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From Hot Money: Playboy vs. Rusty and Edie · What's Your Problem?

0:15
Speaker 1: Pushkin. Hey, it's Jacob Goldstein. We'll have a new episode
0:20
Speaker 1: of What's Your Problem for you later this week. In
0:23
Speaker 1: the meantime, we're sharing an episode of a new podcast
0:26
Speaker 1: called Hot Money. It's a collaboration between Pushkin and The
0:29
Speaker 1: Financial Times, and it's about the business side of the
0:32
Speaker 1: porn industry. It's a great show, full of insights and
0:35
Speaker 1: amazing stories, and this episode in particular seemed like a
0:39
Speaker 1: really good fit for What's Your Problem. As you'll hear,
0:42
Speaker 1: it's a story all about technological change and entrepreneurs and
0:46
Speaker 1: the hard problems they're trying to solve. I hope you'll
0:49
Speaker 1: like it. Right before we start, we're two Financial Times
0:54
Speaker 1: journalists trying to work out who rules the porn industry.
0:59
Speaker 1: So this show has adult themes. I want to take
1:08
Speaker 1: you to a suburb shopping plaza in Ohio. It's nineteen
1:12
Speaker 1: ninety three. We're in the middle of America's rust belt.
1:16
Speaker 1: There's a two paced store place selling furniture, and tucked
1:21
Speaker 1: in a corner a little company for interactive computer services.
1:27
Speaker 1: I know it sounds ridiculous, but if the Internet has roots,
1:32
Speaker 1: they stretched to here, to this modest shopping center in Youngstown,
1:37
Speaker 1: Ohio to that corner business. Every social media website you
1:43
Speaker 1: visit today, Facebook, Twitter, TikTok. These platforms are able to
1:49
Speaker 1: operate in part thanks to them. A family run IT business,
1:54
Speaker 1: A family run IT business with what was possibly the
1:58
Speaker 1: biggest stash of digital pawn in America. Today's powered anamics
2:04
Speaker 1: and porn came from here, straight from that family to
2:08
Speaker 1: the most powerful pornographers of the twenty first century, the
2:12
Speaker 1: people we've been talking about on this show. And you
2:16
Speaker 1: know we told you in previous episodes that the masters
2:18
Speaker 1: of the adult tube sites were able to get away
2:21
Speaker 1: with making money from other people's content. The answer to
2:25
Speaker 1: how lies here and the choices of an Ohio family
2:29
Speaker 1: back in the nineties. This family, the Hardenburg's, define what
2:34
Speaker 1: it means to moderate content and cyberspace and what happens
2:39
Speaker 1: when you go too far. My name is Russell Francis Hardenburg,
2:44
Speaker 1: the fourth, and I'm a sales manager at a car dealership.
2:48
Speaker 1: Russ is one of two sons who worked at the
2:50
Speaker 1: IT business back in the day. When I first called
2:54
Speaker 1: him and said I was a journalist, he slammed the
2:56
Speaker 1: phone down. I'm so pleased. I tried again after some
3:01
Speaker 1: apologetic mumbling. I said to Russ, I want to hear
3:05
Speaker 1: how your family changed the history of the Internet, and
3:10
Speaker 1: after a pause he replied, Okay, call me after work.
3:15
Speaker 1: The Internet was so new that there was some question
3:17
Speaker 1: whether you took a book and converted it to text
3:23
Speaker 1: where the copyright laws still would that apply to that
3:26
Speaker 1: It was just the wild West at first, and that's
3:38
Speaker 1: the difference Rust and his family made. Their mistakes helped
3:42
Speaker 1: Lady ground rules for an online world. Who owns digital media,
3:47
Speaker 1: who has a right to share it, and most importantly,
3:50
Speaker 1: how the Mark Zuckerberg's of the world can run online
3:53
Speaker 1: platforms to stay off the hook even when illegal content
3:56
Speaker 1: is being shared on their sites. I'm Patrician Wilson. I'm
4:01
Speaker 1: Alex Barker from Pushkin Industries and The Financial Times. This
4:06
Speaker 1: is Whole Money, Act One, a Shared World. Later in
4:43
Speaker 1: this episode, Russ and a stepbrother will tell their family
4:47
Speaker 1: story pretty much for the first time. It's the story
4:50
Speaker 1: that created the ground rules for the modern porn industry.
4:55
Speaker 1: But before then, we want to take you further back
4:58
Speaker 1: in history to the nineteen eighties, the moment that online
5:02
Speaker 1: porn first came into being. Let's meet one of the
5:06
Speaker 1: world's first digital pronographers. His name is Dan Lewis. So
5:12
Speaker 1: around nineteen eighty I bought my first personal computer. It
5:19
Speaker 1: was a Radio Shack TRSA D Model one. It was
5:23
Speaker 1: pretty pretty exciting at the time. Your storage device was
5:26
Speaker 1: a cassette tape recorder. The TRSA D the biggest name
5:29
Speaker 1: in little computers only a radio Shack attending company. As
5:36
Speaker 1: far as we can work out, Dan wasn't just one
5:39
Speaker 1: of the first online pornographers. He was possibly the first
5:43
Speaker 1: one to actually turn a profit from it. He's a
5:46
Speaker 1: New Yorker and he looks like a regular boomer, beard, glasses,
5:51
Speaker 1: a friendly uncle type. He wasn't easy to find. By
5:54
Speaker 1: the way, Dan Lewis is his cover name. Yes, another
6:00
Speaker 1: guy with a cover name. Out of desperation, I tried
6:03
Speaker 1: an email address from an advert for something called a
6:06
Speaker 1: bulletin board. It was from nineteen ninety four, but somehow
6:11
Speaker 1: it worked. You could dial up bulletin boards and exchange
6:16
Speaker 1: messages with people and you know, find out some technical information.
