The Recording Industry Association of America, representing U.S. record companies, has upped the legal pressure on HitPiece, describing it as an “NFT scam site,” by issuing a letter to its attorneys and founders. It is demanding that the site stop infringing intellectual property and provide its full revenue details to date. The RIAA is also insisting that it “account for all NFTs and artwork auctioned off” during its brief, but controversial, life.
HitPiece ceased activity last week as controversy enveloped it. It was accused of selling NFTs that infringed artists’ rights and of operating without their approval. I’ve reached out to HitPiece for comment and am awaiting a response.
The listing on its site said it “let fans collect NFTs of your favorite songs” and looked to gamify the experience by encouraging users to buy more. “Each HitPiece NFT is a One of One NFT for each unique song recording,” it explained. “Members build their Hitlist of their favorite songs, get on leaderboards, and receive in real life value such as access and experiences with Artists.”
The NME reported last week: “The website currently shows hundreds of what appear to be active auctions for NFTs tied to artists’ albums and songs, from prominent artists such as the Beatles, Taylor Swift and Bob Dylan to smaller independent acts.”
The HitPiece site, still marked as being in beta, now has one simple message on its homepage but no other information. “We Started The Conversation And We’re Listening,” it says. It has outbound links to its Instagram and Twitter accounts, but neither has been updated for at least a week.
This, however, was not enough to placate the RIAA and its members. The letter it sent (and posted online over the weekend) has demanded that the operators keep the site down permanently and to account for every sale that happened before the plug was pulled.
Ken Doroshow, chief legal officer at RIAA, did not hold back in his criticisms of the site and its tactics. “HitPiece appears to be little more than a scam operation designed to trade on fans’ love of music and desire to connect more closely with artists, using buzzwords and jargon to gloss over their complete failure to obtain necessary rights,” he said. “Fans were led to believe they were purchasing an NFT genuinely associated with an artist and their work when that was not at all the case.”
The company has argued that it did not sell any actual music in its offerings, but the RIAA says it was bundling up names and images of musicians as well as their album artwork and other “protected images” which are owned by the acts or their record labels. “Your clients’ outright theft of these valuable intellectual property rights is as outrageous as it is brazen,” runs the RIAA’s letter to HitPiece’s legal team.
It is not the first time that music NFTs have run aground amid accusations of scamming and fraud, but it really seems to have moved up several gears in 2022.
In early January, Ozzy Osbourne launched his CryptoBatz collection, selling 9,666 digital bats as NFTs. According to The Verge, within days of tokens being minted, however, “supporters [were] being targeted by a phishing scam that drains cryptocurrency from their wallets, playing off a bad link shared by the project’s official Twitter account”.
The Guardian reported earlier in the year that the selling of stolen digital art as NFTs was widespread on one NFT marketplace in particular. “OpenSea has grown at a dizzying pace, and is now valued at $13bn,” wrote the paper. “But amid its spectacular rise, the company is doing far too little to prevent the trade in fraudulent NFTs, some artists charge, and is placing much of the burden of policing art fraud on the artists themselves.”
OpenSea admitted at the end of January that its free minting tool was causing many of the problems here. “[W]e’ve recently seen misuse of this feature increase exponentially,” it tweeted. “Over 80% of the items created with this tool were plagiarized works, fake collections, and spam.”
The whole NFT sector is one that generates as much effusive coverage as it does suspicion. For the music business, it has been an exhilarating entry into this world. At the start of 2021, barely anyone in music knew what NFTs were, but after acts like Grimes, 3LAU and Steve Aoki made phenomenal sums of money from them, suddenly thousands of musicians raced in.
The risk of mass infringement and scam networks being set up around music-centric NFTs will not derail the music business’s interest in this world (and, one cannot forget, the huge sums of money involved).
It does show, however, how fast things move in the digital space and how what was seen as a lifeline for musicians only a year ago quickly curdled into yet another way for them to feel exploited and ripped off.
Published By : Forbes