June 21, 2022 • 40 mins
This bonus episode is from Hot Money, a new podcast from Pushkin and the Financial Times.
When Financial Times reporter Patricia Nilsson started digging into the porn industry, she made a shocking discovery: Nobody knew who controlled the biggest porn company in the world. Now, Nilsson and her editor, Alex Barker, have figured out who the guy was, and much more.
In this episode, the fourth in the series, Patricia and Alex wonder how it's legal for porn sites to host millions of videos uploaded by users. The answer is in the story of an Ohio family in the early 1990s.
It involves a family IT business, an FBI raid and a court case that set the precedent for porn – and for tech giants like Facebook and Twitter.
You can hear more Hot Money episodes at https://link.chtbl.com/dbhotmoney.
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:15):
Pushkin. Hey, it's Jacob Goldstein. We'll have a new episode
of What's Your Problem for you later this week. In
the meantime, we're sharing an episode of a new podcast
called Hot Money. It's a collaboration between Pushkin and The
Financial Times, and it's about the business side of the
porn industry. It's a great show, full of insights and
(00:35):
amazing stories, and this episode in particular seemed like a
really good fit for What's Your Problem. As you'll hear,
it's a story all about technological change and entrepreneurs and
the hard problems they're trying to solve. I hope you'll
like it. Right before we start, we're two Financial Times
journalists trying to work out who rules the porn industry.
(00:59):
So this show has adult themes. I want to take
you to a suburb shopping plaza in Ohio. It's nineteen
ninety three. We're in the middle of America's rust belt.
There's a two paced store place selling furniture, and tucked
(01:21):
in a corner a little company for interactive computer services.
I know it sounds ridiculous, but if the Internet has roots,
they stretched to here, to this modest shopping center in Youngstown,
Ohio to that corner business. Every social media website you
(01:43):
visit today, Facebook, Twitter, TikTok. These platforms are able to
operate in part thanks to them. A family run IT business,
A family run IT business with what was possibly the
biggest stash of digital pawn in America. Today's powered anamics
(02:04):
and porn came from here, straight from that family to
the most powerful pornographers of the twenty first century, the
people we've been talking about on this show. And you
know we told you in previous episodes that the masters
of the adult tube sites were able to get away
with making money from other people's content. The answer to
(02:25):
how lies here and the choices of an Ohio family
back in the nineties. This family, the Hardenburg's, define what
it means to moderate content and cyberspace and what happens
when you go too far. My name is Russell Francis Hardenburg,
the fourth, and I'm a sales manager at a car dealership.
(02:48):
Russ is one of two sons who worked at the
IT business back in the day. When I first called
him and said I was a journalist, he slammed the
phone down. I'm so pleased. I tried again after some
apologetic mumbling. I said to Russ, I want to hear
how your family changed the history of the Internet, and
(03:10):
after a pause he replied, Okay, call me after work.
The Internet was so new that there was some question
whether you took a book and converted it to text
where the copyright laws still would that apply to that
It was just the wild West at first, and that's
(03:38):
the difference Rust and his family made. Their mistakes helped
Lady ground rules for an online world. Who owns digital media,
who has a right to share it, and most importantly,
how the Mark Zuckerberg's of the world can run online
platforms to stay off the hook even when illegal content
is being shared on their sites. I'm Patrician Wilson. I'm
(04:01):
Alex Barker from Pushkin Industries and The Financial Times. This
is Whole Money, Act One, a Shared World. Later in
(04:43):
this episode, Russ and a stepbrother will tell their family
story pretty much for the first time. It's the story
that created the ground rules for the modern porn industry.
But before then, we want to take you further back
in history to the nineteen eighties, the moment that online
porn first came into being. Let's meet one of the
(05:06):
world's first digital pronographers. His name is Dan Lewis. So
around nineteen eighty I bought my first personal computer. It
was a Radio Shack TRSA D Model one. It was
pretty pretty exciting at the time. Your storage device was
a cassette tape recorder. The TRSA D the biggest name
(05:29):
in little computers only a radio Shack attending company. As
far as we can work out, Dan wasn't just one
of the first online pornographers. He was possibly the first
one to actually turn a profit from it. He's a
New Yorker and he looks like a regular boomer, beard, glasses,
(05:51):
a friendly uncle type. He wasn't easy to find. By
the way, Dan Lewis is his cover name. Yes, another
guy with a cover name. Out of desperation, I tried
an email address from an advert for something called a
bulletin board. It was from nineteen ninety four, but somehow
it worked. You could dial up bulletin boards and exchange
(06:16):
messages with people and you know, find out some technical information.
Now you might have heard of arper net and usenet,
the early ways that academics and military types communicated online.
Bullets and boards used a similar technology, but They were
for the private world, not just public institutions. Anybody could
(06:37):
use them. Dan's computer was in his bedroom in Queens.
The equipment wasn't cheap, and in Dan's case, no university
or government was paying the bills. He would pick up
the chunky telephone handset and plug it into an even
bigger box, the modem. Through the modem, he would then
dial another computer in some far off place, the bulletin
(06:59):
Board System or BBS. It was a shared world games,
basic software, conspiracy theories, bad jokes. If you knew which
board to dial up and you could master to clunky tech.
It was all there and young Dan, he was in
his early twenties. Den he got more and more obsessed.
(07:21):
He was dining up at eleven o'clock at night to
keep his meteoric phone bills down. He was broken, barely
scraping together money for rent. So I started trying to
think about is there a way I could leverage this
and supplement my income? Well, what other kinds of BBS
(07:43):
related services might people pay for? And decided that, you
know what, the only thing people will pay for is sex.
People are horny, people are purian, people want to see
images of other naked people, or they want to see
them engage in activities that they can't try now, or
(08:05):
want to try, or have it tried. It's just human nature.
Back in nineteen eighty four, a bulletin board interface just
had text bright neon green text, but you could download
simple images, games, that kind of stuff. Dan's idea was
to specialize. He wanted to launch a BBS dedicated to
(08:26):
adult stuff, an erotic platform for the uninhabited. The cool
started rolling in with hindsight. The technology was laughably basic.
Dance system Aislenet was running it one thousand, two hundred
bits per second, not kill a bits, not megabits, just bits.
(08:48):
So how did it work? Well, you'd sit down at
your computer, so you'd go to your dialing list. Okay,
which BBS do I want to call? All right, let's
call us. When you click on it, and you'll hear
procom dialing the modem, it'll ring and the modem will answer.
If you haven't heard what a modems sounds like, it
(09:09):
sounds a little bit like a fact tone. And you're connected.
So you'd get a welcome screen and then you might
get a list of subcategories of files. It's okay, So
you click on the adult section and then you might
get another sub menu of women, men, women and men,
and you pick what you want and it'll download. Now
(09:33):
the fun begins, zing bing bing bing bing, and it
ends up on your computer. Then you get to look
at your picture. Isn't that easy? You had to be
patient that bing bing bing took minutes, not seconds. But
for porn, people were willing to wait, and they would
(09:53):
pay for it. At first, Dan charged ten dollars to subscribers,
then I one two forty five a year. The checks
were being mailed to him in the post. It didn't
take long until Dan was making as much from his
adult side as he was from his day job. And
I mean it was tremendous. Those were the best years.
