Chance the Rapper, with 'Acid Rap' Mixtape, Meets the Legal Black Hole Around Unsigned Artists (From the Magazine)

Nearly a decade after the mixtape wars of the mid-2000s, the format still resides in an awkward limbo for retailers, distributors, artists and labels. Many retailers stopped carrying mixtapes after the RIAA proved litigious against the sale of unofficial releases, leading police raids on several retailers in 2005 and on the offices of DJ Drama in 2007. But mixtapes remain a critical promotional tool in the industry, particularly among hip-hop artists, where they often rival official albums. Outside the purview of the major-label system, sales of the format have persisted.

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Last month, a mixtape album by unsigned artist Chance the Rapper available as a free download landed at No. 63 on Billboard's Top R&B/Hip-Hop Albums chart, having sold 1,000 copies in the week ending July 7, according to Nielsen SoundScan. The collection of original music, "Acid Rap," was sold through iTunes and Amazon, despite having been offered for free on the artist's website since April 30. After representatives of the artist claimed that the sales were being made without their knowledge or compensation, digital versions of the tape were quickly pulled from both retailers. But on Amazon, an apparently unauthorized physical version of "Acid Rap," credited to a company called "Mtc," continues to be sold at press time for $14.83.

"I've never heard of Mtc, so this has taken us by surprise," Chance's manager Patrick Corcoran says. "But when I first saw it I showed Chance, and his lawyers are trying to stop it."

Since Chance doesn't have a record deal, he doesn't enjoy the protection of the RIAA. But his mixtapes have generated considerable buzz on the Internet and in the press, enough for a third-party company to see value in manufacturing physical copies and offering them for sale.

An employee of Mtc's distributor, Houston-based 1-Stop Distribution, confirmed to Billboard that it sells "Acid Rap," but refused to say where it obtained the rights to do so. Queries as to whether Mtc and 1-Stop were one in the same went unreturned.

1-Stop sells "Acid Rap" to larger distributors like SuperD, which in turn supply retailers like Amazon and others. Amazon didn't respond to several requests for comment. SuperD CEO Bruce Ogilvie admits that he knew little about 1-Stop or whether "Acid Rap" is a legal product. "It's a new world out there and there are always people trying to figure out how to break the rules," he says. "But if we find out someone is a bad actor, we shut them down. We don't need that headache."

Few checks and balances exist to prevent the work of an unsigned artist from being infringed. Without complaints from a label, illegal copies of a mixtape or other release can slip through the cracks unnoticed. The burden to stamp out infringement then falls on the artist and whatever legal representation he or she may have.

Though he was initially caught off guard by unauthorized sales of "Acid Rap," Corcoran is trying to look on the positive side of things. "This shows that there's a strong appetite for Chance in the marketplace," he says. "How often does a bootleg hit a Billboard chart?"

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