6:22
Speaker 1: Now you might have heard of arper net and usenet,
6:26
Speaker 1: the early ways that academics and military types communicated online.
6:30
Speaker 1: Bullets and boards used a similar technology, but They were
6:34
Speaker 1: for the private world, not just public institutions. Anybody could
6:37
Speaker 1: use them. Dan's computer was in his bedroom in Queens.
6:42
Speaker 1: The equipment wasn't cheap, and in Dan's case, no university
6:45
Speaker 1: or government was paying the bills. He would pick up
6:49
Speaker 1: the chunky telephone handset and plug it into an even
6:51
Speaker 1: bigger box, the modem. Through the modem, he would then
6:56
Speaker 1: dial another computer in some far off place, the bulletin
6:59
Speaker 1: Board System or BBS. It was a shared world games,
7:04
Speaker 1: basic software, conspiracy theories, bad jokes. If you knew which
7:09
Speaker 1: board to dial up and you could master to clunky tech.
7:13
Speaker 1: It was all there and young Dan, he was in
7:18
Speaker 1: his early twenties. Den he got more and more obsessed.
7:21
Speaker 1: He was dining up at eleven o'clock at night to
7:24
Speaker 1: keep his meteoric phone bills down. He was broken, barely
7:28
Speaker 1: scraping together money for rent. So I started trying to
7:33
Speaker 1: think about is there a way I could leverage this
7:37
Speaker 1: and supplement my income? Well, what other kinds of BBS
7:43
Speaker 1: related services might people pay for? And decided that, you
7:48
Speaker 1: know what, the only thing people will pay for is sex.
7:52
Speaker 1: People are horny, people are purian, people want to see
7:56
Speaker 1: images of other naked people, or they want to see
8:00
Speaker 1: them engage in activities that they can't try now, or
8:05
Speaker 1: want to try, or have it tried. It's just human nature.
8:08
Speaker 1: Back in nineteen eighty four, a bulletin board interface just
8:11
Speaker 1: had text bright neon green text, but you could download
8:16
Speaker 1: simple images, games, that kind of stuff. Dan's idea was
8:21
Speaker 1: to specialize. He wanted to launch a BBS dedicated to
8:26
Speaker 1: adult stuff, an erotic platform for the uninhabited. The cool
8:31
Speaker 1: started rolling in with hindsight. The technology was laughably basic.
8:37
Speaker 1: Dance system Aislenet was running it one thousand, two hundred
8:42
Speaker 1: bits per second, not kill a bits, not megabits, just bits.
8:48
Speaker 1: So how did it work? Well, you'd sit down at
8:51
Speaker 1: your computer, so you'd go to your dialing list. Okay,
8:54
Speaker 1: which BBS do I want to call? All right, let's
8:56
Speaker 1: call us. When you click on it, and you'll hear
8:59
Speaker 1: procom dialing the modem, it'll ring and the modem will answer.
9:07
Speaker 1: If you haven't heard what a modems sounds like, it
9:09
Speaker 1: sounds a little bit like a fact tone. And you're connected.
9:14
Speaker 1: So you'd get a welcome screen and then you might
9:16
Speaker 1: get a list of subcategories of files. It's okay, So
9:20
Speaker 1: you click on the adult section and then you might
9:24
Speaker 1: get another sub menu of women, men, women and men,
9:29
Speaker 1: and you pick what you want and it'll download. Now
9:33
Speaker 1: the fun begins, zing bing bing bing bing, and it
9:35
Speaker 1: ends up on your computer. Then you get to look
9:38
Speaker 1: at your picture. Isn't that easy? You had to be
9:43
Speaker 1: patient that bing bing bing took minutes, not seconds. But
9:49
Speaker 1: for porn, people were willing to wait, and they would
9:53
Speaker 1: pay for it. At first, Dan charged ten dollars to subscribers,
9:59
Speaker 1: then I one two forty five a year. The checks
10:02
Speaker 1: were being mailed to him in the post. It didn't
10:05
Speaker 1: take long until Dan was making as much from his
10:08
Speaker 1: adult side as he was from his day job. And
10:11
Speaker 1: I mean it was tremendous. Those were the best years.
10:14
Speaker 1: Those were absolutely the best years. You know what's really
10:18
Speaker 1: striking about that time. Pioneers like Dan were on a
10:22
Speaker 1: tiny scale revealing what was about to hit us. All
10:26
Speaker 1: dirty pictures, software, even the written word. If digital goods
10:31
Speaker 1: could be copied, they would be copied NonStop and shared
10:35
Speaker 1: far and wide. And the law, well, as we'll tell
10:38
Speaker 1: you in a bit, it hadn't caught up yet. In
10:41
Speaker 1: this legal no man's land. Dan could become a pornographer
10:45
Speaker 1: of swords, all from his bedroom in Queens without ever
10:49
Speaker 1: having taken a photo or set foot on a pawn set.
10:52
Speaker 1: Even in the age of bulletin boards, people were beginning
10:55
Speaker 1: to realize the implications. Dan's operation was relatively modest, just
11:00
Speaker 1: a few telephone lines. He kept his head down. But
11:05
Speaker 1: some other operators were not so shy, operators like Rusty
11:09
Speaker 1: and Edy Hardenberg. Rusty and Edy was really big and
11:13
Speaker 1: they had I don't even know how many phone lines
11:16
Speaker 1: they had, and obviously invested a lot of money, and
11:20
Speaker 1: their objective clearly was to make their living after completely
11:25
Speaker 1: Rusty and Edies bulletin board veterans talk of them with
11:29
Speaker 1: a wistful air, and let me give you a clue.