(10:14):
Those were absolutely the best years. You know what's really
striking about that time. Pioneers like Dan were on a
tiny scale revealing what was about to hit us. All
dirty pictures, software, even the written word. If digital goods
could be copied, they would be copied NonStop and shared
(10:35):
far and wide. And the law, well, as we'll tell
you in a bit, it hadn't caught up yet. In
this legal no man's land. Dan could become a pornographer
of swords, all from his bedroom in Queens without ever
having taken a photo or set foot on a pawn set.
Even in the age of bulletin boards, people were beginning
(10:55):
to realize the implications. Dan's operation was relatively modest, just
a few telephone lines. He kept his head down. But
some other operators were not so shy, operators like Rusty
and Edy Hardenberg. Rusty and Edy was really big and
they had I don't even know how many phone lines
(11:16):
they had, and obviously invested a lot of money, and
their objective clearly was to make their living after completely
Rusty and Edies bulletin board veterans talk of them with
a wistful air, and let me give you a clue.
Their office was in Youngstown, Ohio, in a little strip
(11:36):
mall next to a two pay stall. Rusty Needy were
a father and stepmother of Russ, the guy we heard
from earlier in the show. They were the family who
laid the rules for the way the internet works today.
(11:58):
To take a look at this advert I found for
Rusty and Needs from a magazine in the early nineties.
I'm looking two owls. They're snuggled up Wing to wing.
Some text here it says we are the friendliest bbs
in the world. Our name says at all. Ed and
(12:20):
I are a couple of burnouts from the nineteen sixties.
We didn't un like rules then and we don't now.
Come on in and relax, you'll be among friends. It's
a great copy, isn't it. It's fantastic. You know, this
was the Rusty and Edy brand. It was great marketing.
It worked. I mean they were the kind of Ben
(12:40):
and Jerry's of nineteen eighties home computing. You reached their
bulletin board and there was in big green letters, first rule,
have fun, Second rule, no more rules, wild and exactly.
And you know they would not have thought of themselves
as pornographers, not for a second, but almost by accident,
(13:03):
they helped define what pawn would become in an online age.
So did you manage to speak to them? Rusty passed
a few years ago, and I would love to have
spoken to him. But I did reach Ed and we
had an amazing conversation. But talking about Rusty and Ed's
it just brought back too many memories for her, so
(13:28):
she didn't want to talk on tape, and instead she
put me in touch with her son, Sean McFarland, and
he's an Army vet. He runs a chain of convenience stores,
and we spoke to him from a garage that looked
more like an aircraft hanger. Have you got a helicopter,
just a little one. Yeah, yeah, that's that's why I
(13:49):
did in the army. So my son and I like
to fly around, go have a burger and apart. Sean
didn't always run convenience stores and zip around in a helicopter.
Growing up. He helps his family run their business. I
built the computers in my network, made him cocked each other.
(14:11):
He remembers his stepfather, Rusty, as a man of outsized passions.
Any hobby would become industry. Their house would fill with
cigars or fish tanks. There were fifteen at one point,
or big bulky computers, dozens of them. Rusty actually wasn't
an old, burned out hippie. He was a retired insurance
(14:31):
manager and a lifelong libertarian. He hated being told what
to do, not just by governments, but by anyone, frankly,
so when he started visiting bulletin boards, you can guess
what happened next. So he goes, why don't I start
my own with no rules? So he wanted no rules,
(14:54):
are free for all, do whatever you want to do.
He wasn't the only one. A lot of bulletin board
folks were making up rules on the go. Nobody really
knew who owned a digital copy of a physical image
or a piece of text. A lot of them didn't care. Now, Russ,
(15:14):
the harden Burst son who I talked to at the
beginning of the show, the one who put the phone
down on me. Russ was helping his father Rusty on
the software side and handling the fallout from having no rules.
When did adult materials start right from the get go?
So at first it was just grany scanned photographs, and
(15:37):
then they came out with short little gifts which were
thirty second mini movies. Did Russ have any qualms about
having adult content on the system? Not really. I mean
it's a libertarian yet we're not hurting anybody. There are adults.
Some came for the game's sex chat and dating. Edie
(16:00):
told us that a few people got married after meeting
in their forums, but for others, well, Rusty and Dy
amassed one of the world biggest collections of digital porn.
By nineteen ninety three, Rusty and Needy had hosted roughly
three and a half million calls in total, around four
thousand on any given day. Calls came in from all
(16:21):
over the world, Britain, Saudi Arabia, Japan, and as the
business grew, Rusty and Needy had to find space for
dozens of computers. First, the equipment filled the bedroom of
Rusty's two room apartment, then the hall, then the entire
basement of their new home. The servers produced so much
heat Rusty installed a four ton air conditioner and it
(16:45):
was still like a sauna we had working even in
a winner in shorts and a T shirt. It was
just hot. I mean he was a good businessman. I
mean did he make a lot of money out of this? Oh? Yeah,
he did very well. Those overheated servers hosted around nineteen
gigabytes of data. These days you carried ten times that
(17:06):
data in your pocket. But back then this was like
Aladdin's cave. It was getting attention. Some commercial software makers
got upset, as did some porn barons. And then there
was the FBI Act too, The dangers of moderation. So far,
(17:32):
the Rusty and Edy story is a sort of libertarian dream.
An entrepreneurial family creates an online space with no rules
and builds it into a successful family business. Now we
come to the part of the story where the government
strikes back. It's a moment so dramatic that even three
(17:53):
decades later, Edy couldn't bear to talk about it. The
night at the raid, it was my sister's wedding day,
and I think they planned it that way so we
wouldn't be home. We were all at the reception and
my stepbrother Sean had to go back to the house
to get something. I was coming home with my girlfriend.
(18:15):
I like pulling the driver and I go, WHOA, what's
all these cards still in here? And then I walked
up to the garage and bunch of guys with the
FBI jacket song came and asked me who I was.
They kicked the door in and they came in all
different directions. Was gigantic. They had guns and they seized everything.
They took every computer, every server, everything out of the house.
(18:37):
They took all our records, everything we had, they took
it all. My father was terrified. They warn't alleged they
had illegally distributed software without permission of the copyright owners.
But there was more to it than that. By the
early nineties, Congress and the FBI had woken up to
the digital economy. The press was raising alarm about cyber porn.
(19:00):
The FBI wanted to set some boundaries. The government seized
the business just because they want to look around and
see if we were doing anything wrong. For two and
a half years, they took a man's business. All is hardware.
You can probably tell from Russ's voice, the memories are
still raw for the family. It's the reason Edi wouldn't
(19:23):
speak to us. Just thinking back to that day gave
her sleepless nights. There was a little point in her
life too. I mean the they literally thought they were
going to prison. And I mean, I don't care how
much money you have, you can't fight Uncle Sam. He's
got endless money. Somehow, Rusty and Needy's bulletin board got
back online after the FBI swooped. They had backups, they
(19:44):
bought new computers, and they had the shopping plaza office.
The thing is, there was a second punch, another crisis
for the family, one that actually helped create the internet
we have today. It came a few months after the
raid a lawsuit straight from Hugh Hefner's mansion. The Playboy
founder had realized that his pictures were being shared online
(20:08):
digital copies and he wasn't being paid, so the heff
decided to fight back. He sent a female staffer on
an undercover mission. She signed up to Rusty's bulletin board
under a fake name, Bob Campbell, and don't we love
fake names on this podcast. Her mission to hunt down
(20:28):
copied Playboy pigs. You gotta remember, we had maybe one
hundred to two hundred thousand images on our servers, and
I think they found five. Do you remember which pictures
they were? They said, Bo Derek. Playboy actually presented around
twenty images to the corps, but it was still a
tiny fraction of the pictures available. I like to think
(20:52):
they were all of Bow Derek. She was the actress
from the movie ten, cast in the role of the
Perfect Woman. Dudley Moore dreamed of her bouncing towards him
on a beach. Now. Even before the lawsuit, Rusty had
a hunch Playboy in particular would come for him someday,
so he made his son Russ, screen every uploaded image.
