WEBVTT - From Hot Money: Playboy vs. Rusty and Edie 0:00:15.316 --> 0:00:20.996 Pushkin. Hey, it's Jacob Goldstein. We'll have a new episode 0:00:20.996 --> 0:00:23.636 of What's Your Problem for you later this week. In 0:00:23.716 --> 0:00:26.516 the meantime, we're sharing an episode of a new podcast 0:00:26.556 --> 0:00:29.876 called Hot Money. It's a collaboration between Pushkin and The 0:00:29.916 --> 0:00:32.676 Financial Times, and it's about the business side of the 0:00:32.716 --> 0:00:35.836 porn industry. It's a great show, full of insights and 0:00:35.916 --> 0:00:39.796 amazing stories, and this episode in particular seemed like a 0:00:39.876 --> 0:00:42.556 really good fit for What's Your Problem. As you'll hear, 0:00:42.636 --> 0:00:46.516 it's a story all about technological change and entrepreneurs and 0:00:46.556 --> 0:00:49.156 the hard problems they're trying to solve. I hope you'll 0:00:49.156 --> 0:00:54.756 like it. Right before we start, we're two Financial Times 0:00:54.796 --> 0:00:58.956 journalists trying to work out who rules the porn industry. 0:00:59.516 --> 0:01:08.036 So this show has adult themes. I want to take 0:01:08.156 --> 0:01:12.596 you to a suburb shopping plaza in Ohio. It's nineteen 0:01:12.716 --> 0:01:16.076 ninety three. We're in the middle of America's rust belt. 0:01:16.556 --> 0:01:21.676 There's a two paced store place selling furniture, and tucked 0:01:21.716 --> 0:01:26.436 in a corner a little company for interactive computer services. 0:01:27.836 --> 0:01:31.836 I know it sounds ridiculous, but if the Internet has roots, 0:01:32.476 --> 0:01:37.196 they stretched to here, to this modest shopping center in Youngstown, 0:01:37.396 --> 0:01:43.596 Ohio to that corner business. Every social media website you 0:01:43.676 --> 0:01:49.076 visit today, Facebook, Twitter, TikTok. These platforms are able to 0:01:49.076 --> 0:01:53.556 operate in part thanks to them. A family run IT business, 0:01:54.836 --> 0:01:58.276 A family run IT business with what was possibly the 0:01:58.396 --> 0:02:04.956 biggest stash of digital pawn in America. Today's powered anamics 0:02:04.956 --> 0:02:08.716 and porn came from here, straight from that family to 0:02:08.796 --> 0:02:12.316 the most powerful pornographers of the twenty first century, the 0:02:12.356 --> 0:02:16.076 people we've been talking about on this show. And you 0:02:16.116 --> 0:02:18.996 know we told you in previous episodes that the masters 0:02:18.996 --> 0:02:21.436 of the adult tube sites were able to get away 0:02:21.436 --> 0:02:24.916 with making money from other people's content. The answer to 0:02:25.036 --> 0:02:29.276 how lies here and the choices of an Ohio family 0:02:29.716 --> 0:02:34.596 back in the nineties. This family, the Hardenburg's, define what 0:02:34.716 --> 0:02:39.396 it means to moderate content and cyberspace and what happens 0:02:39.396 --> 0:02:44.676 when you go too far. My name is Russell Francis Hardenburg, 0:02:44.796 --> 0:02:47.716 the fourth, and I'm a sales manager at a car dealership. 0:02:48.076 --> 0:02:50.636 Russ is one of two sons who worked at the 0:02:50.676 --> 0:02:54.076 IT business back in the day. When I first called 0:02:54.156 --> 0:02:56.676 him and said I was a journalist, he slammed the 0:02:56.676 --> 0:03:01.716 phone down. I'm so pleased. I tried again after some 0:03:01.836 --> 0:03:05.636 apologetic mumbling. I said to Russ, I want to hear 0:03:05.796 --> 0:03:10.036 how your family changed the history of the Internet, and 0:03:10.156 --> 0:03:14.396 after a pause he replied, Okay, call me after work. 0:03:15.116 --> 0:03:17.916 The Internet was so new that there was some question 0:03:17.996 --> 0:03:22.476 whether you took a book and converted it to text 0:03:23.516 --> 0:03:26.636 where the copyright laws still would that apply to that 0:03:26.956 --> 0:03:38.356 It was just the wild West at first, and that's 0:03:38.396 --> 0:03:41.956 the difference Rust and his family made. Their mistakes helped 0:03:42.036 --> 0:03:46.676 Lady ground rules for an online world. Who owns digital media, 0:03:47.036 --> 0:03:49.916 who has a right to share it, and most