11:33
Speaker 1: Their office was in Youngstown, Ohio, in a little strip
11:36
Speaker 1: mall next to a two pay stall. Rusty Needy were
11:41
Speaker 1: a father and stepmother of Russ, the guy we heard
11:44
Speaker 1: from earlier in the show. They were the family who
11:47
Speaker 1: laid the rules for the way the internet works today.
11:58
Speaker 1: To take a look at this advert I found for
12:02
Speaker 1: Rusty and Needs from a magazine in the early nineties.
12:08
Speaker 1: I'm looking two owls. They're snuggled up Wing to wing.
12:13
Speaker 1: Some text here it says we are the friendliest bbs
12:17
Speaker 1: in the world. Our name says at all. Ed and
12:20
Speaker 1: I are a couple of burnouts from the nineteen sixties.
12:23
Speaker 1: We didn't un like rules then and we don't now.
12:26
Speaker 1: Come on in and relax, you'll be among friends. It's
12:30
Speaker 1: a great copy, isn't it. It's fantastic. You know, this
12:33
Speaker 1: was the Rusty and Edy brand. It was great marketing.
12:37
Speaker 1: It worked. I mean they were the kind of Ben
12:40
Speaker 1: and Jerry's of nineteen eighties home computing. You reached their
12:45
Speaker 1: bulletin board and there was in big green letters, first rule,
12:50
Speaker 1: have fun, Second rule, no more rules, wild and exactly.
12:55
Speaker 1: And you know they would not have thought of themselves
12:59
Speaker 1: as pornographers, not for a second, but almost by accident,
13:03
Speaker 1: they helped define what pawn would become in an online age.
13:09
Speaker 1: So did you manage to speak to them? Rusty passed
13:14
Speaker 1: a few years ago, and I would love to have
13:16
Speaker 1: spoken to him. But I did reach Ed and we
13:20
Speaker 1: had an amazing conversation. But talking about Rusty and Ed's
13:22
Speaker 1: it just brought back too many memories for her, so
13:28
Speaker 1: she didn't want to talk on tape, and instead she
13:30
Speaker 1: put me in touch with her son, Sean McFarland, and
13:34
Speaker 1: he's an Army vet. He runs a chain of convenience stores,
13:39
Speaker 1: and we spoke to him from a garage that looked
13:43
Speaker 1: more like an aircraft hanger. Have you got a helicopter,
13:46
Speaker 1: just a little one. Yeah, yeah, that's that's why I
13:49
Speaker 1: did in the army. So my son and I like
13:52
Speaker 1: to fly around, go have a burger and apart. Sean
13:55
Speaker 1: didn't always run convenience stores and zip around in a helicopter.
13:59
Speaker 1: Growing up. He helps his family run their business. I
14:05
Speaker 1: built the computers in my network, made him cocked each other.
14:11
Speaker 1: He remembers his stepfather, Rusty, as a man of outsized passions.
14:15
Speaker 1: Any hobby would become industry. Their house would fill with
14:18
Speaker 1: cigars or fish tanks. There were fifteen at one point,
14:23
Speaker 1: or big bulky computers, dozens of them. Rusty actually wasn't
14:28
Speaker 1: an old, burned out hippie. He was a retired insurance
14:31
Speaker 1: manager and a lifelong libertarian. He hated being told what
14:38
Speaker 1: to do, not just by governments, but by anyone, frankly,
14:42
Speaker 1: so when he started visiting bulletin boards, you can guess
14:45
Speaker 1: what happened next. So he goes, why don't I start
14:49
Speaker 1: my own with no rules? So he wanted no rules,
14:54
Speaker 1: are free for all, do whatever you want to do.
14:57
Speaker 1: He wasn't the only one. A lot of bulletin board
15:00
Speaker 1: folks were making up rules on the go. Nobody really
15:04
Speaker 1: knew who owned a digital copy of a physical image
15:08
Speaker 1: or a piece of text. A lot of them didn't care. Now, Russ,
15:14
Speaker 1: the harden Burst son who I talked to at the
15:17
Speaker 1: beginning of the show, the one who put the phone
15:19
Speaker 1: down on me. Russ was helping his father Rusty on
15:23
Speaker 1: the software side and handling the fallout from having no rules.
15:27
Speaker 1: When did adult materials start right from the get go?
15:31
Speaker 1: So at first it was just grany scanned photographs, and
15:37
Speaker 1: then they came out with short little gifts which were
15:42
Speaker 1: thirty second mini movies. Did Russ have any qualms about
15:47
Speaker 1: having adult content on the system? Not really. I mean
15:51
Speaker 1: it's a libertarian yet we're not hurting anybody. There are adults.
15:56
Speaker 1: Some came for the game's sex chat and dating. Edie
16:00
Speaker 1: told us that a few people got married after meeting
16:02
Speaker 1: in their forums, but for others, well, Rusty and Dy
16:07
Speaker 1: amassed one of the world biggest collections of digital porn.