(21:13):
He was a gatekeeper, one of the first online moderators,
and he told him to keep a particular eye out
for Playboy images. Rusty even commissioned software to find Playboy
picks and take them down. For the pictures of Bo Derek,
they somehow slipped through. Rusty's case settled. His insurance company
(21:33):
covered the settlement amount, but this case was remembered for
something else. They don't know what digitalized information did. The
copyrights still stand for print information. That was a gray area,
but the Playboy ruling kind of started the if it's digitalized,
it's still under copyright rule. The judge ruled against Rusty
(21:58):
precisely because he had asked his son to moderate the uploads.
By being responsible by screening every file, Rusty became liable.
Suddenly he was a publisher, not just a bulletin board.
The thing Rusty to protect the family business actually left
them exposed. We didn't think that we would lose because
(22:18):
the one thing my father was against was having any
pictures of Playboy on our BBS. That was specifically tried
for years to keep anything they had to do with
Playboy off of our BBS. That's the funny thing about it. Anyway,
I guess it's funny, but we thought we had done
(22:40):
our due diligence. But evidently the courts thought differently. The
moderation was their downfall. If Rusty hadn't checked a thing
the people uploading Bow Derek pictures, they would have been
on the hook to Playboy, not Rusty. This became an
important ruling for digital media. Who owns it, who has
a right to share it? Most importantly, can the person
(23:03):
running the platform be held liable? When A and M
Records and half the US music industry sued file sharing
site Napster in two thousand, lawyers in that courtroom reciting
Playboy versus Russ Hardenberg, the case against Rusty and Edy.
(23:24):
It's so strange to think that the road rules of
the Internet were partly laid down in a hot basement
in suburban Ohio, a hot basement stacked full of computers,
tangled cables, and grainy gifts of pawn. These road rules
would be one hell of an important lesson for the
next generation of Internet entrepreneurs, for Mark Zuckerberg or Jack Dawsey,
(23:47):
but also online pornographers like Fabian Tilman and Bernt berg Meyer.
If it was not for Rusty and Edy porn Hub
might be run very differently. You can hear the same
debate today. You might have heard of big tech's favorite
laws to digital Millennial Copyright Act and section two thirty
of the Communications Decency Act. Together they effectively given you
(24:09):
to platforms like Google or Facebook. It is a tiny
law that's had a huge impact on the Internet, as
we know at section two thirty of the Communication's Decency Act.
Lawmakers on both sides of the eye want to change
the way the law works, affecting how content is moderated.
Online companies aren't liable for what people say or share
on their sites, even if it is illegal. Some critics
(24:30):
of the law say that it leaves social media free
to ignore lies, hoaxes, and slander that can wreck the
lives of innocent people. And the Playboy case against Rusty
and Needy it paved the way for that protection on
screening and moderation. It's set the legal standard for online media.
(24:52):
The big lesson don't screen content through rigorously. It leaves
the under hook just deal with the complaints. Rusty's family
still feels pretty sore. They were raided, dragged through the courts,
punished for moderating the whole FBI ordeal lasted two years
(25:13):
without a charge being filed. And all those bowderic pictures
you can find them on countless sites these days. So
I did it work? Basically you can get right now
everything we had on there. If you log in a
major search engine and hit image, you can get the
same thing. Now, now, are they suing them? The BBS
(25:37):
era didn't last for long. By nineteen ninety five, it
had been pretty much blown away by the popularity of
AOL and the Worldwide Web. That opened a truly libertine
era for the Internet and porn, the Great Digital Awakening.
After the break, we'll meet one of its stars. Act three,
(26:05):
A Web of wander. Meet Madeler Altman. She's talking from
her home in Massachusetts, designed by the founder of the
Bauhaus movement. Out of the window, I can see fields
rolling into the distance. It's a picture of New England tranquility.
Was it very intimate doing it over? I mean, oh
(26:25):
my god, I can Sometimes I came like five six
times a day. I swarked to God, Alex it was
so hot. You come on, You're in a private booth
and the guys are telling you how gorgeous they are
and how sexy you are and you're like great loving this,
you know. Madeline is in her late fifties, she has
two master's degrees, she speaks five languages, and back in
(26:48):
nineteen ninety five, she was one of the first people
to create, host, and run a live video conferencing site.
It just happens she did it while performing nude. Live
video is something many of us use every day for work.
It's one of the wonders of the Internet. Madeline's business
was the not safe for work kind. Today they're cool
(27:09):
cam sites and they're a great money spinner for pawn.
Live video is an experience that can't be copied and shared.
Madeline stands out because she was doing this. In nineteen
ninety five. The World Wide Web had launched, but none
of the things we take for granted online were there.
Search engines, video streaming, online payments. Everything was an experiment.
(27:31):
Nobody had worked out what the Internet was for or
how it could be turned into serious money. In other words,
nobody ruled cyberspace. And this is where porn had its moment,
when people like Madeline became the first colonizers of this
online world to understand Madeleine's journey, you have to start
(27:51):
with a television series, Madeline's Variety TV MVTV. We have
a hot show for you tonight. It's Breast maintenance Day.
Does a bra a day help the Sago away? You know?
I mean, should you? I read once when I was younger,
you should wear a bra every day? This is true?
Or that's what you told me. What do you think
about this? Do you wear a brano? Not every day?
(28:13):
Inspired by anarchists, it ed in San Francisco on the
Community Access Channel in the late eighties. MVTV is really
really sexy, right, because San Francisco is really really sexy,
so we get really wild, you know, like putting wrestling,
lesbians having sex on the American flag, and you know,
when you're immersed in this world. San Francisco in the
late eighties and early nineties was a heavily sexualized culture,
(28:36):
and it became super normalized. Right. The show picked up
a cult following and earned Madeline scholarship to NYU, So
she moved East and enrolled in one of the hippest
tech programs around. You had to code whatever was on
the Internet with HTML code. So I had to learn
that you have to be really precise, very patient. I'm
(28:57):
like a hyperactive, crazy, wild producer chick. I Am not
someone who's going to sit there and make sure every
dot in its place. It drove me mad, But more
than anything, the program was about big, brash ideas, and
one day of those ideas hit Madeline like the clap
of a Whitney Houston solo. She was walking in New
York's East Village and thinking back to some old guests
(29:17):
on her TV show. I do remember like this whole
thing with talking to strippers and about how they loved
their job and it was great, but coming back and
forth from the clubs, it was so dangerous, and I
knew a stripper who had got an attack. I was
walking down Second Avenue and I'm like, oh my god,
just have them do it online. Just is gonna be
(29:38):
like scooping money out of just puddles everywhere, gonna make
me so rich, And I'm so altruistic. I get to
say it's strippers. I'm just so awesome. Have them do
it online. You can just picture her in that street,
stopping dead in her tracks. Live video streaming Madeleine had
just stumbled on the idea that twenty five years later
(30:00):
made our pandemic zoom calls possible. It was a little
milestone in tech, Madeleine's lightbulb moment, although they were admittedly
just a few small issues with making it a reality.