importantly, 0:03:50.796 --> 0:03:53.236 how the Mark Zuckerberg's of the world can run online 0:03:53.276 --> 0:03:56.836 platforms to stay off the hook even when illegal content 0:03:56.956 --> 0:04:01.476 is being shared on their sites. I'm Patrician Wilson. I'm 0:04:01.476 --> 0:04:05.756 Alex Barker from Pushkin Industries and The Financial Times. This 0:04:06.276 --> 0:04:43.676 is Whole Money, Act One, a Shared World. Later in 0:04:43.676 --> 0:04:47.236 this episode, Russ and a stepbrother will tell their family 0:04:47.316 --> 0:04:50.756 story pretty much for the first time. It's the story 0:04:50.836 --> 0:04:53.796 that created the ground rules for the modern porn industry. 0:04:55.596 --> 0:04:58.036 But before then, we want to take you further back 0:04:58.076 --> 0:05:02.756 in history to the nineteen eighties, the moment that online 0:05:02.836 --> 0:05:06.436 porn first came into being. Let's meet one of the 0:05:06.476 --> 0:05:11.956 world's first digital pronographers. His name is Dan Lewis. So 0:05:12.876 --> 0:05:19.516 around nineteen eighty I bought my first personal computer. It 0:05:19.676 --> 0:05:23.356 was a Radio Shack TRSA D Model one. It was 0:05:23.356 --> 0:05:26.196 pretty pretty exciting at the time. Your storage device was 0:05:26.236 --> 0:05:29.676 a cassette tape recorder. The TRSA D the biggest name 0:05:29.716 --> 0:05:36.636 in little computers only a radio Shack attending company. As 0:05:36.716 --> 0:05:39.676 far as we can work out, Dan wasn't just one 0:05:39.676 --> 0:05:43.756 of the first online pornographers. He was possibly the first 0:05:43.756 --> 0:05:46.556 one to actually turn a profit from it. He's a 0:05:46.596 --> 0:05:51.196 New Yorker and he looks like a regular boomer, beard, glasses, 0:05:51.596 --> 0:05:54.796 a friendly uncle type. He wasn't easy to find. By 0:05:54.836 --> 0:06:00.116 the way, Dan Lewis is his cover name. Yes, another 0:06:00.156 --> 0:06:03.836 guy with a cover name. Out of desperation, I tried 0:06:03.876 --> 0:06:06.796 an email address from an advert for something called a 0:06:06.836 --> 0:06:11.156 bulletin board. It was from nineteen ninety four, but somehow 0:06:11.596 --> 0:06:16.556 it worked. You could dial up bulletin boards and exchange 0:06:16.756 --> 0:06:21.996 messages with people and you know, find out some technical information. 0:06:22.556 --> 0:06:25.756 Now you might have heard of arper net and usenet, 0:06:26.276 --> 0:06:30.276 the early ways that academics and military types communicated online. 0:06:30.836 --> 0:06:33.956 Bullets and boards used a similar technology, but They were 0:06:34.076 --> 0:06:37.756 for the private world, not just public institutions. Anybody could 0:06:37.836 --> 0:06:41.276 use them. Dan's computer was in his bedroom in Queens. 0:06:42.156 --> 0:06:45.836 The equipment wasn't cheap, and in Dan's case, no university 0:06:45.876 --> 0:06:49.316 or government was paying the bills. He would pick up 0:06:49.316 --> 0:06:51.796 the chunky telephone handset and plug it into an even 0:06:51.796 --> 0:06:56.036 bigger box, the modem. Through the modem, he would then 0:06:56.076 --> 0:06:59.596 dial another computer in some far off place, the bulletin 0:06:59.676 --> 0:07:04.516 Board System or BBS. It was a shared world games, 0:07:04.636 --> 0:07:09.876 basic software, conspiracy theories, bad jokes. If you knew which 0:07:09.916 --> 0:07:12.996 board to dial up and you could master to clunky tech. 0:07:13.876 --> 0:07:17.996 It was all there and young Dan, he was in 0:07:18.076 --> 0:07:21.316 his early twenties. Den he got more and more obsessed. 0:07:21.916 --> 0:07:24.156 He was dining up at eleven o'clock at night to 0:07:24.236 --> 0:07:28.556 keep his meteoric phone bills down. He was broken, barely 0:07:28.596 --> 0:07:33.396 scraping together money for rent. So I started trying to 0:07:33.436 --> 0:07:37.636 think about is there a way I could leverage this 0:07:37.716 --> 0:07:43.276 and supplement my income? Well, what other kinds of BBS 0:07:43.396 --> 0:07:48.036 related services might people pay for? And decided that, you 0:07:48.116 --> 0:07:51.756 know what, the only thing people will pay for is sex. 0:07:52.236 --> 0:07:56.836 People are horny, people are purian, people want to see 0:07:56.876 --> 0:08:00.356 images of other naked people, or they want to see 0:08:00.396 --> 0:08:05.116 them engage in activities that they can't try now, or 0:08:05.236 --> 0:08:07.836 want to try, or have it tried. It's just human nature. 