WEBVTT - Episode 5: The Billionaire Who Took Down Porn 0:00:15.516 --> 0:00:23.116 Pushkin. We are two journalists from the Financial Times. We've 0:00:23.116 --> 0:00:26.036 spent six months following the money in porn. Our aim 0:00:26.076 --> 0:00:29.036 has been to find out who rules the industry. In 0:00:29.076 --> 0:00:31.836 this episode, we bring you our encounters with some of 0:00:31.876 --> 0:00:35.636 the biggest financial companies in the world and some of 0:00:35.676 --> 0:00:39.316 the most explicit discussions of sex in this series so far. 0:00:39.836 --> 0:00:43.796 So please be aware this is definitely content for adults. 0:00:47.396 --> 0:00:52.556 Previously on Hot Money, a secretive former banker bought mine geek, 0:00:52.836 --> 0:00:56.596 a giant porn company whose flagship site was driven by 0:00:56.756 --> 0:01:00.236 user generated videos. The law allowed mine geek to take 0:01:00.236 --> 0:01:04.436 a hands off approach to moderation, largely avoiding legal liability 0:01:04.636 --> 0:01:07.916 for the content that users posted to their site. That's 0:01:07.956 --> 0:01:10.916 pretty much all the context you need for today's show. 0:01:13.276 --> 0:01:16.676 When we started our investigation into the adult industry, we 0:01:16.796 --> 0:01:21.636 thought online porn was basically unregulated, uncontrollable in a way, 0:01:22.156 --> 0:01:26.476 just too big for any government to handle. But it 0:01:26.596 --> 0:01:31.276 turned out we were wrong, well not entirely. We just 0:01:31.356 --> 0:01:37.516 missed a real story. Remember STORYA the performer and author 0:01:37.516 --> 0:01:42.076 in our first episode, I'm in lagerie and people tip 0:01:42.116 --> 0:01:45.356 me and I take my broth or pull the cups 0:01:45.396 --> 0:01:48.956 down and I jiggle my shoulders while saying thank you. 0:01:49.956 --> 0:01:53.876 Though I get my period and then I have cramps, 0:01:54.316 --> 0:01:57.596 and then I really don't want to be vigorously jiggling, 0:01:58.436 --> 0:02:02.916 but I also want people to know, like, don't tip 0:02:02.956 --> 0:02:07.156 me and be disappointed. We are not doing vigorous behavior tonight. 0:02:07.836 --> 0:02:11.316 And you know, it would be nice to be able 0:02:11.356 --> 0:02:15.516 to say, because I have my period, but I cannot 0:02:15.556 --> 0:02:20.556 because it is a band word. A band word. What 0:02:20.756 --> 0:02:25.756 Stayer is describing here is live video work, and it 0:02:25.836 --> 0:02:32.516 does sound fantastically absurd. Jiggling naked breasts for money no problem. 0:02:32.516 --> 0:02:36.396 Typing the word period in the chat box absolutely forbidden. 0:02:37.396 --> 0:02:41.396 But why what stopped Stawyer from being able to type 0:02:41.396 --> 0:02:45.956 the word period into a chat box? Who or what 0:02:46.796 --> 0:02:49.556 was on the other end of that rule. The answer 0:02:49.596 --> 0:02:53.356 to that question took us to a place we never expected. 0:02:54.916 --> 0:02:57.756 In this series, so far, we've told you about the 0:02:57.796 --> 0:03:01.316 secretive owners of big porn companies like mine Geek, how 0:03:01.356 --> 0:03:04.396 they thrived in large part because of the taboos around porn. 0:03:05.116 --> 0:03:09.236 It gave them the cover to hide from scrutiny and accountability. 0:03:10.356 --> 0:03:13.916 But around two years ago, Mine Geek faced a reckoning. 0:03:14.676 --> 0:03:19.156 It was brutal, It was public, and it revealed a 0:03:19.156 --> 0:03:21.436 whole lot of things about power and control in the 0:03:21.516 --> 0:03:26.516 porn industry. One day in December twenty twenty, mine Geek 0:03:26.556 --> 0:03:29.796 went from being the most powerful company in porn to 0:03:29.876 --> 0:03:33.036 a business cowering under pressure on the brink of collapse. 0:03:41.076 --> 0:03:44.036 In this episode, we're going to tell you how all 0:03:44.036 --> 0:03:47.316 of that happened, the chain of events that forced mine 0:03:47.316 --> 0:03:52.676 Geek to take the majority of its pawn offline. Mine Geek, 0:03:53.076 --> 0:03:55.676 just like Stayer, had to bow to one of the 0:03:55.716 --> 0:04:02.156 most powerful finance companies in the world. I'm Patrician Nelson 0:04:02.436 --> 0:04:05.556 and I'm Alex Barker and from Pushkin Industries and the 0:04:05.636 --> 0:04:41.796 Financial Times. This is Hot Money Act one. Mister persistence. 