There was no technology, there was no streaming video, but
it was charging anything online. But you got to work
(30:20):
and soon a site called Babes for You was born.
Madeline put what money she had into it, and there
wasn't much. She hired a cheap office above a loud
Mexican joint, playing the Maccarrena all night long. She found
her babes, who had mainly been working as strippers, and
in her own words, she hired and fired coders like
spinal Tap went through drummers. They first went live that year.
(30:45):
You downloaded some software via an eight hundred number, and
with that you could play live video. You could chat to,
although only by keyboard. Set aside the nudity for a moment.
This was a new frontier in online communication, but it
was painfully slow. One of the babes didn't show up,
(31:05):
and so I went and started performing my helf, which
you know was a huge thing for me because I'm like,
what am I sex industry worker? Now? Like, I'm a
super well educated, supposed tech student. Now I'm just a
sex worker. So I just ended up doing it and
it was clunky. You know, it was really difficult. A
lot of the guys simply didn't know how to use
(31:26):
a desktop computer at all. Right, it really did help
a lot of strippers. Most of my women were strippers.
I think it really expanded the sort of popularized view
of what kind of women men wanted. You know, online
we found out about all kinds of amazing fetishes. One
of the fetishes involved oranges, flying oranges. Apparently it's a
(31:50):
Dutch thing. That was really funny. We did have one
of these orange people do it, and then she threw
an orange and knocked the whole system out. It was hilarious.
But talk about controlling reality with your computer. Was the
guy wanted oranges thrown at her? Yeah, this is a fetish, Alex,
This is a big fetish. There are hundreds of men
out there who are really into it. Oh, I'm ready.
(32:13):
You know, we have more fun than guys, and they're
paying us. Oh, angel girl, you know you're cannibal. The
trouble in the early days was that business was slow.
Madeline had hired these babes and they were sitting around
with nothing to do. Well, first of all, nobody knew
it existed. Second of all, people were worry about giving
(32:35):
some random number credit card to some people. But you know,
ultimately they're intense urge to have sex drove them to
trust the internet with credit card chromos and this was
never done before. Never, Like people were like, what, what
buy something online? Who would do that? That's crazy. I'm
not going to buy anything online. Why would I do that?
But Madeline had a compelling story. When journalists discovered her,
(32:58):
they loved her. Here she is in an interview from
this time. We wanted to do something with sex and
something with computers because I was hooked up with some
people who were involved in the foreign business, and we're
involving the computer business as I am myself, and so
we thought, well, why don't we do online video sex.
It's a great idea. Madeline, who graduated last week with
(33:18):
her second master's degree, is in now get this the
computer phone sex business. That's right, computer phone sex. After
the press reports, the customers started lining up and just
remember how mad this sounded to someone in nineteen ninety six.
The customers were lining up to pay for things oh
(33:40):
the Internet. Madlin even worked out how to charge them
by the minute. By the way, this payment system would
prove hugely important to the port industry. We'll get into
that in later episodes. I mean you were kind of
helping people over the threshold in a way, right, in
terms of using credit cards, well, yeah, I mean sex
is the biggest drive of all right, people will do
(34:00):
crazy things for sex, even to use the credit card
over the Internet. I mean, basically we invented internet commerce
and just keep charging people's credit cards by the minute.
This was never done before she performed, and she also
acted as an IT help desk. She explained to customers
how to switch on their computer or warn them about
(34:22):
the CD ROM drive the round hole. No, it's not
for holding your coffee cup. People would call like, why
doesn't it work. You're like, seriously, it's not plugged in.
I don't know what a window is. What do you
mean by a window? Like, I don't know how to
resize the window. They're like, just drag it from the corner.
Madeline's idea that Thunderbolt on Second Avenue was a live
(34:42):
sex show online, but in reality she just didn't have
the tech to do it. There was no concept of streaming,
but with the help of a couple of tech wizards,
she figured it out. By nineteen ninety six, they were
streaming video directly through a web browser, a technology then
called jpeg push. This was the dawn of live camps.
(35:04):
Think about your zoom or FaceTime, but back then the
breakthrough was literally the digital version of an old animation book,
you know, the ones where you flipped through the images
which your thumb. We were the first to stream live video.
I mean, the live part is the real component here,
and that's really where I came in because I've been
dealing with live programming for so long. It was a
shoe in for me to figure out how to get
(35:27):
this live programming through the Internet. While Madeline might not
have been the very first, she definitely was one of
the first. It was so cutting edge that some people
were showing up with no interest in Paul. It's amazing
how many customers in the beginning came on not for sex,
but to figure out the technology. They were like, wait, okay,
how are you doing this? Can you just I will pay?
(35:50):
I don't want to see the girl, Just get me
the owner, and I need to talk to the programmer
and I need to figure out what's going on. Porn
was teaching the world how to use the Internet. Sure,
I mean people were experimenting with live video, but at
that point the people who made it work and made
money from it were important, like Madeline's sites, plus a
(36:13):
few streamed sex shows from Amsterdam. Madeline, though, didn't stick around.
Her adventures in online sex were drawing to a close.
She was pregnant, her priorities changed, and she got an
offer on Babes for You. It came from a couple
of ex insurance salesman from Boston. They got into the
(36:34):
world of live video thinking it would be a way
to connect financial advices, theither being the largest purveyors of
sex worldwide. Madeleine's site became part of a business that
launched Float for Free, one of the biggest live camporn sites.
Madeleine was happy, though she bought a Bouhou's house with
(36:54):
her earnings. She's still there in the house that sex
bot and she's proud of what she did in those
wild days of online experimentation. Madeleine was in the first
generation of Internet entrepreneurs, the first to play with the
spell binding potential of the worldwide Web. Madeline's thing was
live video, but we could have told you stories of
(37:16):
solo performers with amateur scites, swinging couples, credit card swindlers.
These were crazy days. One pornographer at the time boasted
that she used more bandwidth than all of Central America.
It was porn that really pushed for the streaming technology.
It was porn that really pushed for all the credit
card and online commerce technology. It was us, We're the
(37:39):
ones who did it. A chick from NYU. They set
the fire. They taught the world about the power of
the web, deliberating side and the scary, uncontrolled side. Within
a couple of decades, the fire that Madeline's generation started,
(38:00):
it became an inferno. The tube sites we told you
about they popped up. Porn became ubiquitous, streamed in an
instant often for free. Thanks in part to the Playboy
court case, owners of sites like Pornhub could host vast
amounts of porn without being held to count for any
specific video until twenty twenty, that is, when pawn faced
(38:24):
an almighty reckoning over illegal content, and pawn Hub's world
came crashing down. It was the moment pawn hubs Enemies
discovered the Achilles Heel of online pawn. That's our next episode. So,
in my opinion, there's two players on this planet that
can kill pawn online, and they can literally kill it.
(38:47):
And if they decidele they it's dead. It's done, absolutely impossible.
Hot Money is a production of The Financial Times and
Pushkin Industries. It was written or reported by me Patrician
Neilson and me X Barker. Peter Sale is our lead
(39:11):
producer and sound designer. Edith Russolo is our associate producer.
Our editor is Karen Shakerjie Amanda Kwong is our engineer.
Music composition by Pascal Wise, fact checking by Andrea Lopez Kusado.