0:08:08.716 --> 0:08:11.756 Back in nineteen eighty four, a bulletin board interface just 0:08:11.876 --> 0:08:16.636 had text bright neon green text, but you could download 0:08:16.676 --> 0:08:21.916 simple images, games, that kind of stuff. Dan's idea was 0:08:21.956 --> 0:08:25.956 to specialize. He wanted to launch a BBS dedicated to 0:08:26.156 --> 0:08:31.756 adult stuff, an erotic platform for the uninhabited. The cool 0:08:31.836 --> 0:08:36.556 started rolling in with hindsight. The technology was laughably basic. 0:08:37.636 --> 0:08:42.116 Dance system Aislenet was running it one thousand, two hundred 0:08:42.116 --> 0:08:47.156 bits per second, not kill a bits, not megabits, just bits. 0:08:48.076 --> 0:08:51.276 So how did it work? Well, you'd sit down at 0:08:51.276 --> 0:08:54.596 your computer, so you'd go to your dialing list. Okay, 0:08:54.596 --> 0:08:56.756 which BBS do I want to call? All right, let's 0:08:56.796 --> 0:08:59.556 call us. When you click on it, and you'll hear 0:08:59.636 --> 0:09:07.436 procom dialing the modem, it'll ring and the modem will answer. 0:09:07.716 --> 0:09:09.756 If you haven't heard what a modems sounds like, it 0:09:09.876 --> 0:09:14.396 sounds a little bit like a fact tone. And you're connected. 0:09:14.476 --> 0:09:16.716 So you'd get a welcome screen and then you might 0:09:16.756 --> 0:09:20.476 get a list of subcategories of files. It's okay, So 0:09:20.556 --> 0:09:24.236 you click on the adult section and then you might 0:09:24.316 --> 0:09:29.316 get another sub menu of women, men, women and men, 0:09:29.716 --> 0:09:32.996 and you pick what you want and it'll download. Now 0:09:33.036 --> 0:09:35.316 the fun begins, zing bing bing bing bing, and it 0:09:35.396 --> 0:09:38.796 ends up on your computer. Then you get to look 0:09:38.796 --> 0:09:43.036 at your picture. Isn't that easy? You had to be 0:09:43.076 --> 0:09:48.676 patient that bing bing bing took minutes, not seconds. But 0:09:49.236 --> 0:09:53.716 for porn, people were willing to wait, and they would 0:09:53.756 --> 0:09:58.556 pay for it. At first, Dan charged ten dollars to subscribers, 0:09:59.156 --> 0:10:02.196 then I one two forty five a year. The checks 0:10:02.236 --> 0:10:05.516 were being mailed to him in the post. It didn't 0:10:05.556 --> 0:10:08.276 take long until Dan was making as much from his 0:10:08.396 --> 0:10:11.156 adult side as he was from his day job. And 0:10:11.276 --> 0:10:14.036 I mean it was tremendous. Those were the best years. 0:10:14.076 --> 0:10:18.556 Those were absolutely the best years. You know what's really 0:10:18.596 --> 0:10:22.636 striking about that time. Pioneers like Dan were on a 0:10:22.676 --> 0:10:25.876 tiny scale revealing what was about to hit us. All 0:10:26.596 --> 0:10:31.116 dirty pictures, software, even the written word. If digital goods 0:10:31.156 --> 0:10:35.076 could be copied, they would be copied NonStop and shared 0:10:35.116 --> 0:10:38.636 far and wide. And the law, well, as we'll tell 0:10:38.636 --> 0:10:41.756 you in a bit, it hadn't caught up yet. In 0:10:41.756 --> 0:10:45.596 this legal no man's land. Dan could become a pornographer 0:10:45.596 --> 0:10:49.516 of swords, all from his bedroom in Queens without ever 0:10:49.596 --> 0:10:52.476 having taken a photo or set foot on a pawn set. 0:10:52.956 --> 0:10:55.956 Even in the age of bulletin boards, people were beginning 0:10:55.956 --> 0:11:00.876 to realize the implications. Dan's operation was relatively modest, just 0:11:00.916 --> 0:11:04.916 a few telephone lines. He kept his head down. But 0:11:05.596 --> 0:11:09.916 some other operators were not so shy, operators like Rusty 0:11:09.956 --> 0:11:13.756 and Edy Hardenberg. Rusty and Edy was really big and 0:11:13.836 --> 0:11:16.316 they had I don't even know how many phone