0:04:46.036 --> 0:04:48.156 I think we're known to be a good investor. We're 0:04:48.276 --> 0:04:52.236 known for not being shy, willing to kind of share 0:04:52.316 --> 0:04:57.556 our views. I've been called the most persistent person in America. 0:04:57.676 --> 0:05:01.956 I take as a compliment. That's Bill Lackman. He's a 0:05:01.996 --> 0:05:04.876 big name in the land of the Financial Times, and 0:05:05.036 --> 0:05:08.556 not just because he's a billionaire. He runs an investment 0:05:08.596 --> 0:05:12.156 firm called Pershing Square, and it's one of those firms 0:05:12.196 --> 0:05:16.316 that everybody knows about on Wall Street. Bill is not 0:05:16.596 --> 0:05:20.756 an investor in Pawn. On the contrary, during the pandemic, 0:05:20.836 --> 0:05:24.316 Bill pulled off one of the most insanely successful trades 0:05:24.556 --> 0:05:27.636 in the history of modern financial markets. He turned a 0:05:27.676 --> 0:05:31.396 twenty seven million dollar bet into roughly a two point 0:05:31.476 --> 0:05:35.676 six billion dollar windfall. Yeah, as around a hundred times 0:05:35.676 --> 0:05:39.796 the money within a few weeks. Not bad. It doesn't 0:05:39.796 --> 0:05:43.836 always go that well. He does sometimes lose two in 0:05:43.996 --> 0:05:48.716 an almost as spectacular of fashion. Anyway. Bill first made 0:05:48.716 --> 0:05:51.796 his name as an activist investor. He didn't just buy 0:05:51.876 --> 0:05:55.036 shares in a company. He bought big stakes and then 0:05:55.036 --> 0:05:59.396 told chief executives what to do, and occasionally he even 0:05:59.436 --> 0:06:04.236 tried to kick them out. So when he shouts, people listen. 0:06:04.916 --> 0:06:08.076 What made him agree to talk to us about pawn 0:06:08.516 --> 0:06:13.036 of all things? Good? Question? His communications person asked him 0:06:13.076 --> 0:06:15.196 the same thing, said, Bill, do you want to do 0:06:15.236 --> 0:06:18.236 this be interviewed by the ft or whatever people just 0:06:18.276 --> 0:06:20.356 think reputationally. I don't want to have anything to do 0:06:20.436 --> 0:06:22.836 with I don't want my name and the word porn 0:06:22.956 --> 0:06:26.996 in the same paragraph or story. And the problem with 0:06:27.076 --> 0:06:30.476 that is it a lot of bad things can happen 0:06:30.636 --> 0:06:38.676 in the underground, and those bad things he saw them 0:06:38.676 --> 0:06:41.916 in December twenty twenty, when The New York Times published 0:06:41.916 --> 0:06:45.676 a powerful column by Nicholas Kristoff. It was titled The 0:06:45.836 --> 0:06:49.876 Children of Pornhub. Bill was sitting at home scrolling on 0:06:49.916 --> 0:06:53.916 Twitter when a story popped up. This Christoph article about 0:06:53.996 --> 0:06:59.836 porn Hub I found very challenging to read and depressing 0:06:59.876 --> 0:07:03.876 and also made me angry. Bill has four daughters, and 0:07:04.076 --> 0:07:08.956 the appalling accounts of exploitation hidd a nerve Christoph basically 0:07:09.236 --> 0:07:12.476 pulled pawn Hubb apart. He alleged the free pawn sign 0:07:12.676 --> 0:07:17.636 was infested with rape videos, and through talking to victims, 0:07:17.636 --> 0:07:21.516 he depicted it as a business that monetized spy cams, 0:07:21.756 --> 0:07:26.316 revenge pawn, and other horrid stuff. Recent allegations claimed porn 0:07:26.396 --> 0:07:30.636 Hub maybe profiting from footage of sexual assault, revenge porn, 0:07:30.796 --> 0:07:34.996 and sex tapes obtained without consent from those embarked accused 0:07:35.036 --> 0:07:38.476 of hosting sexual assault footage as well as child sexual 0:07:38.476 --> 0:07:42.516 abuse material, doing little to guard against and remove such content. 0:07:43.236 --> 0:07:47.596 Canadian Prime Minister Justin Trudeau also took notice, saying his 0:07:47.756 --> 0:07:51.196 government was working with police and security officials to address 0:07:51.276 --> 0:07:53.956 the issues raised in the New York Times column. Everyone 0:07:53.996 --> 0:07:56.916 in pawn just refers to it as the Christophe piece. 