Our executive producers are Cheryl Brumley and Jacob Goldstein. Special
(39:33):
thanks to Renee Kaplan and Ruler Kalov at The Financial
Times and Mia Lobel, lital Molad, Justine Lang, Julia Barton
and Jacob Weisberg at Pushkin Industries. Thank you to a
similar Web for providing our web traffic data. If you
liked this show, consider subscribing to Pushkin Plus, offering bonus
(39:53):
content and ad free listening across our network for four
dollars ninety nine a month. Look for the Pushkin Plus
channel on Apple Podcasts or at pushkin dot fm. Hope
you will know how you give your dread
Pushkin. Hey, it's Jacob Goldstein. We'll have a new episode
of What's Your Problem for you later this week. In
the meantime, we're sharing an episode of a new podcast
called Hot Money. It's a collaboration between Pushkin and The
Financial Times, and it's about the business side of the
porn industry. It's a great show, full of insights and
(00:35):
amazing stories, and this episode in particular seemed like a
really good fit for What's Your Problem. As you'll hear,
it's a story all about technological change and entrepreneurs and
the hard problems they're trying to solve. I hope you'll
like it. Right before we start, we're two Financial Times
journalists trying to work out who rules the porn industry.
(00:59):
So this show has adult themes. I want to take
you to a suburb shopping plaza in Ohio. It's nineteen
ninety three. We're in the middle of America's rust belt.
There's a two paced store place selling furniture, and tucked
(01:21):
in a corner a little company for interactive computer services.
I know it sounds ridiculous, but if the Internet has roots,
they stretched to here, to this modest shopping center in Youngstown,
Ohio to that corner business. Every social media website you
(01:43):
visit today, Facebook, Twitter, TikTok. These platforms are able to
operate in part thanks to them. A family run IT business,
A family run IT business with what was possibly the
biggest stash of digital pawn in America. Today's powered anamics
(02:04):
and porn came from here, straight from that family to
the most powerful pornographers of the twenty first century, the
people we've been talking about on this show. And you
know we told you in previous episodes that the masters
of the adult tube sites were able to get away
with making money from other people's content. The answer to
(02:25):
how lies here and the choices of an Ohio family
back in the nineties. This family, the Hardenburg's, define what
it means to moderate content and cyberspace and what happens
when you go too far. My name is Russell Francis Hardenburg,
the fourth, and I'm a sales manager at a car dealership.
(02:48):
Russ is one of two sons who worked at the
IT business back in the day. When I first called
him and said I was a journalist, he slammed the
phone down. I'm so pleased. I tried again after some
apologetic mumbling. I said to Russ, I want to hear
how your family changed the history of the Internet, and
(03:10):
after a pause he replied, Okay, call me after work.
The Internet was so new that there was some question
whether you took a book and converted it to text
where the copyright laws still would that apply to that
It was just the wild West at first, and that's
(03:38):
the difference Rust and his family made. Their mistakes helped
Lady ground rules for an online world. Who owns digital media,
who has a right to share it, and most importantly,
how the Mark Zuckerberg's of the world can run online
platforms to stay off the hook even when illegal content
is being shared on their sites. I'm Patrician Wilson. I'm
(04:01):
Alex Barker from Pushkin Industries and The Financial Times. This
is Whole Money, Act One, a Shared World. Later in
(04:43):
this episode, Russ and a stepbrother will tell their family
story pretty much for the first time. It's the story
that created the ground rules for the modern porn industry.
But before then, we want to take you further back
in history to the nineteen eighties, the moment that online
porn first came into being. Let's meet one of the
(05:06):
world's first digital pronographers. His name is Dan Lewis. So
around nineteen eighty I bought my first personal computer. It
was a Radio Shack TRSA D Model one. It was
pretty pretty exciting at the time. Your storage device was
a cassette tape recorder. The TRSA D the biggest name
(05:29):
in little computers only a radio Shack attending company. As
far as we can work out, Dan wasn't just one
of the first online pornographers. He was possibly the first
one to actually turn a profit from it. He's a
New Yorker and he looks like a regular boomer, beard, glasses,
(05:51):
a friendly uncle type. He wasn't easy to find. By
the way, Dan Lewis is his cover name. Yes, another
guy with a cover name. Out of desperation, I tried
an email address from an advert for something called a
bulletin board. It was from nineteen ninety four, but somehow
it worked. You could dial up bulletin boards and exchange
(06:16):
messages with people and you know, find out some technical information.
Now you might have heard of arper net and usenet,
the early ways that academics and military types communicated online.
Bullets and boards used a similar technology, but They were
for the private world, not just public institutions. Anybody could
(06:37):
use them. Dan's computer was in his bedroom in Queens.
The equipment wasn't cheap, and in Dan's case, no university
or government was paying the bills. He would pick up
the chunky telephone handset and plug it into an even
bigger box, the modem. Through the modem, he would then
dial another computer in some far off place, the bulletin
(06:59):
Board System or BBS. It was a shared world games,
basic software, conspiracy theories, bad jokes. If you knew which
board to dial up and you could master to clunky tech.
It was all there and young Dan, he was in
his early twenties. Den he got more and more obsessed.
(07:21):
He was dining up at eleven o'clock at night to
keep his meteoric phone bills down. He was broken, barely
scraping together money for rent. So I started trying to
think about is there a way I could leverage this
and supplement my income? Well, what other kinds of BBS
(07:43):
related services might people pay for? And decided that, you
know what, the only thing people will pay for is sex.
People are horny, people are purian, people want to see
images of other naked people, or they want to see
them engage in activities that they can't try now, or
(08:05):
want to try, or have it tried. It's just human nature.
Back in nineteen eighty four, a bulletin board interface just
had text bright neon green text, but you could download
simple images, games, that kind of stuff. Dan's idea was
to specialize. He wanted to launch a BBS dedicated to
(08:26):
adult stuff, an erotic platform for the uninhabited. The cool
started rolling in with hindsight. The technology was laughably basic.
Dance system Aislenet was running it one thousand, two hundred
bits per second, not kill a bits, not megabits, just bits.
(08:48):
So how did it work? Well, you'd sit down at
your computer, so you'd go to your dialing list. Okay,
which BBS do I want to call? All right, let's
call us. When you click on it, and you'll hear
procom dialing the modem, it'll ring and the modem will answer.
If you haven't heard what a modems sounds like, it
(09:09):
sounds a little bit like a fact tone. And you're connected.
So you'd get a welcome screen and then you might
get a list of subcategories of files. It's okay, So
you click on the adult section and then you might
get another sub menu of women, men, women and men,
and you pick what you want and it'll download. Now
(09:33):
the fun begins, zing bing bing bing bing, and it
ends up on your computer. Then you get to look
at your picture. Isn't that easy? You had to be
patient that bing bing bing took minutes, not seconds. But
for porn, people were willing to wait, and they would
(09:53):
pay for it. At first, Dan charged ten dollars to subscribers,
then I one two forty five a year. The checks
were being mailed to him in the post. It didn't
take long until Dan was making as much from his
adult side as he was from his day job. And
I mean it was tremendous. Those were the best years.
(10:14):
Those were absolutely the best years. You know what's really
striking about that time. Pioneers like Dan were on a
tiny scale revealing what was about to hit us. All
dirty pictures, software, even the written word. If digital goods
could be copied, they would be copied NonStop and shared
(10:35):
far and wide. And the law, well, as we'll tell
you in a bit, it hadn't caught up yet. In
this legal no man's land. Dan could become a pornographer
of swords, all from his bedroom in Queens without ever
having taken a photo or set foot on a pawn set.