16:11
Speaker 1: By nineteen ninety three, Rusty and Needy had hosted roughly
16:15
Speaker 1: three and a half million calls in total, around four
16:18
Speaker 1: thousand on any given day. Calls came in from all
16:21
Speaker 1: over the world, Britain, Saudi Arabia, Japan, and as the
16:26
Speaker 1: business grew, Rusty and Needy had to find space for
16:29
Speaker 1: dozens of computers. First, the equipment filled the bedroom of
16:33
Speaker 1: Rusty's two room apartment, then the hall, then the entire
16:37
Speaker 1: basement of their new home. The servers produced so much
16:41
Speaker 1: heat Rusty installed a four ton air conditioner and it
16:45
Speaker 1: was still like a sauna we had working even in
16:48
Speaker 1: a winner in shorts and a T shirt. It was
16:50
Speaker 1: just hot. I mean he was a good businessman. I
16:54
Speaker 1: mean did he make a lot of money out of this? Oh? Yeah,
16:57
Speaker 1: he did very well. Those overheated servers hosted around nineteen
17:03
Speaker 1: gigabytes of data. These days you carried ten times that
17:06
Speaker 1: data in your pocket. But back then this was like
17:09
Speaker 1: Aladdin's cave. It was getting attention. Some commercial software makers
17:15
Speaker 1: got upset, as did some porn barons. And then there
17:19
Speaker 1: was the FBI Act too, The dangers of moderation. So far,
17:32
Speaker 1: the Rusty and Edy story is a sort of libertarian dream.
17:36
Speaker 1: An entrepreneurial family creates an online space with no rules
17:41
Speaker 1: and builds it into a successful family business. Now we
17:46
Speaker 1: come to the part of the story where the government
17:49
Speaker 1: strikes back. It's a moment so dramatic that even three
17:53
Speaker 1: decades later, Edy couldn't bear to talk about it. The
17:58
Speaker 1: night at the raid, it was my sister's wedding day,
18:02
Speaker 1: and I think they planned it that way so we
18:05
Speaker 1: wouldn't be home. We were all at the reception and
18:08
Speaker 1: my stepbrother Sean had to go back to the house
18:11
Speaker 1: to get something. I was coming home with my girlfriend.
18:15
Speaker 1: I like pulling the driver and I go, WHOA, what's
18:17
Speaker 1: all these cards still in here? And then I walked
18:20
Speaker 1: up to the garage and bunch of guys with the
18:22
Speaker 1: FBI jacket song came and asked me who I was.
18:25
Speaker 1: They kicked the door in and they came in all
18:28
Speaker 1: different directions. Was gigantic. They had guns and they seized everything.
18:33
Speaker 1: They took every computer, every server, everything out of the house.
18:37
Speaker 1: They took all our records, everything we had, they took
18:40
Speaker 1: it all. My father was terrified. They warn't alleged they
18:44
Speaker 1: had illegally distributed software without permission of the copyright owners.
18:48
Speaker 1: But there was more to it than that. By the
18:51
Speaker 1: early nineties, Congress and the FBI had woken up to
18:54
Speaker 1: the digital economy. The press was raising alarm about cyber porn.
19:00
Speaker 1: The FBI wanted to set some boundaries. The government seized
19:05
Speaker 1: the business just because they want to look around and
19:09
Speaker 1: see if we were doing anything wrong. For two and
19:12
Speaker 1: a half years, they took a man's business. All is hardware.
19:16
Speaker 1: You can probably tell from Russ's voice, the memories are
19:19
Speaker 1: still raw for the family. It's the reason Edi wouldn't
19:23
Speaker 1: speak to us. Just thinking back to that day gave
19:26
Speaker 1: her sleepless nights. There was a little point in her
19:28
Speaker 1: life too. I mean the they literally thought they were
19:30
Speaker 1: going to prison. And I mean, I don't care how
19:33
Speaker 1: much money you have, you can't fight Uncle Sam. He's
19:36
Speaker 1: got endless money. Somehow, Rusty and Needy's bulletin board got
19:41
Speaker 1: back online after the FBI swooped. They had backups, they
19:44
Speaker 1: bought new computers, and they had the shopping plaza office.
19:48
Speaker 1: The thing is, there was a second punch, another crisis
19:52
Speaker 1: for the family, one that actually helped create the internet
19:56
Speaker 1: we have today. It came a few months after the
19:59
Speaker 1: raid a lawsuit straight from Hugh Hefner's mansion. The Playboy
20:04
Speaker 1: founder had realized that his pictures were being shared online
20:08
Speaker 1: digital copies and he wasn't being paid, so the heff
20:12
Speaker 1: decided to fight back. He sent a female staffer on
20:15
Speaker 1: an undercover mission. She signed up to Rusty's bulletin board
20:19
Speaker 1: under a fake name, Bob Campbell, and don't we love
20:24
Speaker 1: fake names on this podcast. Her mission to hunt down
20:28
Speaker 1: copied Playboy pigs. You gotta remember, we had maybe one
20:34
Speaker 1: hundred to two hundred thousand images on our servers, and
20:37
Speaker 1: I think they found five. Do you remember which pictures
20:40
Speaker 1: they were? They said, Bo Derek. Playboy actually presented around
20:45
Speaker 1: twenty images to the corps, but it was still a
20:48
Speaker 1: tiny fraction of the pictures available. I like to think
20:52
Speaker 1: they were all of Bow Derek. She was the actress
20:55
Speaker 1: from the movie ten, cast in the role of the
20:57
Speaker 1: Perfect Woman. Dudley Moore dreamed of her bouncing towards him
21:01
Speaker 1: on a beach. Now. Even before the lawsuit, Rusty had
21:05
Speaker 1: a hunch Playboy in particular would come for him someday,
21:10
Speaker 1: so he made his son Russ, screen every uploaded image.
