Last night I had dinner with some friends. It was a wide ranging discussion that started with a discussion of hedging strategies for equity portfolios. Some people talk about politics and sports at dinner, but that can get boring. So my head is deep into derivatives when the discussion turns to their son, who is an aspiring DJ. The son specializes in writing original music to match the words of well known songs. Video below.
Effectively what the son does is strip out the music for a song and replace it with his own music. Same strategy is used in derivatives where, for example, the interest stream on a bond is separated from the principal and sold separately (a form of derivative).
What occurred to me is that with current technology, there are many ways in which creative content could be separated into its components to create separate, new products. Movies and games come to mind.