Even in the age of bulletin boards, people were beginning
(10:55):
to realize the implications. Dan's operation was relatively modest, just
a few telephone lines. He kept his head down. But
some other operators were not so shy, operators like Rusty
and Edy Hardenberg. Rusty and Edy was really big and
they had I don't even know how many phone lines
(11:16):
they had, and obviously invested a lot of money, and
their objective clearly was to make their living after completely
Rusty and Edies bulletin board veterans talk of them with
a wistful air, and let me give you a clue.
Their office was in Youngstown, Ohio, in a little strip
(11:36):
mall next to a two pay stall. Rusty Needy were
a father and stepmother of Russ, the guy we heard
from earlier in the show. They were the family who
laid the rules for the way the internet works today.
(11:58):
To take a look at this advert I found for
Rusty and Needs from a magazine in the early nineties.
I'm looking two owls. They're snuggled up Wing to wing.
Some text here it says we are the friendliest bbs
in the world. Our name says at all. Ed and
(12:20):
I are a couple of burnouts from the nineteen sixties.
We didn't un like rules then and we don't now.
Come on in and relax, you'll be among friends. It's
a great copy, isn't it. It's fantastic. You know, this
was the Rusty and Edy brand. It was great marketing.
It worked. I mean they were the kind of Ben
(12:40):
and Jerry's of nineteen eighties home computing. You reached their
bulletin board and there was in big green letters, first rule,
have fun, Second rule, no more rules, wild and exactly.
And you know they would not have thought of themselves
as pornographers, not for a second, but almost by accident,
(13:03):
they helped define what pawn would become in an online age.
So did you manage to speak to them? Rusty passed
a few years ago, and I would love to have
spoken to him. But I did reach Ed and we
had an amazing conversation. But talking about Rusty and Ed's
it just brought back too many memories for her, so
(13:28):
she didn't want to talk on tape, and instead she
put me in touch with her son, Sean McFarland, and
he's an Army vet. He runs a chain of convenience stores,
and we spoke to him from a garage that looked
more like an aircraft hanger. Have you got a helicopter,
just a little one. Yeah, yeah, that's that's why I
(13:49):
did in the army. So my son and I like
to fly around, go have a burger and apart. Sean
didn't always run convenience stores and zip around in a helicopter.
Growing up. He helps his family run their business. I
built the computers in my network, made him cocked each other.
(14:11):
He remembers his stepfather, Rusty, as a man of outsized passions.
Any hobby would become industry. Their house would fill with
cigars or fish tanks. There were fifteen at one point,
or big bulky computers, dozens of them. Rusty actually wasn't
an old, burned out hippie. He was a retired insurance
(14:31):
manager and a lifelong libertarian. He hated being told what
to do, not just by governments, but by anyone, frankly,
so when he started visiting bulletin boards, you can guess
what happened next. So he goes, why don't I start
my own with no rules? So he wanted no rules,
(14:54):
are free for all, do whatever you want to do.
He wasn't the only one. A lot of bulletin board
folks were making up rules on the go. Nobody really
knew who owned a digital copy of a physical image
or a piece of text. A lot of them didn't care. Now, Russ,
(15:14):
the harden Burst son who I talked to at the
beginning of the show, the one who put the phone
down on me. Russ was helping his father Rusty on
the software side and handling the fallout from having no rules.
When did adult materials start right from the get go?
So at first it was just grany scanned photographs, and
(15:37):
then they came out with short little gifts which were
thirty second mini movies. Did Russ have any qualms about
having adult content on the system? Not really. I mean
it's a libertarian yet we're not hurting anybody. There are adults.
Some came for the game's sex chat and dating. Edie
(16:00):
told us that a few people got married after meeting
in their forums, but for others, well, Rusty and Dy
amassed one of the world biggest collections of digital porn.
By nineteen ninety three, Rusty and Needy had hosted roughly
three and a half million calls in total, around four
thousand on any given day. Calls came in from all
(16:21):
over the world, Britain, Saudi Arabia, Japan, and as the
business grew, Rusty and Needy had to find space for
dozens of computers. First, the equipment filled the bedroom of
Rusty's two room apartment, then the hall, then the entire
basement of their new home. The servers produced so much
heat Rusty installed a four ton air conditioner and it
(16:45):
was still like a sauna we had working even in
a winner in shorts and a T shirt. It was
just hot. I mean he was a good businessman. I
mean did he make a lot of money out of this? Oh? Yeah,
he did very well. Those overheated servers hosted around nineteen
gigabytes of data. These days you carried ten times that
(17:06):
data in your pocket. But back then this was like
Aladdin's cave. It was getting attention. Some commercial software makers
got upset, as did some porn barons. And then there
was the FBI Act too, The dangers of moderation. So far,
(17:32):
the Rusty and Edy story is a sort of libertarian dream.
An entrepreneurial family creates an online space with no rules
and builds it into a successful family business. Now we
come to the part of the story where the government
strikes back. It's a moment so dramatic that even three
(17:53):
decades later, Edy couldn't bear to talk about it. The
night at the raid, it was my sister's wedding day,
and I think they planned it that way so we
wouldn't be home. We were all at the reception and
my stepbrother Sean had to go back to the house
to get something. I was coming home with my girlfriend.
(18:15):
I like pulling the driver and I go, WHOA, what's
all these cards still in here? And then I walked
up to the garage and bunch of guys with the
FBI jacket song came and asked me who I was.
They kicked the door in and they came in all
different directions. Was gigantic. They had guns and they seized everything.
They took every computer, every server, everything out of the house.
(18:37):
They took all our records, everything we had, they took
it all. My father was terrified. They warn't alleged they
had illegally distributed software without permission of the copyright owners.
But there was more to it than that. By the
early nineties, Congress and the FBI had woken up to
the digital economy. The press was raising alarm about cyber porn.
(19:00):
The FBI wanted to set some boundaries. The government seized
the business just because they want to look around and
see if we were doing anything wrong. For two and
a half years, they took a man's business. All is hardware.
You can probably tell from Russ's voice, the memories are
still raw for the family. It's the reason Edi wouldn't
(19:23):
speak to us. Just thinking back to that day gave
her sleepless nights. There was a little point in her
life too. I mean the they literally thought they were
going to prison. And I mean, I don't care how
much money you have, you can't fight Uncle Sam. He's
got endless money. Somehow, Rusty and Needy's bulletin board got
back online after the FBI swooped. They had backups, they
(19:44):
bought new computers, and they had the shopping plaza office.
The thing is, there was a second punch, another crisis
for the family, one that actually helped create the internet
we have today. It came a few months after the
raid a lawsuit straight from Hugh Hefner's mansion. The Playboy
founder had realized that his pictures were being shared online
(20:08):
digital copies and he wasn't being paid, so the heff
decided to fight back. He sent a female staffer on
an undercover mission. She signed up to Rusty's bulletin board
under a fake name, Bob Campbell, and don't we love
fake names on this podcast. Her mission to hunt down
(20:28):
copied Playboy pigs. You gotta remember, we had maybe one
hundred to two hundred thousand images on our servers, and
I think they found five. Do you remember which pictures
they were? They said, Bo Derek. Playboy actually presented around
twenty images to the corps, but it was still a
tiny fraction of the pictures available. I like to think
(20:52):
they were all of Bow Derek. She was the actress
from the movie ten, cast in the role of the
Perfect Woman. Dudley Moore dreamed of her bouncing towards him
on a beach. Now. Even before the lawsuit, Rusty had
a hunch Playboy in particular would come for him someday,
so he made his son Russ, screen every uploaded image.
