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