0:07:57.356 --> 0:08:02.276 It was part investigation, part opinion column, and hugely contentious 0:08:02.276 --> 0:08:05.556 in the industry. Even people who hate pawn Hub saw 0:08:05.596 --> 0:08:10.236 it as part of a broader war on pawn mine 0:08:10.276 --> 0:08:14.996 geek executives. The owners of porn Hub denied wrongdoing, insisting 0:08:15.036 --> 0:08:19.276 they took a zero tolerance approach to illegal content. Pornhub 0:08:19.356 --> 0:08:23.156 told us that they now have more comprehensive safeguards than 0:08:23.276 --> 0:08:27.276 most social media platforms. Now, we're not going to get 0:08:27.356 --> 0:08:29.876 into the details of the piece or who was right 0:08:29.996 --> 0:08:34.716 or wrong. We looked at the impact instead. There's no 0:08:34.836 --> 0:08:41.036 argument over that, partly because of Bill Atman. You can 0:08:41.236 --> 0:08:44.196 destroy a fifteen year old and get them to commit 0:08:44.196 --> 0:08:48.716 suicide by just having her boyfriend share a video she 0:08:48.716 --> 0:08:51.196 didn't want to see, an embarrasser in front of everyone. 0:08:51.516 --> 0:08:54.676 People kill themselves over the kids do and the notion 0:08:54.836 --> 0:09:02.156 that people are profiting from this. You know that got me. Now. 0:09:02.516 --> 0:09:05.756 Bill is no prude. He's not a posed to pornography. 0:09:06.596 --> 0:09:09.796 He's a free speech advocate. But he was so moved 0:09:09.796 --> 0:09:12.356 by the stories in the article that he decided to 0:09:12.396 --> 0:09:16.716 do something. I thought this is important and the problem 0:09:16.756 --> 0:09:19.756 with the topic of pornography is. People don't want to 0:09:19.756 --> 0:09:23.516 acknowledge of every even viewed pornography, perhaps, and so it's 0:09:23.516 --> 0:09:26.756 just easier to just let it pass. Bill made his 0:09:26.876 --> 0:09:30.476 name in the business of corporate influence. His whole stick 0:09:30.916 --> 0:09:33.996 was forcing companies to do things they don't want to do, 0:09:34.716 --> 0:09:38.036 and he comes armed with the deep contact book he'd 0:09:38.036 --> 0:09:42.316 expect of an American billionaire. He's also a finance guy, 0:09:42.636 --> 0:09:44.836 so when he read the New York Times piece, he 0:09:44.876 --> 0:09:47.476 didn't just get angry and think what can I say 0:09:47.476 --> 0:09:50.876 to make politicians do something? He thought about the way 0:09:50.916 --> 0:09:57.756 to kick a company where it hurts payments. He knew 0:09:57.796 --> 0:10:00.996 that vis unmaster card are the rails that any digital 0:10:01.036 --> 0:10:05.076 business depends on to sell online. While so much online 0:10:05.116 --> 0:10:09.636 porn is free, big porn companies rely on premium sites. 0:10:10.276 --> 0:10:14.196 They either own them or sell ads for them. They 0:10:14.356 --> 0:10:17.636 do need people to pay for porn, and how do 0:10:17.716 --> 0:10:23.556 they do that again credit cards without payment processing. These 0:10:23.596 --> 0:10:28.756 aren't just porn companies. They are failing porn companies. But 0:10:28.796 --> 0:10:31.796 he also realized there are good reasons why the payments 0:10:31.836 --> 0:10:35.476 industry sticks with high risk sectors like porn. The more 0:10:35.596 --> 0:10:40.116 dice into transaction, the higher the scrape, meaning the fees 0:10:40.156 --> 0:10:43.516 are higher and so the profit margins are better. There 0:10:43.596 --> 0:10:46.676 was no guarantee he could get the big payment networks 0:10:46.676 --> 0:10:51.836 to do anything, so he went full actman. He didn't 0:10:51.876 --> 0:10:55.756 bother with a polite campaign or letters or whatever. He 0:10:55.916 --> 0:11:00.316 just picked up his phone and messaged Aja Banger. Now 0:11:00.396 --> 0:11:04.356 Banger was the chief executive of master Card at the time. 0:11:05.036 --> 0:11:07.356 You both you're packing for tennis, and I've met him 0:11:07.356 --> 0:11:09.476 and made a couple of big tennis tape and it 0:11:09.556 --> 0:11:13.036 texts this to them, and I said, a please read 0:11:13.076 --> 0:11:16.876 the above piece. MasterCard is facilitating sex trafficking. PayPal is 0:11:16.916 --> 0:11:20.396 already withdrawn payment processing from Pornhoub. MasterCard does not want 0:11:20.436 --> 0:11:22.756 to be the last company to do so. Please call 0:11:22.796 --> 0:11:27.236 and discuss if you disagree, Banger replied immediately. High Bill 0:11:27.676 --> 0:11:32.036 just saw this, he wrote, before effectively laying down the law. 0:11:32.716 --> 0:11:36.396 If the allegations were proven, Banger wrote, Pornhub would be 0:11:36.396 --> 0:11:41.116 blocked from using MasterCard mine Geek's top site would be 0:11:41.156 --> 0:11:44.476 partly cut off from the payments world to his credit. 