lines 0:11:16.356 --> 0:11:20.316 they had, and obviously invested a lot of money, and 0:11:20.476 --> 0:11:24.636 their objective clearly was to make their living after completely 0:11:25.716 --> 0:11:29.396 Rusty and Edies bulletin board veterans talk of them with 0:11:29.476 --> 0:11:32.676 a wistful air, and let me give you a clue. 0:11:33.196 --> 0:11:36.876 Their office was in Youngstown, Ohio, in a little strip 0:11:36.916 --> 0:11:41.076 mall next to a two pay stall. Rusty Needy were 0:11:41.116 --> 0:11:44.316 a father and stepmother of Russ, the guy we heard 0:11:44.316 --> 0:11:47.516 from earlier in the show. They were the family who 0:11:47.636 --> 0:11:51.596 laid the rules for the way the internet works today. 0:11:58.036 --> 0:12:01.836 To take a look at this advert I found for 0:12:02.276 --> 0:12:07.436 Rusty and Needs from a magazine in the early nineties. 0:12:08.636 --> 0:12:12.076 I'm looking two owls. They're snuggled up Wing to wing. 0:12:13.236 --> 0:12:17.236 Some text here it says we are the friendliest bbs 0:12:17.276 --> 0:12:20.356 in the world. Our name says at all. Ed and 0:12:20.396 --> 0:12:23.356 I are a couple of burnouts from the nineteen sixties. 0:12:23.636 --> 0:12:26.036 We didn't un like rules then and we don't now. 0:12:26.516 --> 0:12:30.116 Come on in and relax, you'll be among friends. It's 0:12:30.116 --> 0:12:33.756 a great copy, isn't it. It's fantastic. You know, this 0:12:33.956 --> 0:12:37.516 was the Rusty and Edy brand. It was great marketing. 0:12:37.716 --> 0:12:40.396 It worked. I mean they were the kind of Ben 0:12:40.436 --> 0:12:45.316 and Jerry's of nineteen eighties home computing. You reached their 0:12:45.316 --> 0:12:50.756 bulletin board and there was in big green letters, first rule, 0:12:50.996 --> 0:12:55.596 have fun, Second rule, no more rules, wild and exactly. 0:12:55.636 --> 0:12:59.116 And you know they would not have thought of themselves 0:12:59.156 --> 0:13:03.356 as pornographers, not for a second, but almost by accident, 0:13:03.436 --> 0:13:08.756 they helped define what pawn would become in an online age. 0:13:09.796 --> 0:13:13.916 So did you manage to speak to them? Rusty passed 0:13:14.076 --> 0:13:16.436 a few years ago, and I would love to have 0:13:16.436 --> 0:13:19.996 spoken to him. But I did reach Ed and we 0:13:20.036 --> 0:13:22.676 had an amazing conversation. But talking about Rusty and Ed's 0:13:22.876 --> 0:13:28.156 it just brought back too many memories for her, so 0:13:28.156 --> 0:13:30.596 she didn't want to talk on tape, and instead she 0:13:30.676 --> 0:13:34.596 put me in touch with her son, Sean McFarland, and 0:13:34.796 --> 0:13:39.036 he's an Army vet. He runs a chain of convenience stores, 0:13:39.636 --> 0:13:43.836 and we spoke to him from a garage that looked 0:13:43.916 --> 0:13:46.436 more like an aircraft hanger. Have you got a helicopter, 0:13:46.596 --> 0:13:49.476 just a little one. Yeah, yeah, that's that's why I 0:13:49.556 --> 0:13:51.916 did in the army. So my son and I like 0:13:52.036 --> 0:13:55.596 to fly around, go have a burger and apart. Sean 0:13:55.876 --> 0:13:59.476 didn't always run convenience stores and zip around in a helicopter. 0:13:59.916 --> 0:14:05.716 Growing up. He helps his family run their business. I 0:14:05.796 --> 0:14:09.916 built the computers in my network, made him cocked each other. 0:14:11.116 --> 0:14:14.676 He remembers his stepfather, Rusty, as a man of outsized passions. 0:14:15.196 --> 0:14:18.796 Any hobby would become industry. Their house would fill with 0:14:18.876 --> 0:14:22.596 cigars or fish tanks. There were fifteen at one point, 0:14:23.236 --> 0:14:28.556 or big bulky computers, dozens of them. Rusty actually wasn't 0:14:28.556 --> 0:14:31.836 an old, burned out hippie. He was a retired insurance 0:14:31.876 --> 0:14:38.076 manager and a lifelong libertarian. He hated being told what 0:14:38.236 --> 0:14:41.796 to do, not just by governments, but by anyone, frankly, 0:14:42.116 --> 0:14:45.596 so when he started visiting bulletin boards, you can guess 0:14:45.716 --> 0:14:49.476 what happened next. So he goes, why don't I start 0:14:49.596 --> 0:14:54.196 