Are HitPiece and NFTs Pushing a Dystopian Vision of the Music Industry?
By Nat Szczepanski
Earlier this month, I found myself scrolling through Twitter— a pastime most are familiar with. While I’m accustomed to seeing a constant stream of telecommunications-related discussions on my feed, I noticed on this particular night that DIY alternative musicians were venting about non-fungible tokens (NFTs) en masse. A member of the band Thank You I’m Sorry, Colleen Dow (they/them), tweeted, “diy vs crypto starts now,” which clued me in to the fact that the situation unfolding was bigger than I’d initially thought. It turned out that a vast amount of artists were seeing their music auctioned off without permission as NFTs on a site named HitPiece. The relative size or fame of the musician didn’t matter; from Britney Spears to my favorite band at the moment, Save Face, the impact of this website’s actions was far-reaching.
But what is an NFT? How does cryptocurrency factor into this? What the hell is blockchain? I will explain these in-depth later. As we analyze the situation around HitPiece, it’s imperative that we first look beyond the initial outrage and understand that this incident is but one part of a larger context surrounding the development of the next version of the Web (known as Web 3.0 or Web 3) by a small minority of people. NFTs are consistently praised by Web 3 advocates but time and time again they are shown to be nothing more than gimmicks — and they are seeping into other businesses at an alarming rate. HitPiece sets a dangerous precedent of further undercutting artists in an industry already infamous for it. And if the music scene continues to use these technologies, it will only exacerbate the issue.
THE WEB LANDSCAPE OUT OF WHICH THE NFT WAS BORN
Before diving into the impact of HitPiece and NFTs, I wanted to give some background on the development of Web 3.0 and how it relates to NFTs in general. You might have seen this term thrown around a lot recently, most likely in reference to the Metaverse or Facebook, but I want to shift your attention away from the flashy eye-candy that is virtual reality and towards the supposed building blocks of the next iteration of the Web instead. The first version of the World Wide Web (Web 1.0 for those keeping track) was invented by Tim Berners-Lee in 1990. Berners-Lee created the HTML and HTTP standards we still use today when creating documents on the web and sending and retrieving web pages respectively. Web 1.0 was meant as a space to publish scholarly works but that would only ever be possible if you understood the technology well enough.
As the decade progressed, the web became more and more accessible to everyday people, and also began fostering connections as online forums took off in popularity. This is Web 2.0 and the online world as we know it. Coined in 1999, the same user-generated content and social premise of this iteration remains intact today.
Web 3.0 is a bit trickier to pin down as it’s not yet fully realized. There have been a few manifestos published that attempt to define this successor and it seems most have the following characteristics between them: it should be decentralized, or in other words not controlled by one central entity or entities; intelligent enough to interpret information to fit your needs; and built upon blockchain technology. HitPiece and other networks like it merely exist overtop these foundations, attempting to cement blockchain as a standard for further dealings over the web.
HOW DO BLOCKCHAINS AND NFTS WORK? BREAKING DOWN DIGITAL OWNERSHIP, TOKENS, AND MORE
Speaking of which, now is a good time to finally delve into blockchains and NFTs. Blockchains operate essentially to decentralize peer-to-peer transactions, such as buying, selling, and exchanging or establishing ownership of digital assets. This is realized by creating ledgers that anyone, in theory, can maintain. Like in the name, it’s best to imagine this ledger as a series of blocks (vessels for containing information) that are in chronological order and linked by hashes. It’s impossible to manipulate this chain because doing so would alter the hash and therefore break the connection to the rest of the blocks. Adding to the chain requires a concept called “Proof of Work,” or simply a hard computational problem to figure out the right hash combination to create the next block. The hash answer should then be easily verifiable by others. Those with enough funds can set up computers to start solving equations for unconfirmed blocks, which is a process called mining. Your reward for continually adding to the chain is a few coins of whatever the defined cryptocurrency is to a certain blockchain, whether it be Bitcoin or Ethereum.