0:11:44.556 --> 0:11:48.516 MasterCard very very quickly got on top of this and 0:11:48.836 --> 0:11:53.716 came up with some pretty strong principles. MasterCard acted after 0:11:53.756 --> 0:11:57.996 its investigation found unlawful content. It banned the use of 0:11:58.036 --> 0:12:02.236 its credit cards on Pornhub's premium site. Visa followed by 0:12:02.356 --> 0:12:06.036 suspending not just Pornhub but all of mine geek sites. 0:12:06.596 --> 0:12:09.356 It basically cut off the use of its credit cards 0:12:09.396 --> 0:12:13.556 on premium websites that generate about half of mine Geek's 0:12:13.596 --> 0:12:18.556 revenue subscriptions that are paid for by credit cards. We 0:12:18.756 --> 0:12:22.236 reached out to Visa, unmaster Card, and both the kind 0:12:22.276 --> 0:12:26.756 to be interviewed. The company stressed that their priorities are 0:12:26.836 --> 0:12:32.156 to support commerce and illegal activity, but it is fair 0:12:32.196 --> 0:12:36.636 to say these payment networks hardly ever remove a company 0:12:36.676 --> 0:12:41.956 from their systems. It's a devastating move and the consequences 0:12:41.956 --> 0:12:47.036 were immediate. You might be wondering why free porn sites 0:12:47.316 --> 0:12:52.156 would crumble because Visa or MasterCard stop them accepting credit cards. 0:12:52.676 --> 0:12:56.516 On the face of it, Tube sites are mostly ad funded, 0:12:56.956 --> 0:13:01.076 but they are indirectly tied to bank rules. There are 0:13:01.116 --> 0:13:04.596 a few reasons for that. They run subscription tiers like 0:13:04.796 --> 0:13:08.996 pawn Hub Premium. Some advertisers use credit cards to pay 0:13:09.276 --> 0:13:12.196 the Tube sites, and a lot of the Tube site 0:13:12.196 --> 0:13:16.356 ad money comes from pay sites that are covered by 0:13:16.476 --> 0:13:20.356 Visa and MasterCard. Rules, and for that reason. An industry 0:13:20.356 --> 0:13:24.076 insider told us that some of pawn hubs advertisers got 0:13:24.116 --> 0:13:28.596 cold feet about spending money with them. The result was 0:13:28.636 --> 0:13:33.156 that pawn hubs cash flow dried up overnight. That triggered 0:13:33.596 --> 0:13:39.436 all sorts of other problems. Just imagine the conversation with 0:13:39.636 --> 0:13:43.596 long term subscribers. You know that pawn company you signed 0:13:43.636 --> 0:13:47.196 up to a few years ago, Well, we'd really like 0:13:47.316 --> 0:13:50.076 you to subscribe again. You just need to go through 0:13:50.236 --> 0:13:53.796 all the hassle once more, but this time, please use 0:13:53.836 --> 0:13:57.876 bitcoin or some other complex banking process instead of your 0:13:57.916 --> 0:14:02.876 credit card. The MasterCard move, which was then followed by Visa, 0:14:03.196 --> 0:14:07.236 was genuinely a watershed moment for the adult industry. Bill's 0:14:07.276 --> 0:14:11.116 intervention wasn't the only reason it happened, but with that text, 0:14:11.596 --> 0:14:14.556 it's not hard to imagine he helped tip the balance. 0:14:15.276 --> 0:14:18.396 The suspension happened very quickly, and within a couple of 0:14:18.436 --> 0:14:21.156 weeks they announced a bunch of policies. Was really quick 0:14:21.316 --> 0:14:24.596 and impressive. A few days after all of this, something 0:14:24.596 --> 0:14:27.876 else huge happened to mine geek, the parent company of Pornhub. 0:14:28.476 --> 0:14:32.276 Its lenders served at the notice of default a warning 0:14:32.516 --> 0:14:35.356 that mine Geek wasn't meeting the conditions of its loan. 0:14:36.236 --> 0:14:39.396 This hasn't been reported before. We heard about it from 0:14:39.436 --> 0:14:42.156 a different billionaire who was approached to buy the company, 0:14:42.676 --> 0:14:45.236 and it is confirmed and a footnote buried in mine 0:14:45.236 --> 0:14:49.436 Geek's latest accounts. The company was running short of cash, 0:14:49.516 --> 0:14:53.236 its lenders weren't happy. It was on a brink of collapse. 