my own with no rules? So he wanted no rules, 0:14:54.556 --> 0:14:56.716 are free for all, do whatever you want to do. 0:14:57.556 --> 0:15:00.796 He wasn't the only one. A lot of bulletin board 0:15:00.796 --> 0:15:04.836 folks were making up rules on the go. Nobody really 0:15:04.916 --> 0:15:08.516 knew who owned a digital copy of a physical image 0:15:08.676 --> 0:15:14.356 or a piece of text. A lot of them didn't care. Now, Russ, 0:15:14.716 --> 0:15:17.076 the harden Burst son who I talked to at the 0:15:17.076 --> 0:15:19.636 beginning of the show, the one who put the phone 0:15:19.676 --> 0:15:22.996 down on me. Russ was helping his father Rusty on 0:15:23.036 --> 0:15:27.156 the software side and handling the fallout from having no rules. 0:15:27.796 --> 0:15:31.036 When did adult materials start right from the get go? 0:15:31.916 --> 0:15:37.796 So at first it was just grany scanned photographs, and 0:15:37.836 --> 0:15:41.276 then they came out with short little gifts which were 0:15:42.196 --> 0:15:47.236 thirty second mini movies. Did Russ have any qualms about 0:15:47.276 --> 0:15:51.316 having adult content on the system? Not really. I mean 0:15:51.436 --> 0:15:56.316 it's a libertarian yet we're not hurting anybody. There are adults. 0:15:56.356 --> 0:16:00.156 Some came for the game's sex chat and dating. Edie 0:16:00.196 --> 0:16:02.956 told us that a few people got married after meeting 0:16:02.956 --> 0:16:07.436 in their forums, but for others, well, Rusty and Dy 0:16:07.796 --> 0:16:11.356 amassed one of the world biggest collections of digital porn. 0:16:11.956 --> 0:16:15.116 By nineteen ninety three, Rusty and Needy had hosted roughly 0:16:15.316 --> 0:16:18.196 three and a half million calls in total, around four 0:16:18.236 --> 0:16:21.916 thousand on any given day. Calls came in from all 0:16:21.956 --> 0:16:26.316 over the world, Britain, Saudi Arabia, Japan, and as the 0:16:26.356 --> 0:16:29.676 business grew, Rusty and Needy had to find space for 0:16:29.796 --> 0:16:33.596 dozens of computers. First, the equipment filled the bedroom of 0:16:33.676 --> 0:16:37.756 Rusty's two room apartment, then the hall, then the entire 0:16:37.796 --> 0:16:41.876 basement of their new home. The servers produced so much 0:16:41.916 --> 0:16:45.916 heat Rusty installed a four ton air conditioner and it 0:16:45.956 --> 0:16:48.316 was still like a sauna we had working even in 0:16:48.356 --> 0:16:50.516 a winner in shorts and a T shirt. It was 0:16:50.596 --> 0:16:54.356 just hot. I mean he was a good businessman. I 0:16:54.396 --> 0:16:57.076 mean did he make a lot of money out of this? Oh? Yeah, 0:16:57.116 --> 0:17:02.916 he did very well. Those overheated servers hosted around nineteen 0:17:03.116 --> 0:17:06.316 gigabytes of data. These days you carried ten times that 0:17:06.396 --> 0:17:09.636 data in your pocket. But back then this was like 0:17:09.756 --> 0:17:15.156 Aladdin's cave. It was getting attention. Some commercial software makers 0:17:15.196 --> 0:17:19.676 got upset, as did some porn barons. And then there 0:17:19.756 --> 0:17:32.116 was the FBI Act too, The dangers of moderation. So far, 0:17:32.396 --> 0:17:36.716 the Rusty and Edy story is a sort of libertarian dream. 0:17:36.756 --> 0:17:41.556 An entrepreneurial family creates an online space with no rules 0:17:41.596 --> 0:17:46.636 and builds it into a successful family business. Now we 0:17:46.716 --> 0:17:49.316 come to the part of the story where the government 0:17:49.516 --> 0:17:53.476 strikes back. It's a moment so dramatic that even three 0:17:53.556 --> 0:17:58.516 decades later, Edy couldn't bear to talk about it. The 0:17:58.676 --> 0:18:01.996 night at the raid, it was my sister's wedding day, 0:18:02.716 --> 0:18:05.076 and I think they planned it that way so we 0:18:05.116 --> 0:18:08.716 wouldn't be home. We were all at the reception and 0:18:08.916 --> 0:18:11.316 my stepbrother Sean had to go back to the house 0:18:11.356 --> 0:18:14.956 to get something. I was coming home with my girlfriend. 