Chapter 7: Cybersex

Chapter 7 “Cybersex”: Porn hits the internet and a gold rush ensues. The history of phone sex hotlines and early internet adult pioneers like Danny Ashe and Cindy Margolis. A hustler named Seth Warshavsky turns Seattle into a cam girl (and boy) mecca with his company Internet Entertainment Group.

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Episode Transcript

Speaker 1 (00:07):
You know, hardcore. Like the word pornography has kind of
a moving definition depending on who you're talking to. So
it's kind of hard to define because I have my
own personal definitions, but other people have other definitions. Some
people believe that Playboy is pornography, and other people believe
that it's not. Some people believe that I'm pornography, and

(00:27):
some people believe I'm not. Danny ash Danny dot com.

Speaker 2 (00:33):
A website isn't a very marketable tool until the time
modems become fast enough to provide for video on demand.
When that happens, hotels and motels will change how they
receive adult programming. That's when the industry will really take off.
David James, Vivid Video.

Speaker 3 (00:51):
There are a lot of computer nerds emerging as porno kings.

Speaker 4 (00:56):
Bob Guccioni, founder of Penhouse.

Speaker 5 (01:01):
Sex sells if widgets sold as good as sex, I'd
be selling widgets, but unfortunately they don't. Seth Worshowski Internet
Entertainment Group.

Speaker 6 (01:18):
Welcome to Jena World. Welcome back to Jenna World. I'm
your host, Molly Lambert. This is episode seven Cybersex. Jenna

(01:39):
Jamison continues her mainstream media tour with an appearance on
The Jerry Springer Show, the popular daytime talk show known
for its provocative topics and confrontational panel segments. For an
episode titled Jenna Jamison Sex Goddess, Jerry Springer, like Howard Stern,
tries to back Jenna into criticizing the industry and saying

(02:01):
it degrades women. Now a professional at this sort of thing,
she refuses to take the bait.

Speaker 7 (02:09):
Do you like to watch?

Speaker 8 (02:11):
Well, you're gonna love this, Jenna.

Speaker 4 (02:17):
Welcome to the show, Jerry Spring talk show host.

Speaker 6 (02:24):
Jenna comes out in a low cut black catsuit with
a gold white chain necklace and her trademark smoky eye
and frosted lip, flashing peace signs and sticking her tongue out.
Jerry starts a full court press, trying to get Jenna
to admit she regrets her choices in life, but Jenna
stands firm.

Speaker 9 (02:45):
Sex is supposed to be really intimate.

Speaker 4 (02:47):
I mean it's personal.

Speaker 8 (02:50):
It's not as intimate in the movies, that's for sure.
It's very mechanical actually.

Speaker 4 (02:56):
Because you're getting directed there, I'm.

Speaker 8 (02:58):
Getting directed, and you're paying more attention to where the
camera is or where you have to open up to.

Speaker 7 (03:05):
You know how that is, Jerry.

Speaker 8 (03:08):
But the more I do it, the better time I have,
because you forget about those things.

Speaker 6 (03:17):
Jerry brings out more porn performers to join the panel
and tries to push them into saying that doing porn
is ruining their personal lives, but all of them say
that's simply not the case, that work is just work,
and real life is still real life. If anything, people
in porn are more careful than civilians about keeping up boundaries.

(03:37):
Jenna emphasizes that making adult movies might be an unusual job,
but it's still a job with hours and regulations.

Speaker 8 (03:47):
I think the sex we have in movies is completely
different than the sex I have at.

Speaker 7 (03:51):
Home with my husband.

Speaker 8 (03:53):
I'm making love with my husband. I'm intimate with my husband.
We love each other. The sex I have with Mark
is not anything close to what I have with my husband.

Speaker 7 (04:05):
That's my job.

Speaker 6 (04:08):
After Jenna and the panel repeatedly explain intelligently to Jerry
Springer that they love their jobs and lives, can maintain
intimate romantic relationships off screen and stand behind the adult
film industry, Jerry still gives a pedantic final address that
condemns them and porn. Jerry says, even if you don't
care what other people think of you, the world will

(04:30):
still judge you, and your life and relationships will be ruined.
It's like he wasn't listening to anything that Jenna said. Meanwhile,
in Ginger World, Vivid stardom, mainstream film work and headlining
national towards exotic dancing have allowed Ginger Linn Allen to
buy a six six hundred square foot seven bedroom home

(04:52):
in Woodland Hills for five hundred and eighty thousand dollars
and a LEXISSUV. The long friend ship and work partnership
between Ginger Lynn Allen and Vivid Stephen Hirsch turns romantic
in the nineties. It starts with sneaking around as he
is technically still with his longtime girlfriend Wren.

Speaker 10 (05:14):
He kept telling Ginger he was going to have her
move out, he was going to pay her off Wayne Allen, Ginger's.

Speaker 6 (05:21):
Father, Stephen Hirsch, and Wren have an acrimonious breakup. He
pays out a big settlement to Wren that acknowledges her
role in creating the Vivid Empire. Stephen Hirsch and Ginger
Lynn Allen go public with their love and things quickly
escalate into talk of marriage and kids. In nineteen ninety five,

(05:43):
ginger Lynn purchases a five diamond gold band at Beverly
Hill's jewelry store, twenty four carrots. She plans to propose
to her boyfriend at a beach picnic, but gets so
excited she brings out the small black jewelry case that night,
but not everything is golden for Vivid's first megastar.

Speaker 11 (06:04):
He said yes, and then I told him something that
changed his mind. Ginger Lynn Allen performer.

Speaker 4 (06:14):
She said, I'm pregnant. He gave her the ring back.

Speaker 6 (06:22):
Ginger Land gives birth on March thirty first, nineteen ninety six,
to a son who she named Sterling Wayne Robert Allen
an Aires. She withholds the name of the father on
his birth certificate. There are whispers that Stephen Hirsch is
allegedly paying ginger monthly child support under the table.

Speaker 12 (06:41):
You know you've really made it when people can print
rumors about you. I'm really not going to comment on it.
I'm not going to glorify this. Stephen Hirsch, Vivid video founder.

Speaker 11 (06:53):
Stephen went from a really sweet, assertive, nice young guy
to very calculating. I think that when you go from
a person who rolls pennies to start your company to
being a millionaire or billionaire, you treat people differently. You
forget where you came from and who you are and
who was there for you.

Speaker 6 (07:14):
The Vivid girls who come after Ginger Lynn Allen are
mostly not given the same level of star treatment that
Ginger got, nor do most of them achieve her level
of success. By the late nineties, the new Vivid girls
have to sign away the lifetime rights to their stage
names to Vivid for merchandise licensing. While Vivid contract girls
still get star billing, they're allegedly underpaid. They get no

(07:38):
royalties or residuals, no cut of the back end. Even
though Vivid constantly recycles old scenes for compilations. Performers only
get paid once upfront.

Speaker 13 (07:51):
You couldn't get me to be a Vivid girl again
if you pointed a gun at my head. They want
too much, They get everything.

Speaker 14 (08:00):
Vivid girl.

