Current Issue
This Month's Print Issue

Follow Fast Company

We’ll come to you.

Hank Risan on BlueBeat's $20 Million Gamble...on 25-Cent Beatles Tracks?


Bluebeat founder Hank Risan says he sank $20 million into an effort to revolutionize digital music delivery. But he flushed it all the day he offered Beatles tracks for a quarter a pop, a judge has ruled.

U.S. District Judge John F. Walter issued a preliminary injunction against and, handing a victory to music company EMI Group, which sued Risan and his companies recently. Risan is now banned from streaming or selling songs on BlueBeat by the Beatles and other longtime digital holdouts such as AC/DC and Pink Floyd. Risan says the tracks are original works performed by a "virtual cover band"—they use algorithms to analyze the original works and create "psycho-acoustic simulations" of those works.

The decision comes a day before a scheduled hearing in which Risan and his attorney planned to present their case. "In America, you'd think you could get a trial," Risan tells "I wasn't able to go in front of him and tell him all of the things that took place that legally allowed us to do this."

Among those things, Risan says, is permission from the Recording Industry Association of America and the International Federation of the Phonographic Industry (IFPI)—the group represents the worldwide recording industry and 1,400 labels, including EMI—to develop his technology. As far back as 2003, Risan says, he gave EMI special access to Bluebeat, Beatles tracks and all, so they could approve of his R&D testing. "The important thing was, we were authorized to do it," he says.

Somewhere along the line, that permission got lost, though. Risan says he filed documents with the court related to the approvals but he declined to provide with any piece of evidence in which EMI granted Bluebeat permission to stream anything. Risan says he doesn't want to ruin future chances of striking an agreement with the label. He has $20 million invested in the concept—his own money plus funds from investors, he claims. EMI issued a "no comment," as is their practice with most matters of litigation.

Risan does not claim to have permission to sell anything—call it Beatles tracks or, in Risan's parlance, "psycho-acoustic simulations" or public performances thereof. At the end of the day, Risan's work are songs that sound remarkably similar to the originals. So similar, in fact, that the judge essentially considered them to be copies. "The interesting thing that Judge Wallace did was he listened to the original CD, and he listened to our 160k work, and he couldn't hear the difference."

Wallace clearly didn't consider that a testament to Risan's technology, though. More like a smoking gun.

Risan is still filing patents related to digital music—social networking is his latest frontier, he says—and deciding whether to appeal Wallace's injunction. "I think he just didn't have enough information to make a good ruling," he says. For now, BlueBeat will stay shut down. Meanwhile, The Beatles' latest remastered stereo box set is selling for a little more than $200 on eBay.