0:18:15.316 --> 0:18:17.756 I like pulling the driver and I go, WHOA, what's 0:18:17.756 --> 0:18:20.316 all these cards still in here? And then I walked 0:18:20.356 --> 0:18:22.556 up to the garage and bunch of guys with the 0:18:22.556 --> 0:18:25.316 FBI jacket song came and asked me who I was. 0:18:25.676 --> 0:18:28.756 They kicked the door in and they came in all 0:18:28.836 --> 0:18:33.396 different directions. Was gigantic. They had guns and they seized everything. 0:18:33.596 --> 0:18:36.836 They took every computer, every server, everything out of the house. 0:18:37.316 --> 0:18:40.516 They took all our records, everything we had, they took 0:18:40.516 --> 0:18:44.476 it all. My father was terrified. They warn't alleged they 0:18:44.516 --> 0:18:48.396 had illegally distributed software without permission of the copyright owners. 0:18:48.916 --> 0:18:51.676 But there was more to it than that. By the 0:18:51.716 --> 0:18:54.756 early nineties, Congress and the FBI had woken up to 0:18:54.756 --> 0:18:59.676 the digital economy. The press was raising alarm about cyber porn. 0:19:00.796 --> 0:19:05.236 The FBI wanted to set some boundaries. The government seized 0:19:05.236 --> 0:19:09.716 the business just because they want to look around and 0:19:09.716 --> 0:19:12.356 see if we were doing anything wrong. For two and 0:19:12.396 --> 0:19:15.196 a half years, they took a man's business. All is hardware. 0:19:16.676 --> 0:19:19.916 You can probably tell from Russ's voice, the memories are 0:19:19.996 --> 0:19:23.596 still raw for the family. It's the reason Edi wouldn't 0:19:23.596 --> 0:19:26.196 speak to us. Just thinking back to that day gave 0:19:26.196 --> 0:19:28.156 her sleepless nights. There was a little point in her 0:19:28.196 --> 0:19:30.436 life too. I mean the they literally thought they were 0:19:30.436 --> 0:19:33.076 going to prison. And I mean, I don't care how 0:19:33.156 --> 0:19:36.676 much money you have, you can't fight Uncle Sam. He's 0:19:36.676 --> 0:19:41.476 got endless money. Somehow, Rusty and Needy's bulletin board got 0:19:41.476 --> 0:19:44.956 back online after the FBI swooped. They had backups, they 0:19:44.996 --> 0:19:47.996 bought new computers, and they had the shopping plaza office. 0:19:48.716 --> 0:19:52.556 The thing is, there was a second punch, another crisis 0:19:52.556 --> 0:19:56.276 for the family, one that actually helped create the internet 0:19:56.316 --> 0:19:59.036 we have today. It came a few months after the 0:19:59.116 --> 0:20:04.236 raid a lawsuit straight from Hugh Hefner's mansion. The Playboy 0:20:04.276 --> 0:20:07.516 founder had realized that his pictures were being shared online 0:20:08.036 --> 0:20:12.116 digital copies and he wasn't being paid, so the heff 0:20:12.276 --> 0:20:15.796 decided to fight back. He sent a female staffer on 0:20:15.836 --> 0:20:19.836 an undercover mission. She signed up to Rusty's bulletin board 0:20:19.916 --> 0:20:24.196 under a fake name, Bob Campbell, and don't we love 0:20:24.196 --> 0:20:28.316 fake names on this podcast. Her mission to hunt down 0:20:28.356 --> 0:20:34.076 copied Playboy pigs. You gotta remember, we had maybe one 0:20:34.156 --> 0:20:37.756 hundred to two hundred thousand images on our servers, and 0:20:37.836 --> 0:20:40.756 I think they found five. Do you remember which pictures 0:20:40.756 --> 0:20:45.956 they were? They said, Bo Derek. Playboy actually presented around 0:20:45.996 --> 0:20:48.316 twenty images to the corps, but it was still a 0:20:48.316 --> 0:20:52.036 tiny fraction of the pictures available. I like to think 0:20:52.076 --> 0:20:55.036 they were all of Bow Derek. She was the actress 0:20:55.076 --> 0:20:57.476 from the movie ten, cast in the role of the 0:20:57.516 --> 0:21:00.996 Perfect Woman. Dudley Moore dreamed of her bouncing towards him 0:21:01.036 --> 0:21:05.276 on a beach. Now. Even before the lawsuit, Rusty had 0:21:05.276 --> 0:21:09.516 a hunch Playboy in particular would come for him someday, 0:21:10.076 --> 0:21:13.356 so he made his son Russ, screen every uploaded image. 