0:14:53.956 --> 0:14:57.316 At the same time, MasterCard was reviewing its policies for 0:14:57.356 --> 0:15:01.676 the whole pawn industry, including what permissions you needed to 0:15:01.796 --> 0:15:05.876 upload any explicit video onto a site that uses credit cards, 0:15:06.476 --> 0:15:11.076 basically all those amateur uploads that helped tube sites dominate 0:15:11.116 --> 0:15:15.236 the pawn industry. The pressures on myne geek were building. 0:15:15.996 --> 0:15:19.756 It had to do something, and just like that, pawn 0:15:19.836 --> 0:15:24.356 Hub went from thirteen million videos down to four million. 0:15:25.716 --> 0:15:29.076 You probably were a catalyst for one of the biggest 0:15:29.276 --> 0:15:33.836 takedowns of media content off the web in the history 0:15:33.876 --> 0:15:36.436 of the Internet. When a nine million videos ever been 0:15:36.476 --> 0:15:39.916 taken down overnight, it's pretty extraordinary. Do you remember that 0:15:39.956 --> 0:15:42.196 moment and how did you feel? I felt good about it. 0:15:43.116 --> 0:15:45.316 It's not good. People want to make their livelihood the 0:15:45.316 --> 0:15:48.196 way they make their livelihood. It's their life, their body, 0:15:48.276 --> 0:15:52.116 their choice. I'm okay with it. As long as you 0:15:52.156 --> 0:15:55.676 know they're a consenting adult, It's fine. It was pretty 0:15:55.876 --> 0:15:59.436 interesting talking to Bill about the adult business. His game 0:15:59.956 --> 0:16:03.036 is taking the measure of a company, its strength and 0:16:03.076 --> 0:16:08.036 its weaknesses, and here he was sizing up pawn. It 0:16:08.076 --> 0:16:11.716 isn't a huge industry compared with the larger world of 0:16:11.756 --> 0:16:16.156 online entertainment. At its peak, mine Geek made around four 0:16:16.236 --> 0:16:19.956 hundred and fifty million dollars a year in revenue. Just 0:16:20.036 --> 0:16:24.596 for perspective, Netflix generates more than four hundred and fifty 0:16:24.636 --> 0:16:29.036 million during an average week. But online pawn can be 0:16:29.516 --> 0:16:33.396 highly profitable, and those profits have drawn in Wall Street 0:16:33.436 --> 0:16:36.956 over the years, as we've discovered in this series. To 0:16:37.076 --> 0:16:40.276 Bill Ackman, the amazing thing is not that pawn has 0:16:40.316 --> 0:16:43.876 access to finance. It's that Wall Street types got into 0:16:43.916 --> 0:16:47.556 bed with companies like mine geek while averting your eyes 0:16:47.636 --> 0:16:51.796 from potential problems, and when things went wrong, it was 0:16:51.876 --> 0:16:55.476 left to payment companies to marp up the mess. It 0:16:55.596 --> 0:17:01.836 should be regulated by state actors, you would think, right, 0:17:02.036 --> 0:17:05.636 But my experience waiting around for the government to act 0:17:05.876 --> 0:17:13.156 to clean up is painfully slow acratic. There are tens 0:17:13.196 --> 0:17:16.796 of millions of sex videos online hosted in dozens of countries. 0:17:17.796 --> 0:17:20.876 Unless we all take a Chinese approach to censorship, no 0:17:21.036 --> 0:17:24.236 government can really police who watches it or control what 0:17:24.396 --> 0:17:28.956 is made. So the nearest thing to setting global rules 0:17:28.956 --> 0:17:33.916 for porn would come from mastercardam Visa, because without MasterCard 0:17:33.956 --> 0:17:37.676 and Visa there just isn't much point in making porn 0:17:38.356 --> 0:17:40.436 because no one can buy it. I think there should 0:17:40.436 --> 0:17:42.996 be the factor of regulating these companies. Right, They're not 0:17:42.996 --> 0:17:45.836 going to let you use a credit card to pay 0:17:45.876 --> 0:17:49.236 for a hit on someone, right, That I'm sure is 0:17:49.276 --> 0:17:52.236 against their principles. Right. So once you decide that you're 0:17:52.236 --> 0:17:54.476 going to decide what people can spend their money on 0:17:54.476 --> 0:17:56.876 and what they can charge the master card for or 0:17:56.916 --> 0:17:59.716 the Visa card, who should focus? Then they have to 0:17:59.756 --> 0:18:03.076 be the factor regulators or what's permissible content and what's not. 0:18:04.556 --> 0:18:08.556 There was one more important thing that Bill didn't realize. 