21:13
Speaker 1: He was a gatekeeper, one of the first online moderators,
21:16
Speaker 1: and he told him to keep a particular eye out
21:20
Speaker 1: for Playboy images. Rusty even commissioned software to find Playboy
21:24
Speaker 1: picks and take them down. For the pictures of Bo Derek,
21:28
Speaker 1: they somehow slipped through. Rusty's case settled. His insurance company
21:33
Speaker 1: covered the settlement amount, but this case was remembered for
21:38
Speaker 1: something else. They don't know what digitalized information did. The
21:43
Speaker 1: copyrights still stand for print information. That was a gray area,
21:47
Speaker 1: but the Playboy ruling kind of started the if it's digitalized,
21:52
Speaker 1: it's still under copyright rule. The judge ruled against Rusty
21:58
Speaker 1: precisely because he had asked his son to moderate the uploads.
22:02
Speaker 1: By being responsible by screening every file, Rusty became liable.
22:07
Speaker 1: Suddenly he was a publisher, not just a bulletin board.
22:10
Speaker 1: The thing Rusty to protect the family business actually left
22:14
Speaker 1: them exposed. We didn't think that we would lose because
22:18
Speaker 1: the one thing my father was against was having any
22:22
Speaker 1: pictures of Playboy on our BBS. That was specifically tried
22:29
Speaker 1: for years to keep anything they had to do with
22:32
Speaker 1: Playboy off of our BBS. That's the funny thing about it. Anyway,
22:38
Speaker 1: I guess it's funny, but we thought we had done
22:40
Speaker 1: our due diligence. But evidently the courts thought differently. The
22:45
Speaker 1: moderation was their downfall. If Rusty hadn't checked a thing
22:49
Speaker 1: the people uploading Bow Derek pictures, they would have been
22:52
Speaker 1: on the hook to Playboy, not Rusty. This became an
22:55
Speaker 1: important ruling for digital media. Who owns it, who has
23:00
Speaker 1: a right to share it? Most importantly, can the person
23:03
Speaker 1: running the platform be held liable? When A and M
23:07
Speaker 1: Records and half the US music industry sued file sharing
23:12
Speaker 1: site Napster in two thousand, lawyers in that courtroom reciting
23:17
Speaker 1: Playboy versus Russ Hardenberg, the case against Rusty and Edy.
23:24
Speaker 1: It's so strange to think that the road rules of
23:26
Speaker 1: the Internet were partly laid down in a hot basement
23:29
Speaker 1: in suburban Ohio, a hot basement stacked full of computers,
23:33
Speaker 1: tangled cables, and grainy gifts of pawn. These road rules
23:39
Speaker 1: would be one hell of an important lesson for the
23:41
Speaker 1: next generation of Internet entrepreneurs, for Mark Zuckerberg or Jack Dawsey,
23:47
Speaker 1: but also online pornographers like Fabian Tilman and Bernt berg Meyer.
23:51
Speaker 1: If it was not for Rusty and Edy porn Hub
23:54
Speaker 1: might be run very differently. You can hear the same
23:57
Speaker 1: debate today. You might have heard of big tech's favorite
24:00
Speaker 1: laws to digital Millennial Copyright Act and section two thirty
24:04
Speaker 1: of the Communications Decency Act. Together they effectively given you
24:09
Speaker 1: to platforms like Google or Facebook. It is a tiny
24:12
Speaker 1: law that's had a huge impact on the Internet, as
24:14
Speaker 1: we know at section two thirty of the Communication's Decency Act.
24:17
Speaker 1: Lawmakers on both sides of the eye want to change
24:19
Speaker 1: the way the law works, affecting how content is moderated.
24:22
Speaker 1: Online companies aren't liable for what people say or share
24:26
Speaker 1: on their sites, even if it is illegal. Some critics
24:30
Speaker 1: of the law say that it leaves social media free
24:33
Speaker 1: to ignore lies, hoaxes, and slander that can wreck the
24:38
Speaker 1: lives of innocent people. And the Playboy case against Rusty
24:41
Speaker 1: and Needy it paved the way for that protection on
24:46
Speaker 1: screening and moderation. It's set the legal standard for online media.
24:52
Speaker 1: The big lesson don't screen content through rigorously. It leaves
24:56
Speaker 1: the under hook just deal with the complaints. Rusty's family
25:02
Speaker 1: still feels pretty sore. They were raided, dragged through the courts,
25:07
Speaker 1: punished for moderating the whole FBI ordeal lasted two years
25:13
Speaker 1: without a charge being filed. And all those bowderic pictures
25:17
Speaker 1: you can find them on countless sites these days. So
25:21
Speaker 1: I did it work? Basically you can get right now
25:26
Speaker 1: everything we had on there. If you log in a
25:29
Speaker 1: major search engine and hit image, you can get the
25:32
Speaker 1: same thing. Now, now, are they suing them? The BBS
25:37
Speaker 1: era didn't last for long. By nineteen ninety five, it
25:41
Speaker 1: had been pretty much blown away by the popularity of
25:44
Speaker 1: AOL and the Worldwide Web. That opened a truly libertine
25:49
Speaker 1: era for the Internet and porn, the Great Digital Awakening.
25:55
Speaker 1: After the break, we'll meet one of its stars. Act three,
26:05
Speaker 1: A Web of wander. Meet Madeler Altman. She's talking from
26:10
Speaker 1: her home in Massachusetts, designed by the founder of the
26:14
Speaker 1: Bauhaus movement. Out of the window, I can see fields
26:18
Speaker 1: rolling into the distance. It's a picture of New England tranquility.