Speaker 6 (08:02):
A nineties Vivid girl named Diana Lauren gets paid a
flat fee of a few thousand dollars for her work
headlining nineteen ninety seven's Bad Wives for Vivid, which ends
up making the studio a cool two point seven three
million dollars. But there's a new way that performers might
be able to take financial control and sell their own
likeness without signing a bad contract with a big studio.

Speaker 7 (08:26):
The Internet.

Speaker 1 (08:29):
Everyone told me I should build a website about the
same time my husband installed a new modem in our
computer and showed me his company's website.

Speaker 13 (08:39):
The light bulb went on.

Speaker 6 (08:42):
The first person to cash in on the Internet's potential
as a marketing tool to sell their own sexualized images
online is a woman who goes by the name of
Danny Ash. Danny Ash has amateur appeal. She sells herself
as just a regular girl who wants to share some
horny photos of herself off online for a reasonable fee.

(09:03):
This concept will eventually flood the Internet, but at first
it's just Danny Ash, her modem and her website, Danny's
hard drive.

Speaker 1 (09:14):
I mean, the Internet is almost like a parallel universe.
It represents every possible human thought, feeling, in emotion, both
good and bad.

Speaker 7 (09:22):
It's all there.

Speaker 1 (09:23):
It's a mirror of us, and sometimes, you know, we
don't like to see what's there.

Speaker 6 (09:31):
Danny Ash is born Leah Manzeri in Beaufort, South Carolina,
a capricorn, she uses a fake ID to start stripping
illegally at age seventeen in Seattle, Washington. When she's dancing
at strip clubs, she starts using the stage name danny Ash.
She has natural thirty two double f size breasts.

Speaker 1 (09:54):
I guess I'm an exhibitionist, but that's not quite true.
Part of the reason is that I developed bread. It's
at an early age, and breasts are a very sexualized thing.
At an early age, I was getting a lot of
sexualized attention. Eventually, I just felt that stripping kind of
put all that stuff out on the table.

Speaker 6 (10:14):
At age twenty two, danny Ash moves to La to
do lingerie modeling and shoot softcore. She continues to do
exotic dancing and strip clubs across the country. On a
tour date in Jacksonville, Florida, she's encouraged by one strip
club's owners to dance fully topless, then busted by cops
for violating local laws. It's a setup. She's arrested in

(10:38):
Florida for prohibited conduct and fined fifty bucks with a
guilty plea after the club's owners and her tour booking
agent hang her out to dry on the toplessness charges.
Danny decides she needs a career change where she can
have more personal control. She wants to become a computer programmer.

Speaker 4 (10:58):
I'm a bit of a geek.

Speaker 15 (11:00):
Yeah, I'm a geek with big breasts.

Speaker 6 (11:05):
Danny starts going on usenet newsgroups, a precursor to Internet forums.
Some of her softcore picks have been posted on usenet,
and she interacts there online with new fans. Danny's husband
works for the movie theater chain Landmark, and shows her
the brand new Landmark Theater's website, which lists up to
date information about what movies are playing at Wich theaters

(11:27):
and when they're showing. Listing movie show times was previously
the purview of local newspapers, and a toll free number
called Movie Phone. You called to hear a man's pre
recorded voice tell you when Polly Shores Jury Duty is
showing in Van Nuys. The Landmark Theatre's website and the
usnet newsgroups light up a big neon sign over Danny's head.

(11:48):
There's a new way she can sell and provide personalized
but limited access to herself. She won't have to work
at shady strip clubs for owners that sell dancers out
to the cops for a kickback. She won't have to
be around customers physically at all. She will start a website.

(12:10):
Danny ash reads an HTML manual and teaches herself rudimentary coding.
In July of nineteen ninety five, she launches a website
at Danny dot com called Danny's hard Drive, where she
posts daily news articles and jokes. There's no paywall at first,
just info about where to send fan mail or where

(12:30):
to see Danny dance on tour. Then she starts charging
fifteen bucks a month for membership. The main draw is
an online directory of adult models with their own photo
web pages, anchored by content of Danny and her double
f breasts.

Speaker 1 (12:49):
I think that the average visitor to Danny's hard Drive
is someone who's more of a fan, someone who's generally
interested in knowing about the women they have fantasies about,
wanting to have a more well rounded fantasy, a little
more reality in the information.

Speaker 6 (13:07):
The site is so overloaded with traffic after launching that
the server shuts down and Danny dot com has to
move to its own server. In pioneering the business model
for selling sex on the internet, Danny also pioneers a
set of systems for doing so that she cashes in
on by selling the tech to other people.

Speaker 1 (13:27):
Last year, Danny's hard Drive made six point five million dollars.
This year we expect to make eight million. We've had
to develop a lot of technology to support the business
of Danny's hard Drive, streaming video technology, hosting technologies, credit
card scrubbing technologies, processing customer service, and all of these

(13:50):
things are now working so well that they have value
to other companies, and we're beginning to market those technologies
to other companies, and that's actually the largest area of
growth in our business right now.

Speaker 6 (14:04):
Danny ash self frands herself as the most downloaded woman
on the Internet. Her content is strictly softcore, which is
less profitable than hardcore, but falls within her own personal
comfort zone. She markets the site to lonely men who
want to engage with a beautiful woman through the Internet
who they could never talk to in real life, and

(14:24):
for that privilege she charges them.

Speaker 1 (14:28):
I'm not a psychiatrist, but it seems to me the
more you repress your sexual feelings, the more they're going
to pop up somewhere else in a really unhealthy way.
In our culture, we repress a lot of sex, and
we repress our anger. And what you see coming out
is a lot of violent pornography. And you know, it's

(14:48):
my theory that that's a direct result of our culture's repression.

Speaker 6 (14:56):
By nineteen ninety six, the Internet sexual revolution is well underway.

Speaker 7 (15:00):
Just as VHS obliterated.

Speaker 6 (15:02):
Film and remade the eighties porn landscape, it's clear that
the Internet will have a similar effect in the nineties.
And while adult creators and consumers are excited about the
new possibilities of the web, not everyone shares their excitement.
The idea of photos and videos showing naked people and
sexual content migrating online concerns a lot of folks who

(15:24):
worry that kids will see it.

Speaker 16 (15:28):
There's no warning. You can gain access to any kind
of material without any preparation. A twelve year old could
have downloaded that same material. That's the part that really
scares me. Ray Solar, founder of Safeserf.

Speaker 17 (15:43):
The most precious thing a child has is, of course,
their innocence.

Speaker 13 (15:48):
Wendy Simpson Safe Surf.

Speaker 6 (15:53):
San Fernando Valley couple Ray Solar and Wendy Simpson set
up the first restricted Internet browser called safe surf. Porn
isn't the only thing that people are worried will disseminate
unchecked online. There's also concern about hate speech, images of gore,
and easily accessible bomb making instructions, which you can find

(16:14):
at Easily Accessible bomb Making Instructions dot com.

Speaker 7 (16:18):
Vivid David James.

Speaker 6 (16:19):
Says he endorses a service like safe Surf, and that
he agrees children should not have access to Vivid's new
homepage Vivid dot com.

Speaker 16 (16:29):
We're not saying we want you to stop what you're doing.
We want you to do it in a responsible way.