0:21:13.556 --> 0:21:16.556 He was a gatekeeper, one of the first online moderators, 0:21:16.956 --> 0:21:19.836 and he told him to keep a particular eye out 0:21:20.196 --> 0:21:24.476 for Playboy images. Rusty even commissioned software to find Playboy 0:21:24.516 --> 0:21:27.476 picks and take them down. For the pictures of Bo Derek, 0:21:28.396 --> 0:21:33.796 they somehow slipped through. Rusty's case settled. His insurance company 0:21:33.956 --> 0:21:38.596 covered the settlement amount, but this case was remembered for 0:21:38.676 --> 0:21:43.036 something else. They don't know what digitalized information did. The 0:21:43.076 --> 0:21:47.276 copyrights still stand for print information. That was a gray area, 0:21:47.356 --> 0:21:52.876 but the Playboy ruling kind of started the if it's digitalized, 0:21:52.916 --> 0:21:57.836 it's still under copyright rule. The judge ruled against Rusty 0:21:58.276 --> 0:22:01.676 precisely because he had asked his son to moderate the uploads. 0:22:02.036 --> 0:22:06.916 By being responsible by screening every file, Rusty became liable. 0:22:07.716 --> 0:22:10.396 Suddenly he was a publisher, not just a bulletin board. 0:22:10.916 --> 0:22:14.396 The thing Rusty to protect the family business actually left 0:22:14.396 --> 0:22:18.636 them exposed. We didn't think that we would lose because 0:22:18.756 --> 0:22:22.036 the one thing my father was against was having any 0:22:22.076 --> 0:22:29.156 pictures of Playboy on our BBS. That was specifically tried 0:22:29.316 --> 0:22:32.836 for years to keep anything they had to do with 0:22:32.916 --> 0:22:38.236 Playboy off of our BBS. That's the funny thing about it. Anyway, 0:22:38.236 --> 0:22:40.556 I guess it's funny, but we thought we had done 0:22:40.596 --> 0:22:45.276 our due diligence. But evidently the courts thought differently. The 0:22:45.356 --> 0:22:48.996 moderation was their downfall. If Rusty hadn't checked a thing 0:22:49.316 --> 0:22:52.516 the people uploading Bow Derek pictures, they would have been 0:22:52.516 --> 0:22:55.716 on the hook to Playboy, not Rusty. This became an 0:22:55.756 --> 0:23:00.156 important ruling for digital media. Who owns it, who has 0:23:00.156 --> 0:23:03.676 a right to share it? Most importantly, can the person 0:23:03.756 --> 0:23:07.916 running the platform be held liable? When A and M 0:23:07.996 --> 0:23:12.676 Records and half the US music industry sued file sharing 0:23:12.676 --> 0:23:17.356 site Napster in two thousand, lawyers in that courtroom reciting 0:23:17.556 --> 0:23:21.796 Playboy versus Russ Hardenberg, the case against Rusty and Edy. 0:23:24.316 --> 0:23:26.636 It's so strange to think that the road rules of 0:23:26.716 --> 0:23:29.796 the Internet were partly laid down in a hot basement 0:23:29.796 --> 0:23:33.676 in suburban Ohio, a hot basement stacked full of computers, 0:23:33.836 --> 0:23:38.996 tangled cables, and grainy gifts of pawn. These road rules 0:23:39.036 --> 0:23:41.396 would be one hell of an important lesson for the 0:23:41.476 --> 0:23:46.076 next generation of Internet entrepreneurs, for Mark Zuckerberg or Jack Dawsey, 0:23:47.076 --> 0:23:51.036 but also online pornographers like Fabian Tilman and Bernt berg Meyer. 0:23:51.476 --> 0:23:53.876 If it was not for Rusty and Edy porn Hub 0:23:54.076 --> 0:23:57.156 might be run very differently. You can hear the same 0:23:57.196 --> 0:24:00.636 debate today. You might have heard of big tech's favorite 0:24:00.676 --> 0:24:04.596 laws to digital Millennial Copyright Act and section two thirty 0:24:04.636 --> 0:24:08.996 of the Communications Decency Act. Together they effectively given you 0:24:09.396 --> 0:24:12.036 to platforms like Google or Facebook. It is a tiny 0:24:12.076 --> 0:24:13.996 law that's had a huge impact on the Internet, as 0:24:14.036 --> 0:24:17.236 we know at section two thirty of the Communication's Decency Act. 0:24:17.356 --> 0:24:19.316 Lawmakers on both sides of the eye want to change 0:24:19.316 --> 0:24:22.076 the way the law works, affecting how content is moderated. 0:24:22.116 --> 0:24:26.316 Online companies aren't liable for what people say or share 0:24:26.356 --> 0:24:30.396 on their sites, even if it is illegal. Some critics 0:24:30.436 --> 0:24:33.516 of the law say that it leaves social media free 0:24:33.596 --> 0:24:38.516 to ignore lies, hoaxes, and slander that can wreck the 0:24:38.556 --> 0:24:41.956 lives of innocent people. And the Playboy case against Rusty 0:24:41.996 --> 0:24:45.916 and Needy it paved the way for that protection on 0:24:46.076 --> 0:24:50.876 screening and moderation. It's set the legal standard for online media. 