26:22
Speaker 1: Was it very intimate doing it over? I mean, oh
26:25
Speaker 1: my god, I can Sometimes I came like five six
26:28
Speaker 1: times a day. I swarked to God, Alex it was
26:30
Speaker 1: so hot. You come on, You're in a private booth
26:34
Speaker 1: and the guys are telling you how gorgeous they are
26:36
Speaker 1: and how sexy you are and you're like great loving this,
26:41
Speaker 1: you know. Madeline is in her late fifties, she has
26:44
Speaker 1: two master's degrees, she speaks five languages, and back in
26:48
Speaker 1: nineteen ninety five, she was one of the first people
26:51
Speaker 1: to create, host, and run a live video conferencing site.
26:55
Speaker 1: It just happens she did it while performing nude. Live
27:00
Speaker 1: video is something many of us use every day for work.
27:03
Speaker 1: It's one of the wonders of the Internet. Madeline's business
27:06
Speaker 1: was the not safe for work kind. Today they're cool
27:09
Speaker 1: cam sites and they're a great money spinner for pawn.
27:12
Speaker 1: Live video is an experience that can't be copied and shared.
27:16
Speaker 1: Madeline stands out because she was doing this. In nineteen
27:18
Speaker 1: ninety five. The World Wide Web had launched, but none
27:22
Speaker 1: of the things we take for granted online were there.
27:25
Speaker 1: Search engines, video streaming, online payments. Everything was an experiment.
27:31
Speaker 1: Nobody had worked out what the Internet was for or
27:34
Speaker 1: how it could be turned into serious money. In other words,
27:38
Speaker 1: nobody ruled cyberspace. And this is where porn had its moment,
27:44
Speaker 1: when people like Madeline became the first colonizers of this
27:47
Speaker 1: online world to understand Madeleine's journey, you have to start
27:51
Speaker 1: with a television series, Madeline's Variety TV MVTV. We have
27:56
Speaker 1: a hot show for you tonight. It's Breast maintenance Day.
28:00
Speaker 1: Does a bra a day help the Sago away? You know?
28:03
Speaker 1: I mean, should you? I read once when I was younger,
28:06
Speaker 1: you should wear a bra every day? This is true?
28:07
Speaker 1: Or that's what you told me. What do you think
28:10
Speaker 1: about this? Do you wear a brano? Not every day?
28:13
Speaker 1: Inspired by anarchists, it ed in San Francisco on the
28:17
Speaker 1: Community Access Channel in the late eighties. MVTV is really
28:21
Speaker 1: really sexy, right, because San Francisco is really really sexy,
28:24
Speaker 1: so we get really wild, you know, like putting wrestling,
28:26
Speaker 1: lesbians having sex on the American flag, and you know,
28:29
Speaker 1: when you're immersed in this world. San Francisco in the
28:31
Speaker 1: late eighties and early nineties was a heavily sexualized culture,
28:36
Speaker 1: and it became super normalized. Right. The show picked up
28:39
Speaker 1: a cult following and earned Madeline scholarship to NYU, So
28:43
Speaker 1: she moved East and enrolled in one of the hippest
28:46
Speaker 1: tech programs around. You had to code whatever was on
28:50
Speaker 1: the Internet with HTML code. So I had to learn
28:53
Speaker 1: that you have to be really precise, very patient. I'm
28:57
Speaker 1: like a hyperactive, crazy, wild producer chick. I Am not
29:00
Speaker 1: someone who's going to sit there and make sure every
29:02
Speaker 1: dot in its place. It drove me mad, But more
29:04
Speaker 1: than anything, the program was about big, brash ideas, and
29:08
Speaker 1: one day of those ideas hit Madeline like the clap
29:11
Speaker 1: of a Whitney Houston solo. She was walking in New
29:14
Speaker 1: York's East Village and thinking back to some old guests
29:17
Speaker 1: on her TV show. I do remember like this whole
29:22
Speaker 1: thing with talking to strippers and about how they loved
29:25
Speaker 1: their job and it was great, but coming back and
29:27
Speaker 1: forth from the clubs, it was so dangerous, and I
29:30
Speaker 1: knew a stripper who had got an attack. I was
29:32
Speaker 1: walking down Second Avenue and I'm like, oh my god,
29:35
Speaker 1: just have them do it online. Just is gonna be
29:38
Speaker 1: like scooping money out of just puddles everywhere, gonna make
29:41
Speaker 1: me so rich, And I'm so altruistic. I get to
29:44
Speaker 1: say it's strippers. I'm just so awesome. Have them do
29:48
Speaker 1: it online. You can just picture her in that street,
29:52
Speaker 1: stopping dead in her tracks. Live video streaming Madeleine had
29:57
Speaker 1: just stumbled on the idea that twenty five years later
30:00
Speaker 1: made our pandemic zoom calls possible. It was a little
30:04
Speaker 1: milestone in tech, Madeleine's lightbulb moment, although they were admittedly
30:10
Speaker 1: just a few small issues with making it a reality.
30:14
Speaker 1: There was no technology, there was no streaming video, but
30:17
Speaker 1: it was charging anything online. But you got to work
30:20
Speaker 1: and soon a site called Babes for You was born.
30:24
Speaker 1: Madeline put what money she had into it, and there
30:28
Speaker 1: wasn't much. She hired a cheap office above a loud
30:31
Speaker 1: Mexican joint, playing the Maccarrena all night long. She found
30:34
Speaker 1: her babes, who had mainly been working as strippers, and
30:38
Speaker 1: in her own words, she hired and fired coders like
30:40
Speaker 1: spinal Tap went through drummers. They first went live that year.