(21:13):
He was a gatekeeper, one of the first online moderators,
and he told him to keep a particular eye out
for Playboy images. Rusty even commissioned software to find Playboy
picks and take them down. For the pictures of Bo Derek,
they somehow slipped through. Rusty's case settled. His insurance company
(21:33):
covered the settlement amount, but this case was remembered for
something else. They don't know what digitalized information did. The
copyrights still stand for print information. That was a gray area,
but the Playboy ruling kind of started the if it's digitalized,
it's still under copyright rule. The judge ruled against Rusty
(21:58):
precisely because he had asked his son to moderate the uploads.
By being responsible by screening every file, Rusty became liable.
Suddenly he was a publisher, not just a bulletin board.
The thing Rusty to protect the family business actually left
them exposed. We didn't think that we would lose because
(22:18):
the one thing my father was against was having any
pictures of Playboy on our BBS. That was specifically tried
for years to keep anything they had to do with
Playboy off of our BBS. That's the funny thing about it. Anyway,
I guess it's funny, but we thought we had done
(22:40):
our due diligence. But evidently the courts thought differently. The
moderation was their downfall. If Rusty hadn't checked a thing
the people uploading Bow Derek pictures, they would have been
on the hook to Playboy, not Rusty. This became an
important ruling for digital media. Who owns it, who has
a right to share it? Most importantly, can the person
(23:03):
running the platform be held liable? When A and M
Records and half the US music industry sued file sharing
site Napster in two thousand, lawyers in that courtroom reciting
Playboy versus Russ Hardenberg, the case against Rusty and Edy.
(23:24):
It's so strange to think that the road rules of
the Internet were partly laid down in a hot basement
in suburban Ohio, a hot basement stacked full of computers,
tangled cables, and grainy gifts of pawn. These road rules
would be one hell of an important lesson for the
next generation of Internet entrepreneurs, for Mark Zuckerberg or Jack Dawsey,
(23:47):
but also online pornographers like Fabian Tilman and Bernt berg Meyer.
If it was not for Rusty and Edy porn Hub
might be run very differently. You can hear the same
debate today. You might have heard of big tech's favorite
laws to digital Millennial Copyright Act and section two thirty
of the Communications Decency Act. Together they effectively given you
(24:09):
to platforms like Google or Facebook. It is a tiny
law that's had a huge impact on the Internet, as
we know at section two thirty of the Communication's Decency Act.
Lawmakers on both sides of the eye want to change
the way the law works, affecting how content is moderated.
Online companies aren't liable for what people say or share
on their sites, even if it is illegal. Some critics
(24:30):
of the law say that it leaves social media free
to ignore lies, hoaxes, and slander that can wreck the
lives of innocent people. And the Playboy case against Rusty
and Needy it paved the way for that protection on
screening and moderation. It's set the legal standard for online media.
(24:52):
The big lesson don't screen content through rigorously. It leaves
the under hook just deal with the complaints. Rusty's family
still feels pretty sore. They were raided, dragged through the courts,
punished for moderating the whole FBI ordeal lasted two years
(25:13):
without a charge being filed. And all those bowderic pictures
you can find them on countless sites these days. So
I did it work? Basically you can get right now
everything we had on there. If you log in a
major search engine and hit image, you can get the
same thing. Now, now, are they suing them? The BBS
(25:37):
era didn't last for long. By nineteen ninety five, it
had been pretty much blown away by the popularity of
AOL and the Worldwide Web. That opened a truly libertine
era for the Internet and porn, the Great Digital Awakening.
After the break, we'll meet one of its stars. Act three,
(26:05):
A Web of wander. Meet Madeler Altman. She's talking from
her home in Massachusetts, designed by the founder of the
Bauhaus movement. Out of the window, I can see fields
rolling into the distance. It's a picture of New England tranquility.
Was it very intimate doing it over? I mean, oh
(26:25):
my god, I can Sometimes I came like five six
times a day. I swarked to God, Alex it was
so hot. You come on, You're in a private booth
and the guys are telling you how gorgeous they are
and how sexy you are and you're like great loving this,
you know. Madeline is in her late fifties, she has
two master's degrees, she speaks five languages, and back in
(26:48):
nineteen ninety five, she was one of the first people
to create, host, and run a live video conferencing site.
It just happens she did it while performing nude. Live
video is something many of us use every day for work.
It's one of the wonders of the Internet. Madeline's business
was the not safe for work kind. Today they're cool
(27:09):
cam sites and they're a great money spinner for pawn.
Live video is an experience that can't be copied and shared.
Madeline stands out because she was doing this. In nineteen
ninety five. The World Wide Web had launched, but none
of the things we take for granted online were there.
Search engines, video streaming, online payments. Everything was an experiment.
(27:31):
Nobody had worked out what the Internet was for or
how it could be turned into serious money. In other words,
nobody ruled cyberspace. And this is where porn had its moment,
when people like Madeline became the first colonizers of this
online world to understand Madeleine's journey, you have to start
(27:51):
with a television series, Madeline's Variety TV MVTV. We have
a hot show for you tonight. It's Breast maintenance Day.
Does a bra a day help the Sago away? You know?
I mean, should you? I read once when I was younger,
you should wear a bra every day? This is true?
Or that's what you told me. What do you think
about this? Do you wear a brano? Not every day?
(28:13):
Inspired by anarchists, it ed in San Francisco on the
Community Access Channel in the late eighties. MVTV is really
really sexy, right, because San Francisco is really really sexy,
so we get really wild, you know, like putting wrestling,
lesbians having sex on the American flag, and you know,
when you're immersed in this world. San Francisco in the
late eighties and early nineties was a heavily sexualized culture,
(28:36):
and it became super normalized. Right. The show picked up
a cult following and earned Madeline scholarship to NYU, So
she moved East and enrolled in one of the hippest
tech programs around. You had to code whatever was on
the Internet with HTML code. So I had to learn
that you have to be really precise, very patient. I'm
(28:57):
like a hyperactive, crazy, wild producer chick. I Am not
someone who's going to sit there and make sure every
dot in its place. It drove me mad, But more
than anything, the program was about big, brash ideas, and
one day of those ideas hit Madeline like the clap
of a Whitney Houston solo. She was walking in New
York's East Village and thinking back to some old guests
(29:17):
on her TV show. I do remember like this whole
thing with talking to strippers and about how they loved
their job and it was great, but coming back and
forth from the clubs, it was so dangerous, and I
knew a stripper who had got an attack. I was
walking down Second Avenue and I'm like, oh my god,
just have them do it online. Just is gonna be
(29:38):
like scooping money out of just puddles everywhere, gonna make
me so rich, And I'm so altruistic. I get to
say it's strippers. I'm just so awesome. Have them do
it online. You can just picture her in that street,
stopping dead in her tracks. Live video streaming Madeleine had
just stumbled on the idea that twenty five years later
(30:00):
made our pandemic zoom calls possible. It was a little
milestone in tech, Madeleine's lightbulb moment, although they were admittedly
just a few small issues with making it a reality.
There was no technology, there was no streaming video, but
it was charging anything online. But you got to work
(30:20):
and soon a site called Babes for You was born.
Madeline put what money she had into it, and there
wasn't much. She hired a cheap office above a loud
Mexican joint, playing the Maccarrena all night long. She found
her babes, who had mainly been working as strippers, and
in her own words, she hired and fired coders like
spinal Tap went through drummers. They first went live that year.