0:18:09.236 --> 0:18:13.116 He texted the head of MasterCard he wanted MasterCard to 0:18:13.156 --> 0:18:16.996 act like a regulator for pawn. But after we dug 0:18:17.036 --> 0:18:21.156 into this, we found payment companies were already involved in 0:18:21.236 --> 0:18:24.916 setting the rules for this industry. They don't like admitting 0:18:24.956 --> 0:18:28.396 to this role, but banks and payment companies do have 0:18:28.476 --> 0:18:31.596 a real say in what kind of pawn gets made 0:18:31.796 --> 0:18:44.676 and sold online act too the list. Some of you 0:18:44.796 --> 0:18:47.556 may have heard about the Haze Code back in the 0:18:47.636 --> 0:18:51.356 nineteen thirties, in the early days of Hollywood. The Haze 0:18:51.356 --> 0:18:54.516 Code set the standards for what you could and couldn't 0:18:54.556 --> 0:19:01.596 depict on screen. No lustful kissing, no nudity, no interracial relationships, 0:19:01.996 --> 0:19:06.236 no perversion whatever that meant. It was all self policed 0:19:06.276 --> 0:19:10.316 by the industry and amazingly held in place well into 0:19:10.356 --> 0:19:15.036 the nineteen sixties. It all sounds so strange today, like 0:19:15.236 --> 0:19:19.836 something from a bygone age, and what has this got 0:19:19.836 --> 0:19:23.036 to do with online pawn. Well, when we saw the 0:19:23.116 --> 0:19:26.836 power of Visa and MasterCard had over mind geek, we 0:19:26.916 --> 0:19:30.436 wanted to understand how they could bring the world's biggest 0:19:30.476 --> 0:19:36.036 adult company to its knees. What we discovered is that 0:19:36.076 --> 0:19:39.196 the world of porn might just have its own version 0:19:39.516 --> 0:19:42.436 of the Haze Code. There's a really curious system of 0:19:42.516 --> 0:19:47.036 rules rules on porn contents, not enforced by porn producers, 0:19:47.076 --> 0:19:52.756 but financial gatekeepers the payments world, a world ultimately overseen 0:19:52.876 --> 0:19:56.916 by Visa and MasterCard. We realized this sounds odd, it 0:19:57.076 --> 0:20:01.396 is odd, and it raised more questions than answers. I 0:20:01.476 --> 0:20:04.356 remember the moment the door to this world was open 0:20:04.436 --> 0:20:07.316 for me. I was just chatting with an executive in 0:20:07.316 --> 0:20:11.756 the industry and she mentioned these lists basically dos and 0:20:11.836 --> 0:20:15.876 don't for pawn production. So I asked her to dig 0:20:15.916 --> 0:20:20.156 one up and she shared a document of best practices, 0:20:20.636 --> 0:20:26.116 all compiled by a company called Mobius Pay. Now. Mobius 0:20:26.356 --> 0:20:29.676 is a payment processing company. If you're a business that 0:20:29.716 --> 0:20:32.236 wants to take credit cards, you need a bank to 0:20:32.236 --> 0:20:36.756 sponsor you a merchant account. Mobius helps to sort that out. 0:20:37.156 --> 0:20:41.236 It acts as a bridge between high risk businesses like cannabis, 0:20:41.276 --> 0:20:45.196 pawn or gambling and banks in the visa and MasterCard system. 0:20:46.596 --> 0:20:50.996 John Corona is Mobius Pay's chief operating officer, and he 0:20:51.076 --> 0:20:54.796 put together that one page primer of things to avoid. 0:20:55.556 --> 0:21:01.116 We asked him to read a sample of problematic words twink, nymphet, 0:21:01.236 --> 0:21:05.036 any racial slur or symbol, and team. You know these 0:21:05.156 --> 0:21:09.956 specific words tend to create problems. Problems with two where 0:21:09.956 --> 0:21:16.476 the visa and master card, the acquiring bank, and if 0:21:16.516 --> 0:21:19.996 it goes far enough, ultimately law enforcement. When you sit 0:21:20.076 --> 0:21:23.636 down to create this list, you know what you based 0:21:23.676 --> 0:21:30.356 at on the list, and the words are in the 0:21:30.476 --> 0:21:34.436 interest of protecting the Visa and master Card brand reputation. 0:21:36.836 --> 0:21:39.116 This was a lot for us to get our head around. 