those objects in
front of the public. We like the idea of once we purchase these
paintings and then sell them off to investors, to re-loan them out
to museums.
((MUSIC/NATS))
((Scott Lynn, Founder, Masterworks))
At Masterworks, our perspective has been that art is an
uncorrelated asset class, meaning that it doesn't necessarily go in
the same direction as the stock market or other asset classes.
((Scott Lynn, Founder, Masterworks))
So, what we've seen with COVID is that although there's been a
large decrease in the total volume of sales by roughly half, we've
actually seen our prices increase. And I think in June alone, we
saw 22 artists that set price records.
((MUSIC/NATS))
((Scott Lynn, Founder, Masterworks))
For example, many people use IRA or retirement accounts to
invest in these paintings. So, we want to make sure that the
returns are as predictable as possible and the risk is reasonable.
((MUSIC/NATS))
((Scott Lynn, Founder, Masterworks))
Obviously, most of the people that are on the Masterworks
platform today are doing that for investment, but I think it does
change how artists think about selling their work. You know, over
time, we can see a world where artists would prefer to have a
thousand people who enjoy their work and know their work very
well, own a painting rather than one person who is frankly very
wealthy and takes it out of circulation.
((MUSIC/NATS))
((Scott Lynn, Founder, Masterworks))
But the common question around that is, why would our prices be
increasing during COVID? And our best guess is that our prices
tend to be correlated to the top one percent. So, as the top one
percent become wealthier, we see our prices go up. So, for better
or for worse, that dynamic has continued independent of COVID.
((MUSIC/NATS))