0:24:52.116 --> 0:24:56.516 The big lesson don't screen content through rigorously. It leaves 0:24:56.516 --> 0:25:02.396 the under hook just deal with the complaints. Rusty's family 0:25:02.556 --> 0:25:06.916 still feels pretty sore. They were raided, dragged through the courts, 0:25:07.356 --> 0:25:12.596 punished for moderating the whole FBI ordeal lasted two years 0:25:13.276 --> 0:25:17.396 without a charge being filed. And all those bowderic pictures 0:25:17.956 --> 0:25:21.556 you can find them on countless sites these days. So 0:25:21.716 --> 0:25:26.156 I did it work? Basically you can get right now 0:25:26.596 --> 0:25:29.596 everything we had on there. If you log in a 0:25:29.676 --> 0:25:32.716 major search engine and hit image, you can get the 0:25:32.796 --> 0:25:36.996 same thing. Now, now, are they suing them? The BBS 0:25:37.076 --> 0:25:41.436 era didn't last for long. By nineteen ninety five, it 0:25:41.516 --> 0:25:44.516 had been pretty much blown away by the popularity of 0:25:44.596 --> 0:25:49.636 AOL and the Worldwide Web. That opened a truly libertine 0:25:49.716 --> 0:25:54.796 era for the Internet and porn, the Great Digital Awakening. 0:25:55.636 --> 0:26:05.476 After the break, we'll meet one of its stars. Act three, 0:26:05.836 --> 0:26:10.996 A Web of wander. Meet Madeler Altman. She's talking from 0:26:10.996 --> 0:26:14.596 her home in Massachusetts, designed by the founder of the 0:26:14.676 --> 0:26:18.076 Bauhaus movement. Out of the window, I can see fields 0:26:18.236 --> 0:26:22.396 rolling into the distance. It's a picture of New England tranquility. 0:26:22.876 --> 0:26:25.876 Was it very intimate doing it over? I mean, oh 0:26:25.956 --> 0:26:28.156 my god, I can Sometimes I came like five six 0:26:28.196 --> 0:26:30.756 times a day. I swarked to God, Alex it was 0:26:30.836 --> 0:26:33.996 so hot. You come on, You're in a private booth 0:26:34.036 --> 0:26:36.076 and the guys are telling you how gorgeous they are 0:26:36.156 --> 0:26:40.836 and how sexy you are and you're like great loving this, 0:26:41.156 --> 0:26:44.476 you know. Madeline is in her late fifties, she has 0:26:44.476 --> 0:26:48.156 two master's degrees, she speaks five languages, and back in 0:26:48.236 --> 0:26:51.076 nineteen ninety five, she was one of the first people 0:26:51.156 --> 0:26:55.276 to create, host, and run a live video conferencing site. 0:26:55.676 --> 0:27:00.076 It just happens she did it while performing nude. Live 0:27:00.196 --> 0:27:02.916 video is something many of us use every day for work. 0:27:03.076 --> 0:27:05.956 It's one of the wonders of the Internet. Madeline's business 0:27:06.036 --> 0:27:09.036 was the not safe for work kind. Today they're cool 0:27:09.236 --> 0:27:11.836 cam sites and they're a great money spinner for pawn. 0:27:12.316 --> 0:27:15.636 Live video is an experience that can't be copied and shared. 0:27:16.076 --> 0:27:18.476 Madeline stands out because she was doing this. In nineteen 0:27:18.556 --> 0:27:22.276 ninety five. The World Wide Web had launched, but none 0:27:22.276 --> 0:27:24.636 of the things we take for granted online were there. 0:27:25.356 --> 0:27:30.556 Search engines, video streaming, online payments. Everything was an experiment. 0:27:31.236 --> 0:27:34.556 Nobody had worked out what the Internet was for or 0:27:34.596 --> 0:27:38.156 how it could be turned into serious money. In other words, 0:27:38.596 --> 0:27:43.356 nobody ruled cyberspace. And this is where porn had its moment, 0:27:44.116 --> 0:27:47.356 when people like Madeline became the first colonizers of this 0:27:47.516 --> 0:27:51.356 online world to understand Madeleine's journey, you have to start 0:27:51.356 --> 0:27:56.676 with a television series, Madeline's Variety TV MVTV. We have 0:27:56.716 --> 0:28:00.316 a hot show for you tonight. It's Breast maintenance Day. 0:28:00.596 --> 0:28:03.876