Over the last couple days, a beta version of a new platform called HitPiece has sparked outrage and confusion throughout the music industry after artists and their teams began finding NFTs of their songs posted on the marketplace without their permission.
The NFTs were listed as “available for auction” or as “live” auctions under individual song titles with corresponding album artwork, and while they were characterized as “music NFTs” they did not appear to contain audio.
HitPiece’s mission, according to the company’s pitch deck, is to make a “1 of 1 NFT for every song,” allowing “USD and Crypto for payment.” The company launched in December, but it wasn’t until Tuesday that people began to really take notice that it was listing NFTs for artists ranging from XXXTentacion to John Lennon to Left at London, most of which were uploaded without the knowledge of the artists or their respective teams. The NFTs were said to operate on HitChain, a private Ethereum side chain which does not provide proof of work.
By Tuesday evening, the site was down, displaying a 404 error. By Wednesday (Feb. 2), the site was restored to feature a simple landing page with the statement: “We Started The Conversation And We’re Listening.”
HitPiece was built atop Spotify’s API, essentially scraping the streaming service with the intent of creating an NFT for every song, according to co-founder Rory Felton on a Jan. 24 episode of the Business Builders – Boise Edition podcast. (Spotify did not yet respond to request for comment). He went on to say the site’s beta version includes “one NFT available for every artist,” claiming that “artists get royalties from not only the initial auction but also every time it’s traded, so it becomes a perpetual revenue stream for artists and rights holders.” His hope for the platform, the podcast said, was to put $1 billion into the music industry — specifically artists.
The problem is, those artists — and their teams — didn’t sign up for it.
“All of my artists on the platform with NFTs up for sale were not authorized,” one independent label manager tells Billboard. “I had never heard of the site before today, nor met with any representative for them.”
When asked if the company could explain how artists that were unknowingly listed on HitPiece could get paid for sales of NFTs on the site, HitPiece said, in a series of exclusive statements to Billboard, “the ability of artists or owners to be paid is a functionality that HitPiece is developing. Those who participate in HitPiece will provide information so that they can be paid by our third-party payment provider.”
The company also clarified that it “never used or sold any copyright music without permission and [HitPiece] will not do so. Any stories to the contrary are false.” When asked if the company consulted a lawyer prior to its beta launch, HitPiece’s representative was unable to answer.
“The metaverse is a new frontier, and HitPiece allows users to create a digital display of album artwork associated with their favorite music, with a one-of-a-kind, non-fungible token (“NFT”) of the artwork,” the statement continues. “HitPiece’s mission is to create a fun experience in the metaverse for music fans and a new revenue stream for artists and owners. Participants in HitPiece will be paid a royalty on the sale of their authorized NFTs. We look forward to working with the artist community to empower fans and artists to connect in new and innovative ways.”
Felton co-founded HitPiece with Jeff Burningham in 2020, who according to the company’s pitch deck, has “founded, ran or early invested in 13 billion dollar + companies” and started Peak Capital Partners, a private equity firm. (He also ran to be the Republican gubernatorial candidate for Utah, but he was defeated before the primary ballot).
Felton is a serial entrepreneur in music and tech, who co-founded the start-up label The Militia Group in the 2000s, launching the careers of such acts as Cartel and Copeland. The label was distributed through Sony RED, according to its co-founder Chad Pearson, and Felton claims on his LinkedIn that Sony eventually acquired The Militia Group’s “major assets.” (Sony Music declined to comment). TMG went on indefinite hiatus in July 2012, according to a brief announcement on the label’s site at the time.
After The Militia Group, Felton went on to work for a series of other start ups and founded companies like AirMule, which allows travelers to monetize their unused luggage allowance by carrying items for other people on flights between China and the U.S., and Feltone, a multi-faceted artist management company and label, with a roster that includes artists like folk-pop band The National Parks.
According to Felton’s LinkedIn profile, he also claims to be a founding member of the American Association of Independent Music, which launched in 2005 — though A2IM president and CEO Richard Burgess, refutes the claim. Burgess tells Billboard, “It appears that Militia was a member from Aug. 29, 2005-July 2, 2008. As best we can tell, they were not founding members of A2IM but early members.”
Burgess says he first heard of HitPiece within minutes of its beta site launching, adding that after visiting the page himself it was clear to be a “complete sham.” He says one of the biggest red flags were the valuations, which listed music by both John Lennon and Khalid for exactly $21,474,836.47. “The chances of that coincidence occurring are probably trillions to one,” he says. He explains the 47 cents in particular indicates the use of an algorithm based on a “well-known number” (referred to as Int32 Max Value, which is the maximum number that can be coded in certain programming languages).
A2IM sent a memo to each of its rights-holder members on Wednesday (Feb. 2) to address the matter, with Burgess stressing, “A2IM did not and does not endorse this kind of copyright infringement behavior in any way. In fact, we are an organization that fights to preserve and increase the value of music copyrights.”
For rights holders looking to pull their material off HitPiece, attorney Harry Roberts, partner at Roberts & Hafitz, PLLC, says, “the first course of action here is to send a cease and desist. If there is consistent disregard for it, then you can evaluate other legal options.” This is something artists and their teams are already doing. On Twitter, Tabula Rasa Records posted its cease and desist against HitPiece, which listed its artists — including Roby and RamonPang — who appeared on HitPiece without knowledge. The label also offered its followers a blank template for others to do the same.
“Under the copyright act, you have exclusive rights to authorize the reproduction and distribution of your work,” Roberts continues. “Here, the cover artwork is prominently displayed throughout the site. Whoever owns the cover art, which is usually a label or under exclusive license to a label, would have a claim against HitPiece.”
He adds, “There’s no fair use defense here that I can think of.”
Artists may also be able to make a claim against HitPiece citing the Lanham Act. “It’s a trademark claim which applies in the event that you are being used for unauthorized or false sponsorship or endorsement of something,” Roberts says. “They can claim this because their name and likeness is used on this website. Even if the product was never minted, there’s still a product involved here.”
At the very least, most can agree it’s a bad way to launch a company.
“[Felton has] pissed off the entire independent sector, he’s pissed off everybody – and he’s wasted a bunch of time,” says Burgess. “It’s not the way to do business.”
Additional reporting by Lyndsey Havens