0:21:39.796 --> 0:21:42.996 The more we ask people about these pawn lists, the 0:21:43.036 --> 0:21:47.476 more we realize they are almost talmudic in nature. Visa 0:21:47.596 --> 0:21:50.916 and MasterCard are at the center of this credit card world. 0:21:51.276 --> 0:21:55.276 They sit down some broad guidelines on material that might 0:21:55.316 --> 0:21:58.756 be legal, but just as in't kosher, stuff that doesn't 0:21:58.756 --> 0:22:02.716 fit with their brand and the banks some payment processors, 0:22:02.756 --> 0:22:07.716 like John at Mobia's they are expected to flesh that out. Now, 0:22:08.116 --> 0:22:10.556 they don't have much to work on, not even ten 0:22:10.636 --> 0:22:14.796 commandments they get about five. MasterCard sums it up in 0:22:14.836 --> 0:22:18.516 just one short paragraph. They are against the sale of 0:22:18.556 --> 0:22:22.396 an image or service that is patently offensive or lacks 0:22:22.396 --> 0:22:27.516 serious artistic value. They ban videos involving miners, animals, mutilation, 0:22:27.676 --> 0:22:32.556 or non consensual behavior. Now that all sounds reasonable, but 0:22:32.836 --> 0:22:36.596 just to make sure they are never wrong, MasterCard also 0:22:36.636 --> 0:22:40.796 says they ban any other material that master Card might 0:22:40.876 --> 0:22:47.836 find unacceptable in the future. Genius people like John they 0:22:47.956 --> 0:22:51.396 need to make fine distinctions on what Visa MasterCard allow 0:22:51.716 --> 0:22:55.436 and don't allow. Write down to a twink, which means 0:22:55.556 --> 0:22:58.956 a slim, young looking gay man, do you have conversations 0:22:58.996 --> 0:23:01.276 with Visan master Card? Do you? I mean, do you 0:23:01.276 --> 0:23:02.996 have sit down with them or talk to them on 0:23:02.996 --> 0:23:07.716 the phone. I were saying what you think about Twink? Oh? Absolutely, Yeah, 0:23:07.876 --> 0:23:11.196 someone complains to the card brands. They take it very 0:23:11.196 --> 0:23:15.436 seriously and they will review your content and if they 0:23:15.676 --> 0:23:19.316 find something they disagree with, they could terminate your account 0:23:19.516 --> 0:23:22.156 effective immediately. Could you call it a type of self 0:23:22.196 --> 0:23:25.156 censorship in the porn industry then, I mean you have 0:23:25.516 --> 0:23:29.756 performers who are not doing certain things, not showing certain 0:23:29.836 --> 0:23:36.956 things because you know someone might cut them off. Correct. Yeah, 0:23:37.196 --> 0:23:42.276 it's a self censorship and self policing. Ultimately, it's if 0:23:42.276 --> 0:23:44.316 you want to accept the sound master Card, then you 0:23:44.356 --> 0:23:48.636 have to follow their rules. John explained that Visa and 0:23:48.756 --> 0:23:52.396 MasterCard have had rules on what pawn can and can't 0:23:52.436 --> 0:23:55.756 be sold online for more than a decade. It's just 0:23:55.876 --> 0:23:59.316 that since the Christophe piece, they are all much more 0:23:59.356 --> 0:24:04.196 active in policing them. John says MasterCard has entire teams 0:24:04.236 --> 0:24:09.076 devoted to this, conducting investigations and reviews. Other tech companies 0:24:09.316 --> 0:24:13.476 are also hired to cruel websites looking for content that 0:24:13.516 --> 0:24:17.076 breaks the rules. And here's the thing, that really blew 0:24:17.116 --> 0:24:22.476 our mind. The lists evolve and the guidance evolves. New 0:24:22.516 --> 0:24:26.636 words or phrases are banned all the time or unbanned, 0:24:27.236 --> 0:24:32.516 like so called golden showers, you know, being it was 0:24:32.556 --> 0:24:34.996 off limits for a lot of banks and payment processors. 0:24:35.596 --> 0:24:41.356 Then suddenly, around twenty sixteen it became kind of okay, 0:24:41.556 --> 0:24:45.396 presumably because the term was in the news a lot 0:24:45.476 --> 0:24:51.556 and somehow normalized. All of this implies that somewhere there 0:24:51.636 --> 0:24:56.716 must be a decision maker, someone blesses these distinctions and 0:24:56.836 --> 0:24:59.956 how they might change. They decide what is fine to 0:24:59.996 --> 0:25:04.276 stream and what isn't. Now that is a relatively easy 0:25:04.316 --> 0:25:10.596 distinction to make when something looks outright illegal. John actually 0:25:10.596 --> 0:25:13.916 conducts his own checks, and we should warn you here. 0:25:14.596 --> 0:25:18.436 We're about to hear how he has come across disturbing videos. 