Speaker 6 (16:36):
Online sexual content is frictionless and fluidless. It can be
accessed with one click of a mouse and closed with another.
The promise of a portal into a world of sex
that exists discreetly away from real life is well seductive,
But even when the window closes and the computer shuts down,

(16:56):
the web's tendrils still creep into offline life. One sided
transactional content consumption relationships of the kind offered by creators
like Danny Ash are neither real exactly nor fake exactly,
but a third thing called parasocial. While people have long
had parasocial relationships with celebrities, and fictional characters. The Internet

(17:20):
creates these kinds of interactions between real people online and
their customers or consumers. They develop a false sense of
knowing someone, but it's a one way mirror. When general
world returns, the Internet changes the world of adult content forever.

(17:48):
Welcome back to general World.

Speaker 18 (17:56):
The issue of privacy is huge. The online sex industry
is promise is you don't have to be peewee Herman,
and we're in the age of aids. The websites are
amazing safe sex, Alison Grippo, author of Netlove.

Speaker 6 (18:12):
By the mid nineties, the Internet is still just a
tiny slice of the adult money pie. The bulk of
the sex businesses eight billion dollars in sales, still comes
from videotapes, magazines, peep shows, and softcore cable programming on
channels like Playboy and Spice, But the Internet is growing rapidly.

(18:34):
By nineteen ninety six, the online sector is netting around
fifty one point five million dollars, with projections of two
hundred million by nineteen ninety seven.

Speaker 19 (18:45):
We have customers who spend one hundred and fifty dollars
a month up to six thousand. That's twenty hours a month.
They fall in love. Barbara Bailey, owner of videophone sex
site Pleasure Girls.

Speaker 6 (19:00):
Danny ash and others like her, clock early on that
the Internet is quickly going to surpass all other forms
of media. They're getting in on the ground floor of
the next gold rush, racing to see who can get
adult content online first, for what's being called hyper porn.
But there's already an established precedent for the internet's sex business,

(19:22):
a small, but concentrated, financially robust, subterranean cultural industry known
as audio text or phone sex.

Speaker 4 (19:33):
What is the net. It's just a phone call with pictures,
Tim Elliott, president of the Teleservices Industry Association.

Speaker 20 (19:48):
Phone sex was the first leap into interactivity. It's interactive
in a way that video could never be. Everybody's moving
to computers, but it's the same group of people. Stephanie
Martin Babes for you website.

Speaker 6 (20:03):
The phone sex industry is pioneered by Gloria Leonard, the
pornstar and High Society magazine editor we told you about
in episode two, Gloria Leonard tapes herself describing the contents
of the next issue of High Society as a recorded
message that can only be accessed by calling a nine
to seven six pay number. She realizes that charging people

(20:25):
to hear dirty talk could become its own profit stream,
like an audio peep show. She tells her boss, Carl Rudermann,
that they should buy pay phone numbers for these dirty
talk hotlines and then advertise them in high societies back pages.
Phone sex lines take the interactivity of peep shows and
cut out the physical component. Some operators follow a script,

(20:48):
but there's a lot of room for improvisation. Phone sex
calls tend to end abruptly when the caller finishes. In
New York, there's a couple of companies running conference call
hotlines like five five O Love out of offices in
Manhattan Brownstones. But the biggest phone sex tycoon is a
guy named Joel Eisenberg in the city of Seattle. Eisenberg's company,

(21:12):
called Megaquest, controls eighty two entities providing phone sex lines worldwide.
Joel Eisenberg is notorious for other non sex hotlines, like
the nineteen eighty nine Dial a Santa scam, where Megaquest
ran local infomercials on Seattle TV stations telling children to
call a hotline posted on screen to talk to Santa

(21:33):
Claus directly about their Christmas wishes.

Speaker 7 (21:36):
A good number of kids.

Speaker 6 (21:38):
Managed to call in and rack up their parents' phone bills.
Despite getting busted by the IRS in the early nineties,
Megaquest continues to thrive and Joel's son Ian Eisenberg, takes
up working there too. But the Eisenberg phone sex dynasty
will be usurped by an ambitious, cutthroat young interloper. His

(22:01):
name is Seth Warshovski.

Speaker 5 (22:05):
Look at Viacom, Time Warner or the contents of Cablevision.
All of them derive a huge amount of revenue from
adult content, but they don't call Time Warner smut.

Speaker 6 (22:16):
Seth Warshovski an Ares is born in Queens, New York,
the son of two Polish Jews. His father sells cable
and his mother works in the insurance industry. When Seth
is seven years old, his family moves from New York
to Seattle. At age thirteen, Seth starts running an online
bulletin board called dungeon Quest. Dungeon Quest's users pay him

(22:40):
to access online adventure quest games. He says he charged
two dollars a month for a membership and made around
two hundred dollars a month. Watching TV late at night
at his parents' house in the Seattle suburbs, seth Wwarshovski
sees a thirty minute infomercial for one of mega Quest's
phone sex hotlines. Now seventeen years old, Warshovsky is too

(23:03):
young to legally call the number himself, but the whole
thing makes a huge impression on him. Visions of dollar
signs and sex hotlines start to dance in his head.
Seth Wwarshovski drops out of high school and moves out
of his parents' subourban home to an apartment in Seattle,
where he works as a valet and side hustle, selling
hand embroidered shirts to local stores and nordstrums. He tells

(23:25):
people that he just wanted to go out and make
his own fortune, but later admits that he ran away
from home after coppying juvenile charges for unlawful issuance of
a bank check and two counts of felony theft. In
nineteen ninety three, he gets charged as an adult when
he's caught trying to sell a stolen laptop.

Speaker 5 (23:46):
I was always fascinated by Ian. I always wanted to
try to reach his level.

Speaker 6 (23:53):
By the early nineties, phone sex is a sixty million
dollars a year industry. Sethwarshovsky befriends Ean Eisenberg, who brings
him in to start learning the phone sex biz. Eanc
Seth has no threat to the megaquest father Son phone
sex Empire. He just thinks Seth is interested in the
nuts and bolts. He doesn't realize he is training his

(24:15):
own replacement. Sethwarshovski takes out a credit card and runs
up a seven thousand dollars line of credit that he
uses to start a hotline company called JNS Communications. Their
first official hotline is one nine hundred Get Some.

Speaker 4 (24:32):
I still have that number.

Speaker 6 (24:35):
The technology is primitive at first. One nine hundred Gets
Some leads callers to an answering machine service where they
have to state credit card info. This sends an alert
to Sethwarshovski's pager. Once their credit card has been run,
the customer gets a callback from a dirty talking female
phone sex operator. One nine hundred Gets Some charges forty

(24:56):
bucks per sexy phone call and gets about sixty customers
data start, which then rockets up to five hundred customers daily.
He starts up more companies in LA and Canada with
names like telecom development company running hotlines for long distance
calls and psychics as well as sex.

Speaker 4 (25:19):
One of our psychics is a transsexual.

Speaker 5 (25:21):
She says, we can't put her in the same space
as all the other girls because she can't handle the energy.
It's going to interfere with her psychic vives?

Speaker 4 (25:28):
Is that what it is?