Eventually, someone figured out how to create lines of code or “Smart Contracts” that can execute different functions. The one of interest to us links to digital assets and is otherwise known as a token. Non-fungible tokens, in simplified terms, link to unique digital items such as works of art, real estate, music, or videos. Remember, this does not automatically indicate direct ownership of whatever the asset may be but instead serves as a link. The draw of NFTs is the “non-fungible” aspect, meaning these items are not interchangeable but rather operate on the basis that each is unique and worth different rates. However, that does not stop others from being able to make copies. Instead, liken NFTs to a memorabilia item, wherein the original is more valuable than copies. You can see how this would open the door for speculation and auction markets.
THE RISE OF HITPIECE: THE ADOPTION OF BLOCKCHAIN IN THE MUSIC WORLD
HitPiece attempts to do this with music by facilitating bidding on songs, which will go on to be minted as NFTs. Before the website was effectively shuttered, except for a generic “we’re listening” message, it stated, “You, the music fan, can purchase one-of-one unique music NFTs from your favorite artists.” However, artists would not directly receive the earnings from this auction but instead, rights holders — if an account existed — would be paid via royalties. The possibility of fraud was rampant as well; supposed rights holders that uploaded music to the site were not asked to prove their authenticity. There is also an unsubstantiated claim that HitPiece’s owner had access to Spotify’s interface in order to list music on the site because of a prior working relationship with the company. And so, this could be a possible explanation for why lesser-known musicians saw their art listed.
WHO IS BEHIND HITPIECE? TRACING THE COMPANY’S START AND TROUBLED VISION
The rumors surrounding the company’s owner compelled me to dig a little deeper into who exactly was the brains behind HitPiece’s operation. Through the company’s LinkedIn page, I found rather easily that Rory Felton is the co-founder of HitPiece and has prior experience in the music industry as both co-founder and CEO of “a record company and music publishing company that captured the essence of 2000s punk, indie, and emo,” and he has experience in acquisition for Sony Music. Felton’s LinkedIn profile also states an interest in the Metaverse and Music, this intersection acting as an inspiration for melding the two together via Web 3 technologies. This is a bit worrying considering recent news of a conspiracy to launder $4.5 billion in stolen crypto and the pyramid-scheme-like nature of NFTs in general. As I mentioned earlier, I spend a decent amount of time within the sphere of telecommunications theory and policy, and so upon finding a post by Mr. Felton entitled “How to Win the Music Industry of 2019-2025,” I was deeply troubled by what I read in regards to his vision of where the industry should go. He explained that the company which will dominate the market will invest in “streamlining the process of identifying stars and hits before the wider industry does.”
The avenue through which this will be achieved, Felton said, is via proprietary algorithms and AI, where it analyzes audio quality, artist performance quality, social and streaming metrics to assign a score that will indicate virality and profitability. Within Felton’s proposed scenario, artists are reduced to nothing more than commodities that are assigned their value in relation to others. And that value is assigned by an AI programmed with the biases of its creator, meaning this process of recognizing stars relies on a select group’s opinions rather than audiences. His vision for the industry seems fairly dystopian.
NFTs make an appearance of course, with Felton suggesting that they will act as digital collectibles within a fan club-like ecosystem, hailing the implementation of gated content and limited access to facilitate participation in the economy of the music industry. This raises obvious concerns. Isn’t music meant to be accessible and community building for all? For someone who ran a punk/alternative label and presumably participated in the scene, it doesn’t seem very punk to price out fans.
The NFT market is notoriously hard to enter if you don’t have the funds to invest in crypto, which is highly unstable and only used for speculative purposes. The average price of an NFT is 0.65 Ethereum (as of Feb 3rd via Statista) or roughly $1,823. I personally don’t have that kind of money to spend, and I assume that I’m not alone: meaning a great deal of people could not afford to support their favorite artists under this model.
HitPiece is nothing more than a grift meant to make an insane amount of money for its owners and investors. It operates by stealing music without permission and uploading it to an online auction house where most of the earnings will be pocketed by the likes of co-founder Rory Felton. Put simply, a musician’s right to ownership over their art is blatantly disregarded in favor of finding another use for blockchain technology. The instinct is to make money rather than art, packaging performers into easily digestible bits of data for algorithms wherein they can spit out an arbitrary value to be assigned. For right now, HitPiece is an isolated incident, but as the push for the integration of these technologies becomes louder and louder, the potential for more exploitation of not only artists but consumers as well is increasingly worrying.