0:25:19.276 --> 0:25:23.316 I started looking for prohibited tech content, and I searched 0:25:23.396 --> 0:25:26.996 keywords within the website. He'll type in a word like 0:25:27.236 --> 0:25:31.756 rape or underage or the countless variations of those themes. 0:25:31.836 --> 0:25:37.436 I did come into a situation where it was kind 0:25:37.476 --> 0:25:41.196 of disturbing content. I can't say it with certainty that 0:25:41.236 --> 0:25:45.156 it was pedophilia, but what I did was I screenshot 0:25:45.196 --> 0:25:50.756 at everything brought it to my first line supervisor, and 0:25:50.996 --> 0:25:54.316 we both just file the report with the FBI. I 0:25:54.356 --> 0:25:57.516 felt we had an ethical obligation to at least alert 0:25:57.596 --> 0:26:01.756 someone in a position of authority to review what we 0:26:01.796 --> 0:26:05.596 had seen. If John searches for a term like twink, 0:26:06.396 --> 0:26:10.436 he might need to take several steps, For example, look 0:26:10.436 --> 0:26:13.876 at ID documents from the performer to confirm that he's 0:26:13.916 --> 0:26:17.196 over the legal age. Racial slur we don't allow it, 0:26:17.276 --> 0:26:21.916 and I understand there are free speech concerns there, but 0:26:22.516 --> 0:26:24.676 I would just tell them, hey, this word here, the 0:26:24.716 --> 0:26:26.196 bank's not going to approve it. You need to change 0:26:26.196 --> 0:26:29.636 it to something else. There are some areas where the 0:26:29.676 --> 0:26:32.996 boundary is hard. As a drawl we're betting pool, like 0:26:33.156 --> 0:26:37.756 hypnosis or sex while someone appears to be asleep. Of 0:26:37.756 --> 0:26:41.356 course they're acting, they're not actually asleep, and no one's 0:26:41.436 --> 0:26:46.636 actually getting hypnotized. But being asleep means that the person 0:26:46.716 --> 0:26:50.676 sleeping does not have the ability to render consent, and 0:26:50.796 --> 0:26:54.276 the thought of hypnotizing someone into doing what you want 0:26:54.276 --> 0:26:57.396 them to do remove the ability to render consent, even 0:26:57.396 --> 0:27:00.916 though it's all acting, it's all fiction. Those perceptions is 0:27:00.956 --> 0:27:04.716 what makes it prohibited. John talks in a pretty matter 0:27:04.756 --> 0:27:07.636 of fact way about the details of these lists, where 0:27:07.636 --> 0:27:10.196 they draw a line and what they try to stop. 0:27:11.076 --> 0:27:14.556 But it's actually a pretty huge deal. Mobia's, the company 0:27:14.596 --> 0:27:18.636 that John works for, essentially acts as a standard regulator 0:27:18.716 --> 0:27:23.036 for pornography, doing the work the governments aren't doing on 0:27:23.076 --> 0:27:27.236 behalf of Visa and MasterCard. It amazed us that this 0:27:27.316 --> 0:27:30.316 level of supervision exists at all, and even more so, 0:27:30.476 --> 0:27:33.876 who does it. To see how much of an influence 0:27:33.956 --> 0:27:37.316 these codes really had on porn production, we went back 0:27:37.316 --> 0:27:40.636 to somebody we trust and what they told us, well, 0:27:41.236 --> 0:27:45.516 it was a little graphic, but truly stunning. That's after 0:27:45.556 --> 0:27:55.796 the break Act three, more power than the Pope. Yeah, 0:27:55.836 --> 0:28:01.716 come on in, So thank you for letting us into 0:28:01.756 --> 0:28:03.556 your home. It's great to see you in New York 0:28:03.636 --> 0:28:10.396 in person. And the snow is here. Brooklyn is white. 0:28:13.236 --> 0:28:16.436 We're in Story's apartment. This is where she told us 0:28:16.476 --> 0:28:19.756 about that detail that got us going down this whole 0:28:19.796 --> 0:28:23.756 path to begin with, that she can't type period in 0:28:23.796 --> 0:28:28.076 a chat box on some pawn platforms. As a performer, 0:28:28.356 --> 0:28:31.356 she's seen a lot of different business models, from pay 0:28:31.436 --> 0:28:35.276 sites to camsites. To create a platforms like only fans 0:28:36.116 --> 0:28:39.836