Speaker 6 (25:31):
As Warshowsky's phone sex empire grows and profits millions, he
ends up locked in lawsuits with the Eisenberg family over
a call automation system Megaquest says is proprietary.

Speaker 7 (25:44):
The phone sex.

Speaker 6 (25:44):
Hotline gold Rush hits a snag in nineteen ninety five
when the Federal Communications Commission bans a type of number
called ten triple X that guys like Warshovsky used to
scam callers. Ten triple X numbers root calls through countries
like Guiana in order to ring up large international bills.
After nineteen ninety five, hotlines are limited to eight hundred

(26:08):
and nine hundred numbers where customers have to manually enter
credit card info, which gives callers crucial extra time to
back out of the transaction and so Sethwarshowski takes his
business to the next media frontier online.

Speaker 5 (26:26):
That's what it's going to take to make money on
the net, ease of use and instant gratification.

Speaker 6 (26:33):
Seth tries out early video conferencing technology called CEU see me,
whose main client is the US military. See uc me sucks,
It's laggy and low quality. Then he sees an erotic
website called Sizzle that hosts a video livestream of a
Vancouver strip club that you pay to watch.

Speaker 4 (26:56):
It was unbelievable.

Speaker 5 (26:58):
This was not just phone sex, This was not just
Hustler magazine, This was not just video six. This was
all of it in one, a true multimedia experience that
encompasses every facet of entertainment.

Speaker 4 (27:11):
I'd never seen anything like it.

Speaker 6 (27:14):
So Sethwarshovski gets a meeting with Starnet Communications International, the
Canadian company behind Sizzle, where he asks them a lot
of very detailed questions.

Speaker 21 (27:26):
We gave him a full rundown on what our net
business was like, and he decided to do it himself.
We were not too thrilled with how things ended up.
Jason King, Starnet.

Speaker 4 (27:38):
We couldn't come to terms.

Speaker 5 (27:40):
We wanted to take an extremely aggressive approach to the net,
to take a high risk and see what came back.
I think we scared them, so we decided to copy
or knock off what they were.

Speaker 4 (27:50):
Doing, and we took it to a whole new level.

Speaker 6 (27:55):
Sethwarshovsky puts three million dollars into a new business venture
that he calls Internet Entertainment Group aka IEG.

Speaker 7 (28:05):
IIG has two high.

Speaker 6 (28:07):
Speed T three Internet connections, twenty six servers, and forty
eight PC computers. IG's first venture is a camgirl site
originally called Candyland until they get sued by Hasbro, makers
of the children's board game Candyland. Warshovsky buys a warehouse
in downtown Seattle by the waterfront and converts it into

(28:30):
a studio for IEG. After the Hasbro copyright infringement suit,
Candyland dot Com rebrands as Clublove dot Com. IG hires
eight graphic designers and three computer programmers who work on
compression techniques, while IEG's twenty customer service representatives work customers

(28:51):
over the phone to coax credit card numbers out of them.
Seth starts another new company called Interfund Financial Services that
in cryp's credit card charges so they don't appear on statements.
Since shame and privacy are a major hurdle for getting
people to buy adult services online.

Speaker 5 (29:10):
If you're going to take money from somebody, you want
to make it the easiest thing in the world.

Speaker 6 (29:16):
Warshovsky's partner in IIG is a woman named Ruth Parasol,
a Californian child of a Swedish mother and a Jewish
Polish Holocaust survivor father named Richard Parasol. Her parents ran
a successful chain of massage parlors in San Francisco's Tenderloin
red Light district in the seventies and then invested into

(29:36):
phone sex lines. Ruth Parasol grew up in Marin County,
went to law school, and then got into the family
business of phone sex. In nineteen ninety six, Ruth Parasol
sells her interest in IIG to Warshovski and moves into
another lucrative new business sector, online gambling, starting a website

(29:57):
called pardipoker dot com. While many in tech nineteen nineties
gold Rush are promising they'll soon be able to deliver fast,
high quality video streaming technology for video conferencing, it's in
the adult entertainment sector where that tech is developed first,

(30:18):
and best IEG has the thing the rest of the
Internet desires most. Streaming live video it may be glitchy
and slow, but it has naked women, and it's accessible
through the touch of a button. The future that was
promised by computers.

Speaker 3 (30:37):
The adult firms are simply more willing to try new technologies.

Speaker 4 (30:43):
Mark H.

Speaker 6 (30:43):
Bell Bell Technology, Bell Technology, who provide video services for
Microsoft and General Electrics NBC Network beta test new technology
with adult companies. Penthouse tests and experiment new software with
live online video channels whose layout mimics cable TVs. Playboy

(31:06):
has been selling a digital version of their print magazine
since nineteen eighty seven, but struggles to compete with the
new web companies like IEG, so Playboy leans into its
signature formula gauzy, softcore photos of naked chicks with smart
women working behind the scenes, women like Eileen Kent, who

(31:26):
becomes Playboy's first Vice president of New Media. Kent is
an early adopter of new technology who sets up a
bulletin board system for the Playboy staff and helps to
shepherd the magazine's move online. Playboy holds a publicity stunt
model call for a feature called Girls of the Net.

Speaker 13 (31:46):
We don't just appeal to the libido, we appeal to
the intellect. We are looking for women who know how
to use computers, who're working on their careers, rather than
objectifying women like some people say we do. The Internet
stands for freedom, and the philosophy of the Internet is
the same as the Playboy philosophy. Eileen Kent Playboy.

Speaker 6 (32:10):
Much like Stephen Hirsch thought would happen with the rise
of video. Eileen Kent believes that the anonymity allowed by
the Internet will bring a new audience of women to Playboy.

Speaker 7 (32:21):
While there is a stigma.

Speaker 6 (32:22):
Associated with buying a dirty magazine or renting a porno tape,
the Internet is an ultra private, seeming place emphasis on
seeming to look at horny images. Eileen Kent is also
the brains behind Playboy launching an official glossy magazine website
at playboy dot com and a secondary website just for

(32:43):
paywalled adult content at cyber dot playboy dot com. There's
also the cyber Club, in reference to Hugh Haffner's Playboy Club,
a message board where you can talk about and maybe
even two the beautiful playmates from the magazine.

Speaker 13 (33:00):
What Playboy has always done is to teach men how
to behave around women, which boils down to don't be
a jerk. Women love to talk and offer counterpoint. Now
we're offering them the tools to speak their minds.

Speaker 6 (33:18):
The first major attempt to legally regulate content on the
Internet is the Communications Decency Act, part of the Telecommunications
Act of nineteen ninety six. The CDA would criminalize the
transmission of obscene material to minors, but nineteen ninety seven's
landmark Reno Versus American Civil Liberties Union Supreme Court decision

(33:38):
rules unanimously that the Communications Decency Act would violate First
Amendment protections of free speech. It is the first major
Supreme Court ruling on Internet content regulation and a tremendous
win for pornographers.

Speaker 4 (33:55):
You never really lose.

Speaker 5 (33:57):
It's cheaper to produce than mainstream content, and it's easy
to sell.