(30:45):
You downloaded some software via an eight hundred number, and
with that you could play live video. You could chat to,
although only by keyboard. Set aside the nudity for a moment.
This was a new frontier in online communication, but it
was painfully slow. One of the babes didn't show up,
(31:05):
and so I went and started performing my helf, which
you know was a huge thing for me because I'm like,
what am I sex industry worker? Now? Like, I'm a
super well educated, supposed tech student. Now I'm just a
sex worker. So I just ended up doing it and
it was clunky. You know, it was really difficult. A
lot of the guys simply didn't know how to use
(31:26):
a desktop computer at all. Right, it really did help
a lot of strippers. Most of my women were strippers.
I think it really expanded the sort of popularized view
of what kind of women men wanted. You know, online
we found out about all kinds of amazing fetishes. One
of the fetishes involved oranges, flying oranges. Apparently it's a
(31:50):
Dutch thing. That was really funny. We did have one
of these orange people do it, and then she threw
an orange and knocked the whole system out. It was hilarious.
But talk about controlling reality with your computer. Was the
guy wanted oranges thrown at her? Yeah, this is a fetish, Alex,
This is a big fetish. There are hundreds of men
out there who are really into it. Oh, I'm ready.
(32:13):
You know, we have more fun than guys, and they're
paying us. Oh, angel girl, you know you're cannibal. The
trouble in the early days was that business was slow.
Madeline had hired these babes and they were sitting around
with nothing to do. Well, first of all, nobody knew
it existed. Second of all, people were worry about giving
(32:35):
some random number credit card to some people. But you know,
ultimately they're intense urge to have sex drove them to
trust the internet with credit card chromos and this was
never done before. Never, Like people were like, what, what
buy something online? Who would do that? That's crazy. I'm
not going to buy anything online. Why would I do that?
But Madeline had a compelling story. When journalists discovered her,
(32:58):
they loved her. Here she is in an interview from
this time. We wanted to do something with sex and
something with computers because I was hooked up with some
people who were involved in the foreign business, and we're
involving the computer business as I am myself, and so
we thought, well, why don't we do online video sex.
It's a great idea. Madeline, who graduated last week with
(33:18):
her second master's degree, is in now get this the
computer phone sex business. That's right, computer phone sex. After
the press reports, the customers started lining up and just
remember how mad this sounded to someone in nineteen ninety six.
The customers were lining up to pay for things oh
(33:40):
the Internet. Madlin even worked out how to charge them
by the minute. By the way, this payment system would
prove hugely important to the port industry. We'll get into
that in later episodes. I mean you were kind of
helping people over the threshold in a way, right, in
terms of using credit cards, well, yeah, I mean sex
is the biggest drive of all right, people will do
(34:00):
crazy things for sex, even to use the credit card
over the Internet. I mean, basically we invented internet commerce
and just keep charging people's credit cards by the minute.
This was never done before she performed, and she also
acted as an IT help desk. She explained to customers
how to switch on their computer or warn them about
(34:22):
the CD ROM drive the round hole. No, it's not
for holding your coffee cup. People would call like, why
doesn't it work. You're like, seriously, it's not plugged in.
I don't know what a window is. What do you
mean by a window? Like, I don't know how to
resize the window. They're like, just drag it from the corner.
Madeline's idea that Thunderbolt on Second Avenue was a live
(34:42):
sex show online, but in reality she just didn't have
the tech to do it. There was no concept of streaming,
but with the help of a couple of tech wizards,
she figured it out. By nineteen ninety six, they were
streaming video directly through a web browser, a technology then
called jpeg push. This was the dawn of live camps.
(35:04):
Think about your zoom or FaceTime, but back then the
breakthrough was literally the digital version of an old animation book,
you know, the ones where you flipped through the images
which your thumb. We were the first to stream live video.
I mean, the live part is the real component here,
and that's really where I came in because I've been
dealing with live programming for so long. It was a
shoe in for me to figure out how to get
(35:27):
this live programming through the Internet. While Madeline might not
have been the very first, she definitely was one of
the first. It was so cutting edge that some people
were showing up with no interest in Paul. It's amazing
how many customers in the beginning came on not for sex,
but to figure out the technology. They were like, wait, okay,
how are you doing this? Can you just I will pay?
(35:50):
I don't want to see the girl, Just get me
the owner, and I need to talk to the programmer
and I need to figure out what's going on. Porn
was teaching the world how to use the Internet. Sure,
I mean people were experimenting with live video, but at
that point the people who made it work and made
money from it were important, like Madeline's sites, plus a
(36:13):
few streamed sex shows from Amsterdam. Madeline, though, didn't stick around.
Her adventures in online sex were drawing to a close.
She was pregnant, her priorities changed, and she got an
offer on Babes for You. It came from a couple
of ex insurance salesman from Boston. They got into the
(36:34):
world of live video thinking it would be a way
to connect financial advices, theither being the largest purveyors of
sex worldwide. Madeleine's site became part of a business that
launched Float for Free, one of the biggest live camporn sites.
Madeleine was happy, though she bought a Bouhou's house with
(36:54):
her earnings. She's still there in the house that sex
bot and she's proud of what she did in those
wild days of online experimentation. Madeleine was in the first
generation of Internet entrepreneurs, the first to play with the
spell binding potential of the worldwide Web. Madeline's thing was
live video, but we could have told you stories of
(37:16):
solo performers with amateur scites, swinging couples, credit card swindlers.
These were crazy days. One pornographer at the time boasted
that she used more bandwidth than all of Central America.
It was porn that really pushed for the streaming technology.
It was porn that really pushed for all the credit
card and online commerce technology. It was us, We're the
(37:39):
ones who did it. A chick from NYU. They set
the fire. They taught the world about the power of
the web, deliberating side and the scary, uncontrolled side. Within
a couple of decades, the fire that Madeline's generation started,
(38:00):
it became an inferno. The tube sites we told you
about they popped up. Porn became ubiquitous, streamed in an
instant often for free. Thanks in part to the Playboy
court case, owners of sites like Pornhub could host vast
amounts of porn without being held to count for any
specific video until twenty twenty, that is, when pawn faced
(38:24):
an almighty reckoning over illegal content, and pawn Hub's world
came crashing down. It was the moment pawn hubs Enemies
discovered the Achilles Heel of online pawn. That's our next episode. So,
in my opinion, there's two players on this planet that
can kill pawn online, and they can literally kill it.
(38:47):
And if they decidele they it's dead. It's done, absolutely impossible.
Hot Money is a production of The Financial Times and
Pushkin Industries. It was written or reported by me Patrician
Neilson and me X Barker. Peter Sale is our lead
(39:11):
producer and sound designer. Edith Russolo is our associate producer.
Our editor is Karen Shakerjie Amanda Kwong is our engineer.
Music composition by Pascal Wise, fact checking by Andrea Lopez Kusado.
Our executive producers are Cheryl Brumley and Jacob Goldstein. Special
(39:33):
thanks to Renee Kaplan and Ruler Kalov at The Financial
Times and Mia Lobel, lital Molad, Justine Lang, Julia Barton
and Jacob Weisberg at Pushkin Industries. Thank you to a
similar Web for providing our web traffic data. If you
liked this show, consider subscribing to Pushkin Plus, offering bonus
(39:53):
content and ad free listening across our network for four
dollars ninety nine a month. Look for the Pushkin Plus
channel on Apple Podcasts or at pushkin dot fm. Hope
you will know how you give your dread
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