30:45
Speaker 1: You downloaded some software via an eight hundred number, and
30:49
Speaker 1: with that you could play live video. You could chat to,
30:52
Speaker 1: although only by keyboard. Set aside the nudity for a moment.
30:56
Speaker 1: This was a new frontier in online communication, but it
31:00
Speaker 1: was painfully slow. One of the babes didn't show up,
31:05
Speaker 1: and so I went and started performing my helf, which
31:10
Speaker 1: you know was a huge thing for me because I'm like,
31:12
Speaker 1: what am I sex industry worker? Now? Like, I'm a
31:14
Speaker 1: super well educated, supposed tech student. Now I'm just a
31:17
Speaker 1: sex worker. So I just ended up doing it and
31:20
Speaker 1: it was clunky. You know, it was really difficult. A
31:22
Speaker 1: lot of the guys simply didn't know how to use
31:26
Speaker 1: a desktop computer at all. Right, it really did help
31:29
Speaker 1: a lot of strippers. Most of my women were strippers.
31:33
Speaker 1: I think it really expanded the sort of popularized view
31:37
Speaker 1: of what kind of women men wanted. You know, online
31:40
Speaker 1: we found out about all kinds of amazing fetishes. One
31:44
Speaker 1: of the fetishes involved oranges, flying oranges. Apparently it's a
31:50
Speaker 1: Dutch thing. That was really funny. We did have one
31:52
Speaker 1: of these orange people do it, and then she threw
31:54
Speaker 1: an orange and knocked the whole system out. It was hilarious.
31:56
Speaker 1: But talk about controlling reality with your computer. Was the
32:02
Speaker 1: guy wanted oranges thrown at her? Yeah, this is a fetish, Alex,
32:05
Speaker 1: This is a big fetish. There are hundreds of men
32:08
Speaker 1: out there who are really into it. Oh, I'm ready.
32:13
Speaker 1: You know, we have more fun than guys, and they're
32:14
Speaker 1: paying us. Oh, angel girl, you know you're cannibal. The
32:22
Speaker 1: trouble in the early days was that business was slow.
32:26
Speaker 1: Madeline had hired these babes and they were sitting around
32:30
Speaker 1: with nothing to do. Well, first of all, nobody knew
32:32
Speaker 1: it existed. Second of all, people were worry about giving
32:35
Speaker 1: some random number credit card to some people. But you know,
32:38
Speaker 1: ultimately they're intense urge to have sex drove them to
32:43
Speaker 1: trust the internet with credit card chromos and this was
32:45
Speaker 1: never done before. Never, Like people were like, what, what
32:48
Speaker 1: buy something online? Who would do that? That's crazy. I'm
32:51
Speaker 1: not going to buy anything online. Why would I do that?
32:54
Speaker 1: But Madeline had a compelling story. When journalists discovered her,
32:58
Speaker 1: they loved her. Here she is in an interview from
33:01
Speaker 1: this time. We wanted to do something with sex and
33:04
Speaker 1: something with computers because I was hooked up with some
33:06
Speaker 1: people who were involved in the foreign business, and we're
33:09
Speaker 1: involving the computer business as I am myself, and so
33:12
Speaker 1: we thought, well, why don't we do online video sex.
33:15
Speaker 1: It's a great idea. Madeline, who graduated last week with
33:18
Speaker 1: her second master's degree, is in now get this the
33:22
Speaker 1: computer phone sex business. That's right, computer phone sex. After
33:30
Speaker 1: the press reports, the customers started lining up and just
33:33
Speaker 1: remember how mad this sounded to someone in nineteen ninety six.
33:37
Speaker 1: The customers were lining up to pay for things oh
33:40
Speaker 1: the Internet. Madlin even worked out how to charge them
33:43
Speaker 1: by the minute. By the way, this payment system would
33:47
Speaker 1: prove hugely important to the port industry. We'll get into
33:50
Speaker 1: that in later episodes. I mean you were kind of
33:53
Speaker 1: helping people over the threshold in a way, right, in
33:56
Speaker 1: terms of using credit cards, well, yeah, I mean sex
33:58
Speaker 1: is the biggest drive of all right, people will do
34:00
Speaker 1: crazy things for sex, even to use the credit card
34:03
Speaker 1: over the Internet. I mean, basically we invented internet commerce
34:08
Speaker 1: and just keep charging people's credit cards by the minute.
34:11
Speaker 1: This was never done before she performed, and she also
34:15
Speaker 1: acted as an IT help desk. She explained to customers
34:19
Speaker 1: how to switch on their computer or warn them about
34:22
Speaker 1: the CD ROM drive the round hole. No, it's not
34:26
Speaker 1: for holding your coffee cup. People would call like, why
34:29
Speaker 1: doesn't it work. You're like, seriously, it's not plugged in.
34:31
Speaker 1: I don't know what a window is. What do you
34:33
Speaker 1: mean by a window? Like, I don't know how to
34:35
Speaker 1: resize the window. They're like, just drag it from the corner.
34:38
Speaker 1: Madeline's idea that Thunderbolt on Second Avenue was a live
34:42
Speaker 1: sex show online, but in reality she just didn't have
34:46
Speaker 1: the tech to do it. There was no concept of streaming,
34:49
Speaker 1: but with the help of a couple of tech wizards,
34:51
Speaker 1: she figured it out. By nineteen ninety six, they were
34:55
Speaker 1: streaming video directly through a web browser, a technology then
34:59
Speaker 1: called jpeg push. This was the dawn of live camps.
35:04
Speaker 1: Think about your zoom or FaceTime, but back then the
35:08
Speaker 1: breakthrough was literally the digital version of an old animation book,
35:12
Speaker 1: you know, the ones where you flipped through the images
35:14
Speaker 1: which your thumb. We were the first to stream live video.