Speaker 6 (34:02):
By nineteen ninety seven, Seth Warshovski is twenty four and
making twenty million bucks a year from IEG's pay sites
hosting some of the first camgirls who strip and masturbate
on camera. Low res as they might be, the streams
are immediate and somewhat interactive. By nineteen ninety seven, there

(34:22):
are twenty eight thousand sex websites. According to one survey
of the new industry, Some of them sell explicit videos
or stills, but it also counts stuff like free erotica
stories and a bulletin board site developed by a computer
programmer in Houston called the Masturbation Homepage where commenters share
anonymous stories about masturbating. By nineteen ninety seven, it is

(34:47):
estimated that approximately thirty percent of people who use computers
have used them to look at some form of adult
content online.

Speaker 4 (34:57):
With sex, you're hitting a few key areas. Number one one,
it's anonymous.

Speaker 5 (35:01):
Number two, everybody has a desire for it, everybody.

Speaker 4 (35:06):
Number three it's a very impulsive.

Speaker 5 (35:08):
Purchase, and you provide them with an immediate delivery so
they can gratify their desire.

Speaker 6 (35:15):
But while eyes are moving online, they are not necessarily
followed by wallets. Most late nineties adult websites can only
monetize nickel and dimes off of ad banner clicks. Only
a handful of people like Danny ash and Sethwarshovski are
making real money from hard content sales. By nineteen ninety seven,

(35:36):
online sexual revenue numbers range somewhere between one hundred million
and three billion dollars, which is a very wide spread.
One thing's for sure, they are climbing astronomically, and traditional
porn studios like Vivid are watching cautiously to see how
the legality shakes out.

Speaker 12 (35:58):
We feel that at some point there will be legal
action taken against the US based site that shares hardcore material.
We're a high profile company. We'll have to see what
happens with some of the people who take that shut.

Speaker 22 (36:10):
What we're doing is providing entertainment that is protected by
the First Amendment. We're adhering to capitalist principles and a
strict construction of the Constitution. I don't see a problem
with people doing business just to make money. That's what
business is. Derek Newman ieg.

Speaker 6 (36:30):
And while they're already doing it in Europe, there's still
no hardcore sexual content online in America because companies fear
the potential legal repercussions. So in the late nineties, most
online sex content is limited to softcore Anthony Bourdain voice
no penetration, until a Florida company named Webpower, behind the

(36:54):
site Amateurhardcore dot Com, starts testing the limits of online
free speech by post allegedly amateur sex videos that show
real erections and full on penetration. A web usage tracker
says amateur hardcore dot com is the sixteenth most visited
website in nineteen ninety seven, way ahead of site views

(37:16):
for mainstream media companies like CNN dot com and Disney
dot com. The wars over Internet content and free speech
are progressing in American courts, and so far they are
tipping in favor of First Amendment protections for free speech online.

Speaker 5 (37:34):
This is a high margin product that's in demand. People
want to pay top dollar for it. I don't mix
business with pleasure. The woman at the arcade that doesn't
excite me. When we first saw that phone sex commercial,
was like, hey, not only will we make a fortune,
but we'll meet tons of women dead lasted about a week.

Speaker 4 (37:56):
It's just so normal for me now.

Speaker 6 (38:00):
Twshovski's Clublove dot com website might not be an established
name like Penthouse or Playboy, but by the late nineties
IIG is way out earning the much bigger legacy brands.
IIG makes us secondary buck selling software packages to other
new adult sites because it's cheaper than sites paying for
production themselves. Because livecam technology is so new, it requires

(38:24):
putting a lot of money down for new equipment in
studios and has a digital learning curve, so a lot
of new companies outsource tech and troubleshooting to companies like
Danny Ashes or IIG. Stephen Hirsch contracts IIG to build
vivid dot COM's website for them.

Speaker 12 (38:44):
Seth is a pioneer, he has a vision. He's very
talented and very creative, and in this industry there are
only a few people like that.

Speaker 6 (38:54):
When General World returns, the Internet sex gold Rush goes
for Broke. Welcome back to General World. Internet Entertainment Group

(39:16):
also has cam boys whose live feeds appear on gay
adult websites like steel City and Vivid's gay imprint Vivid Man.
In addition to web companies grinding out a constant feed
of new original online content, there are also bootleg operations
posting galleries of digitally scanned images of centerfolds and porn stars.

(39:37):
This type of content stolen and posted in violation of
copyright laws is known as pirated content. IEG doesn't pirate,
but it double dips, selling the same camgirl feeds to
multiple sites at a time. The IEG cam feeds run
on sites with names like Buttsville and AlleyCats with a z.

(40:00):
AlleyCats is run by two guys who go by the
nicknames Kizzie and Cheese. AlleyCats is one of the first
sites to use pornstar's images as lures to draw clicks,
the very same way Showgirls were used to lure customers
into casinos to spend money. Kizzie and Cheese break fig
with Alley Cats after they add IEG's streams to the sites,

(40:23):
and their sudden financial windfall enables them to move into
a mansion in the Hollywood Hills. After making two million
dollars in nineteen ninety six, they sell off half the
company for a million bucks to some Beverly Hills real
estate developers. Kizzie and Cheese put that million into a
new website called Sportsbook, a sports gambling website based in Aruba.

(40:46):
Online gambling booms through extra legal loopholes, as internet porn
is also financially taking off. The world Wide Web is
the newest wild West, and there's gold in them bar Hills.

Speaker 23 (41:00):
We intend to be a joyous nexus in the lives
of our users, and there's money in that. Steve Becker
Penthouse Live.

Speaker 6 (41:10):
After a long negotiation Sethwarshovski signs a five year deal
with General Media, Inc. Who owned the Penthouse brand for
IEG to provide their live video services for the Penthouse
Live site. Sethwarshovsky sees this as IEG's first step into
the world of mainstream business.

Speaker 23 (41:30):
We see ourselves evolving into a twenty four hour, multi
channel interactive broadcast facility that will include user generated channels
created on the fly, so you can create your own
live interactive channel by clicking on a button, just like
a chatroom on AOL. Today, the consumers are the content.
It's a very exciting time to be alive. Like three

(41:52):
weeks after Gutenberg invented the printing press.

Speaker 6 (41:57):
In nineteen ninety seven, Sethwarshovski is on the cover of
The Wall Street Journal. Build as a new tech mogul
to expand its content model and find new customers and
new income streams, IIG launches its first non adult sites,
a website with live streaming psychics in collaboration with New

(42:17):
York Psychic Readers Network, best known for the Miss Cleo
series of infomercials. There's also telelawyer dot com with live
streaming lawyers. You can pay for advice and help filing paperwork.

Speaker 7 (42:30):
And while everyone is.

Speaker 6 (42:32):
Moving online, most people are not monetizing it. Like Sethwarshovski
is high traffic websites for mainstream entertainment brands like ESPN's
Sports Zone can't figure out how to turn site views
into paid subscriptions. Newspapers like USA Today launch online with
a paywall, lower it, then drop it back to free

(42:53):
after not enough people subscribe.

Speaker 5 (42:56):
Our goal is not only to be an adult content provider.
We want to be the Viacom of new media.

Speaker 6 (43:05):
Seth Twarshowski foresees the future where all media will move
to the Internet. He knows TV and other traditional media
companies will need his online video expertise, even if he
is a smut peddler. In nineteen ninety seven, he takes
meetings with Viacom and Time Warner, telling them how networks
like HBO and MSN could transition onto the web. He

(43:28):
swears that live streaming video that isn't slow or pixelated
is imminent. The technology is advancing rapidly every year. Club
Love charges forty nine dollars and ninety nine cents for
a thirty minute clip. Club Love also innovates a way
for viewers to see videos without downloading a telltale separate program.

(43:50):
The live video section of Club Love is called Arcade,
where cameras and occasionally porn stars like Kylie Ireland perform
live IEG. The studio has fourteen camgirls on staff and
four sound stages jim shower, dungeon, and bedroom. There's also
a toilet cam and a dressing room cam. Customers pay

(44:13):
to pretend they are spying voyeuristically on someone who in
fact knows that they're on camera. Iig's talent director is
a thirties Ish businesswoman named Marra Meren, who Sethwarshovsky Post
from the Eisenberg's company. Mara Meren supervises the camgirls as
well as seven camboys at Manhole, iig's live gay camming site,

(44:38):
which operates out of Maren's house in the Seattle suburbs.
When the sites aren't live for business, they run recycled
footage from previous broadcasts. When there are no viewers logged in,
nobody has to perform.

Speaker 15 (44:53):
They're smart and well behaved, and unlike phone sex, our
guys say thank you when they're done. Believe me, it's
much appreciated. Laura Camgirl.

Speaker 6 (45:09):
Some of IEG's live streamers are local exotic dancers who
get online like Danny Ash to make money stripping without
hazards like workplace sexual harassment, customers stalking you in the
parking lot after the show, or managers stiffing you on
your tips. Other cameras are local Seattle artists, musicians, and
college students who look at camming as just a way

(45:31):
to make some money so that they can focus on
other things in their life besides working. They're young gen
xers who are way past the is it empowering or
degrading politics of the early porn wars. As far as
riot girls and boys are concerned, shaking what the lord
gave you for twenty bucks an hour is less degrading

(45:52):
than working a shitty service job or some white collar
office drone work. Laura is a skinny white camgirl with
a bleach blonde buzz cut who says as much.

Speaker 15 (46:03):
I can't believe I actually get paid to work here.
I mean, come to a really nice environment to goof
around nude for the benefit of unseen admirers. What could
be better?

Speaker 24 (46:17):
Once you're in an area like this, you see adult
film stars come in. They're real people, they're nice. It
doesn't feel like you're walking into an adult film shop anymore.
Sometimes it even feels like work. Rod Colin Graphic designer.

Speaker 6 (46:34):
The offscreen office workers at IEG are likewise not that
personally invested in the company itself. They treat it like
a day job, not a means to get stock options.
When the company goes public, like Warshovski is aiming for,
they pursue their own real passions off the clock.

Speaker 5 (46:55):
We view the net as an interactive TV type thing.
Right now, it's a novel. But when the mediums converge
and you have true interactive TV, it's.

Speaker 4 (47:03):
Going to be unbelievable.

Speaker 5 (47:06):
You could be watching CNN and your stock quotes would
pop up on screen. You could be reading Penthouse magazine
and an adult film star could pop up and talk
to you in broadcast quality thirty frames a second.

Speaker 4 (47:18):
Truly interactive anything could happen.

Speaker 17 (47:23):
Nobody wants to admit that their network is being used
to distribute smut, but in fact it's a very profitable
part of their business. Jeffrey Rayport, Harvard Business School.

Speaker 6 (47:37):
Ninety percent of Club Loves paying customer base consists of
businessmen age eighteen to forty, logging on from work. The
model Club Love customer is a male college student who
has free time, curiosity, and a credit card. Like a
strip club the site develops a clientele of regulars who

(47:57):
have their favorite performers, and a lot of those customers
aren't just horny, they're lonely.

Speaker 15 (48:06):
A lot of them are very clear about what they
want to see and what they want you to say.
I mean, you get guys you want to see your ass,
but I actually get more requests from guys to wave
at them than to show my ass. It's really important
for them to know it's live.

Speaker 6 (48:22):
You can pay an extra fee to call a performer
on the phone and talk with them while they live stream,
like Peep show Girls once did. Behind Glass. You can
buy a monthly membership for nine dollars and ninety five cents,
or do one off purchases of videos like The Cable Girl,
a porn take on The Cable Guy. There's up selling

(48:42):
opportunities for special items like massage lotion, which you can
pay to watch the streamer apply. You can buy dirty
bedtime stories for the camera to read to you live.
IEG is constantly expanding its content offerings into new fields
like strip, blackjack, and dominatrix sessions. By nineteen ninety seven,

(49:04):
Sethwarshovsky claims that Club Love is making twenty five thousand
dollars in profit a day off a combo of membership sales,
live videos, and add on extras. Sethwarshovsky buys a cell
phone and a black BMW seven forty that he is
legally prohibited from driving because he lost his license after

(49:24):
twenty moving violations. He hires a driver to take him
in his BMW do IEG's Club Love Studios at the
refurbished loft building by the docks. Since he can't drive
a car, seth gets a boat and takes it out
on Puget Sound, going seventy miles per hour.

Speaker 22 (49:43):
He's very scary when he's in that boat. He's the
most driven person I've ever come in contact with.

Speaker 6 (49:51):
Warshovsky's corner office at Club Love's headquarters has a black
leather couch and a bunch of wakeboards leaning against the wall.
He eats a pro rodo tech bro diet of protein
boosts like sliced turkey every two hours and lots of vitamins.

Speaker 5 (50:08):
I have so much energy, I have to take melatonin
before I go to bed.

Speaker 6 (50:13):
His king sized bed is in a condo across the
street from the IEG office tower, which he needs to
live close to because he can't Drive. He's lived in
the condo, which has green marble counters and giant glass windows,
for two years. A telescope is positioned looking out the
window towards downtown Seattle.

Speaker 7 (50:32):
On the walls.

Speaker 6 (50:33):
He has abstract paintings leased from the Seattle Art Museum,
a handful of books, and no personal effects or photos
displayed whatsoever.

Speaker 5 (50:44):
My parents are proud of me. I'm a successful businessman.

Speaker 6 (50:50):
While some speak kindly about Seth, others are not fans
of the young Seattle video sex tycoon. He gets knocked
the fuck out by an industry colleague for being a
dick at a phone sex trade show in Century City.
At IEG he runs through a lot of young, hard
working staff and maintains a work atmosphere some find overly

(51:13):
high pressure. Working for a temperamental twenty six year old
man with his own media company can be humiliating in
its own special way.

Speaker 22 (51:24):
He's a tough guy to work for. He stresses people out.
He's very intense. He doesn't stop and ask how your
day is. He's not a people person, but he's got
a big heart. He's very generous, but he's not the
most human person.

Speaker 6 (51:42):
Warshovsky has defenders like Derek Newman, who says his boss
lets employees bring their infant children to the office. But
he also has enemies like Joseph Kowati, who runs rival
live campsite Iebroadcast and gets in a screaming fight with
set outside a bar in Seattle that with Kowati spitting
in Warshovsky's face. Warshovski sues him for a million dollars

(52:06):
for livel.