35:17
Speaker 1: I mean, the live part is the real component here,
35:20
Speaker 1: and that's really where I came in because I've been
35:22
Speaker 1: dealing with live programming for so long. It was a
35:24
Speaker 1: shoe in for me to figure out how to get
35:27
Speaker 1: this live programming through the Internet. While Madeline might not
35:31
Speaker 1: have been the very first, she definitely was one of
35:35
Speaker 1: the first. It was so cutting edge that some people
35:38
Speaker 1: were showing up with no interest in Paul. It's amazing
35:41
Speaker 1: how many customers in the beginning came on not for sex,
35:44
Speaker 1: but to figure out the technology. They were like, wait, okay,
35:46
Speaker 1: how are you doing this? Can you just I will pay?
35:50
Speaker 1: I don't want to see the girl, Just get me
35:51
Speaker 1: the owner, and I need to talk to the programmer
35:54
Speaker 1: and I need to figure out what's going on. Porn
35:58
Speaker 1: was teaching the world how to use the Internet. Sure,
36:02
Speaker 1: I mean people were experimenting with live video, but at
36:05
Speaker 1: that point the people who made it work and made
36:08
Speaker 1: money from it were important, like Madeline's sites, plus a
36:13
Speaker 1: few streamed sex shows from Amsterdam. Madeline, though, didn't stick around.
36:20
Speaker 1: Her adventures in online sex were drawing to a close.
36:23
Speaker 1: She was pregnant, her priorities changed, and she got an
36:26
Speaker 1: offer on Babes for You. It came from a couple
36:29
Speaker 1: of ex insurance salesman from Boston. They got into the
36:34
Speaker 1: world of live video thinking it would be a way
36:36
Speaker 1: to connect financial advices, theither being the largest purveyors of
36:41
Speaker 1: sex worldwide. Madeleine's site became part of a business that
36:46
Speaker 1: launched Float for Free, one of the biggest live camporn sites.
36:50
Speaker 1: Madeleine was happy, though she bought a Bouhou's house with
36:54
Speaker 1: her earnings. She's still there in the house that sex
36:57
Speaker 1: bot and she's proud of what she did in those
37:00
Speaker 1: wild days of online experimentation. Madeleine was in the first
37:05
Speaker 1: generation of Internet entrepreneurs, the first to play with the
37:08
Speaker 1: spell binding potential of the worldwide Web. Madeline's thing was
37:13
Speaker 1: live video, but we could have told you stories of
37:16
Speaker 1: solo performers with amateur scites, swinging couples, credit card swindlers.
37:21
Speaker 1: These were crazy days. One pornographer at the time boasted
37:25
Speaker 1: that she used more bandwidth than all of Central America.
37:29
Speaker 1: It was porn that really pushed for the streaming technology.
37:32
Speaker 1: It was porn that really pushed for all the credit
37:35
Speaker 1: card and online commerce technology. It was us, We're the
37:39
Speaker 1: ones who did it. A chick from NYU. They set
37:47
Speaker 1: the fire. They taught the world about the power of
37:50
Speaker 1: the web, deliberating side and the scary, uncontrolled side. Within
37:55
Speaker 1: a couple of decades, the fire that Madeline's generation started,
38:00
Speaker 1: it became an inferno. The tube sites we told you
38:03
Speaker 1: about they popped up. Porn became ubiquitous, streamed in an
38:07
Speaker 1: instant often for free. Thanks in part to the Playboy
38:11
Speaker 1: court case, owners of sites like Pornhub could host vast
38:15
Speaker 1: amounts of porn without being held to count for any
38:18
Speaker 1: specific video until twenty twenty, that is, when pawn faced
38:24
Speaker 1: an almighty reckoning over illegal content, and pawn Hub's world
38:29
Speaker 1: came crashing down. It was the moment pawn hubs Enemies
38:33
Speaker 1: discovered the Achilles Heel of online pawn. That's our next episode. So,
38:40
Speaker 1: in my opinion, there's two players on this planet that
38:44
Speaker 1: can kill pawn online, and they can literally kill it.
38:47
Speaker 1: And if they decidele they it's dead. It's done, absolutely impossible.
39:01
Speaker 1: Hot Money is a production of The Financial Times and
39:04
Speaker 1: Pushkin Industries. It was written or reported by me Patrician
39:07
Speaker 1: Neilson and me X Barker. Peter Sale is our lead
39:11
Speaker 1: producer and sound designer. Edith Russolo is our associate producer.
39:16
Speaker 1: Our editor is Karen Shakerjie Amanda Kwong is our engineer.
39:22
Speaker 1: Music composition by Pascal Wise, fact checking by Andrea Lopez Kusado.
39:28
Speaker 1: Our executive producers are Cheryl Brumley and Jacob Goldstein. Special
39:33
Speaker 1: thanks to Renee Kaplan and Ruler Kalov at The Financial
39:35
Speaker 1: Times and Mia Lobel, lital Molad, Justine Lang, Julia Barton
39:41
Speaker 1: and Jacob Weisberg at Pushkin Industries. Thank you to a
39:45
Speaker 1: similar Web for providing our web traffic data. If you
39:49
Speaker 1: liked this show, consider subscribing to Pushkin Plus, offering bonus
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Speaker 1: content and ad free listening across our network for four
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Speaker 1: dollars ninety nine a month. Look for the Pushkin Plus
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Speaker 1: channel on Apple Podcasts or at pushkin dot fm. Hope
40:12
Speaker 1: you will know how you give your dread