Speaker 10 (52:08):
Seth gets a lot of business off the media, which
kind of separates him from the low key players. Let's
face it, everybody has heard of IEG and Club Love.
How many other adult sites can you think of? Joseph Kowati?
I broadcast.

Speaker 4 (52:24):
Every goal I've set for myself I've achieved.

Speaker 6 (52:30):
There are also more women starting sexual websites. Video artist
Madeline Altman and adult film distributor Stephanie Martin raised two
hundred thousand dollars in startup capital and launch Babes for
You in New York with company Albemar Inc. Altman and
Martin see the Internet as a way to expand sexual

(52:51):
imaginations beyond the fantasies of guys like Bob Guccioni and
Hugh Hefner.

Speaker 25 (52:58):
It's a new language of sexuality. With video phone sets,
you can ask somebody to do kinky things, but it's
still completely anonymous. Something like this has never existed before
in our history. I'd love to tie up a man,
to see his balls tied up, but I'm not going
to because as an American, I'm uncomfortable talking about sexuality. Now,

(53:21):
I'm able to act out my fantasy with another human being,
but I don't have to go to some weird place,
ask somebody to come to my house and put myself
in a compromising situation. Suddenly on the net, this is
not a fantasy anymore, Madeline Altman, Babes for You.

Speaker 6 (53:41):
Babes for You are turning a profit a mere eight
months into operation, fielding one hundred clients tuning in daily
to see their cams. The web is a powerful tool
for private exploration of fantasy images and scenarios. The Internet
might also be allowing women to suddenly act says sex
the way men have been able to historically. As a consumer,

(54:06):
the world of what you can have access to a
fantasy of tying a guy's balls up, for example, is
opened with money. Sex can be purely transactional. It can
also be a deep expression of feelings. But it can
be this other thing too.

Speaker 26 (54:26):
The VCR has gone a long way to legitimize consumption
of adult material, and yet if everyone who rented adult
videotapes was as vocal as the people who owned guns,
you could not get elected to public office in the
United States without talking about how often you whack off
to porn.

Speaker 4 (54:43):
Christoph Pettis blowfish erotic toys.

Speaker 6 (54:48):
There's yet another media shift approaching on the late nineties. Horizon.
Digital video discs or DVDs, are a new type of
home media, poised to replace vhs with better clarity of
image and the ability to easily skip around to any point.
David James from Vivid thinks on demand video will surpass

(55:10):
all forms of physical home media in profits, and he
will get half of that right.

Speaker 12 (55:17):
People know how to find us.

Speaker 6 (55:21):
Stephen Hirsch's Vivid Empire continues to grow. The company moves
from its original offices in a dilapidated part of the
valley to a prime new location in Studio City off
the Koanga Canyon Pass, which cuts through the hills and
physically connects Hollywood to the valley. Vivid Video is renamed

(55:43):
to Vivid Entertainment and relocates into a fancy modernist office
building with a balcony. There are blue Vivid Entertainment signs
a fixed on the side of the building and the
Vivid logo a V within a star. The Vivid sign's
globe blo at night, greeting motorists as they enter and

(56:03):
exit the valley. Vivid's new location puts it right by
the studio lots for Universal Pictures and Warner Brothers, and
makes a statement Vivid is a real studio too. Steve
Hirsch spends his share of Vivid's profits on expensive pleasures
like luxury cars, box seats for Bruce Springsteen shows, and

(56:25):
prehistoric fossils. He splashes out big time to build a
personal collection of presidential Americana whose crown jewels are a
death mask of Abraham Lincoln and a lock of hair
from one of George Washington's wigs. The message is loud
and clear. Vivid Entertainment and pornography are as all American

(56:45):
as apple Pie.

Speaker 1 (56:48):
I think Vivid and Wicked have done a really good
job of working towards mainstreaming the industry. They've used a
star system, and they make celebrities out of their contract
stars and it's done a lot. I think for adult
entertainment's image, it is getting more mainstream, and I think
a lot of the press coverage I've got has in

(57:09):
a way helped make the business more mainstream. You know,
ultimately we will arrive at more European values and people
will lighten up about sex a little bit. But right
now it's still pretty taboo.

Speaker 19 (57:25):
I'm a valley girl. You can't get me out of
the valley. I'm still here.

Speaker 6 (57:31):
Cindy Margolis, another early Internet star, is a bottle blonde
Jewish la girl named Cindy Margolis born Cynthia don Margolis,
a Libra, Cindy is a cal State Northridge student taking
business classes. For her final project, she makes business cards
with a cheesecake lingerie photo of herself printed on one

(57:54):
side and her phone number on the other. The business
cards land her some modeling work, and she runs the
gauntlet of opportunities for bikini models, doing print ads, woodworking
shows as misspower Tools, appearing as one of Bob Barker's
beauties on the Prices Right Yikes, and playing one of
the fembots in the first Austin Powers movie. Like Danny Ash,

(58:19):
Cindy Margolis sees the potential of the Internet as a
tool for self promotion, where an aspiring glamour model can
go from disposable cog in a big machine to a
brand all her own. She starts a website, cindymargolist dot com, and,
much like Danny, Cindy brands herself as the Queen of
the Internet and the most downloaded woman. Her webpage gets

(58:42):
written up in print magazines, where they call her cyber Cindy.
According to Cindy at the peak of her popularity in
nineteen ninety nine, her bikini photos are downloaded seventy thousand
times a day. Contemporary articles about Cindy Margolis and Danny
Ash scoff at the very idea of an Internet celebrity.

(59:04):
They suggest that online fame will always be considered lesser
than other kinds, but d list is still a list.
The first Internet adult superstars don't care about mingling with
TV and movie stars as media industry peers. They just
care about making money online. There's another term for internet fame, democratic.

(59:29):
The idea that anyone with a dream and a web
address can now make themselves an autonomous brand is seductive.
Danny Ash and Cindy Margolis both strike it rich in
part because they get there so early to stake their claims.
Making content for a personal website is certainly work, but
for Danny and Cindy, it's a better quality of employment

(59:51):
than hoofing it in a bikini at woodworking shows or
getting sent into strip club police busts.

Speaker 1 (59:58):
For years, I just ran my fan club part time
out of the house, and I made fifteen hundred dollars
a month. I went on the web and it went
immediately to ten thousand dollars to fifteen thousand dollars.

Speaker 6 (01:00:12):
Danny adds a paid membership called the hot Box for
nine dollars and ninety five cents a month, with access
to premium photos and interviews with nude models. By the
late nineties, Danny dot com has seventeen thousand members and
net's nearly two million dollars a year. She gets emails
from satisfied customers around the world.

Speaker 1 (01:00:35):
I think a lot of these guys have never even
bought an adult magazine.

Speaker 6 (01:00:41):
When General World returns, celebrity sex tapes change the market.
Oh yeah, welcome back to General World.

Speaker 5 (01:01:03):
I don't think anyone else has really tried to create
that brand name recognition on the net. We want to
be the next generation of Playboy, Penthouse or Pustler.

Speaker 6 (01:01:15):
Seth Warshowski continues to build out new segments of IIG
and the venture has a new focus. Famous People Naked.
Pamela Anderson and Tommy Lee sue IIG overposting the stolen
our long tape of their Lake Mead houseboat Honeymoon on
Club Love in nineteen ninety seven. Bootlegs of the Perloin

(01:01:37):
sex tape were already being sold online and around LA
by a porn company called Arrow Productions. When Pam and
Tommy heard that Penthouse magazine now also had a copy
of the tape they were planning to sell. Pam and
Tommy lost their nineteen ninety six lawsuit against Penthouse when
the media company's lawyer successfully convinced the court that the

(01:01:57):
couple had forfeited any rights to privacy by becoming celebrities.
By the time Pam and Tommy sued IIG for running
a five hour stream of the sex tape on Club Love,
the whole thing was stressing out Pam, who was pregnant,
and the Lees just wanted to stop thinking about it.
It was long rumored that the Lees cut a backroom

(01:02:17):
deal with IIG and got a share of their seventy
seven million in profits, but Pam said that isn't true
in her Netflix documentary Pamela A Love Story. Allegedly, the
couple just signed away the rights to Warshovski because they
believed that this meant the sex tape would just continue
to stream online, but Sethwarshovski then sold the tape to

(01:02:38):
Vivid Entertainment, who made hard copies of the sex tape
and started selling them in adult stores in nineteen ninety eight.
Ethical not at all legal technically so far.

Speaker 5 (01:02:52):
We're just as much journalists as Fox files or hard
copy or sixty minutes.

Speaker 4 (01:02:58):
It's a different kind of content.

Speaker 5 (01:03:00):
The only reason sixty minutes or forty eight hours doesn't
show that Pam and Tommy tape is because they.

Speaker 4 (01:03:04):
Can't show nudity.

Speaker 5 (01:03:06):
And the hypocrisy that comes into play when they say
you're profiting off these people's mistakes is absurd.

Speaker 6 (01:03:14):
IIG also posts naked photos of conservative talk show shrink
doctor Laura Schlessinger. The Doctor Laura photos are sold to
IIG by an older male mentor she'd had an affair
with in the seventies when she was in her twenties.
Doctor Laura sues IIG, and the court rules that she
doesn't own the rights to the photos. She's a racist

(01:03:36):
and a homophobe, but that's still very fucked up. Bret
Michaels of Poison successfully blocks IIG from posting a nineteen
ninety three sex tape of him and Pamela Anderson and
sues them for ninety million dollars in damages. Neither Michaels
nor Anderson are interested in selling the tape, which keeps
leaking online, or in using the publicity from the sex

(01:03:59):
tape to promote the careers. There's something they value more
than money, their privacy. Personal celebrity home video sex tapes
getting sold and distributed online is still such a new
field in the nineties that there's a big legal gray
area around them. In nineteen ninety eight, Kelsey Grammar anonymously

(01:04:19):
sues Sethwarshovski over IEG's possession of a suspected Kelsey Grammar
sex tape. Warshovsky counter sues, and IEG posts a re
enactment video of Fraser Crane's sex tape. Other actors get
asked by the press how they feel about this new
frontier of fame.

Speaker 27 (01:04:40):
The Internet opens up so many issues. The ethics of
the whole thing haven't really been ironed out. I don't
know if they can ever be.

Speaker 4 (01:04:51):
Jeff Bridges Actor.

Speaker 27 (01:04:55):
If I start complaining, I'm calling more attention to it.
I can ran take rave. All will call more attention
to it. Sometimes silence is the only path to resistance,
Tim Robbins Actor.

Speaker 6 (01:05:12):
In nineteen ninety nine, Internet Entertainment Group posts nude photos
online of a Brazilian model named Luciana Jimenez, whose pregnancy
by Mick Jagger breaks up jaggers decades long partnership with
Texans supermodel Jerry Hall. IIG also posts some ill gotten
pictures of Jagger's bandmate Keith Richards, masturbating that they bill

(01:05:33):
as Keith getting some self satisfaction. IIG purposely courts controversy
and constantly makes new enemies. They buy a site from
a Saint Louis web development company called Gemini that uses
an address designed for users looking for info on the
Pope's forthcoming visit to the United States in nineteen ninety

(01:05:54):
nine www dot papal Visit ninety nine dot com. When
the Paple visit site runs ads for bars. The archdiocese complains.
Gemini then sells it to IEG, who turn paplevisit ninety
nine dot com into a porn site with a section
called Unholy Sex. The Archbishop of Saint Louis gets a

(01:06:16):
successful injunction against paplevisit ninety nine dot com thatth Wwarshovsky
defends the website, saying the Catholic Church has extreme positions
on sexuality and that IG are respectable journalists covering the
Papal Visit responsibly. People who click on any of iig's
websites are served a million pop up ads that make

(01:06:39):
it harder to exit the site on their web browser
and try to lure.

Speaker 7 (01:06:42):
Them back in.

Speaker 6 (01:06:43):
The users who click into iig's websites create a profile
of their data, whether they end up signing up or not,
and that data can be sold off. Warshovsky is looking
at a greeting card company that uses this tactic.

Speaker 4 (01:07:00):
Money two ways.

Speaker 5 (01:07:01):
They're making money by advertising, and they're making money by
building a list, so there will be an email list
of all the people they send greeting cards to and
all the people they come from.

Speaker 6 (01:07:13):
Most new enterprises on the web that appear to be free,
but involve an email signup make money off selling the
list of emails to third parties. In time, this type
of data will become the most valuable currency online. Collecting
personal user data and selling that data to other companies
is more lucrative than relying on getting actual paid subscriptions

(01:07:36):
to websites.

Speaker 5 (01:07:38):
I passionately subscribe to what the First Amendment stands for.

Speaker 6 (01:07:45):
While Seth Worshowski isn't interested in free speech so much
as free money, he ends up in the very same
courts his First Amendment testing predecessor, Larry Flynn of Hustler
magazine once did. He even hires Alan Isaacman, the lat
Ernie Flint hired for his cases, who was played by
Edward Norton and Miloschformann's movie The People Versus Larry Flint.

Speaker 3 (01:08:09):
There are built in problems. One is that everyone is
all over, although that's not insurmountable. The other is that
in pornography there is an unspoken feeling of well, of
course they're lying when they say they didn't order the service.
It's like telemarketing. It's hard to organize the victims. These
are hard cases to make assistant US attorney Bartlett.

Speaker 6 (01:08:36):
As the new millennium approaches, twenty six year old Sethwarshovski
is featured in Time magazine's nineteen ninety nine issue Technology's
fifty Most Important Faces, presented as a tech wonder kind,
the boy king of Internet sex. He's also in trouble
with the irs, big trouble.

Speaker 5 (01:08:57):
That is absolutely, in factual, completely untrue whatsoever.

Speaker 6 (01:09:05):
Alongside reports in magazines like Time that IG is generating
fifty million dollars a year in revenue, there is mounting
evidence that IG's camgirl sites are illegally overcharging credit cards
using the old phone sex scams. Seth denies everything. He
claims any customers who report false charges are fairly reimbursed.

(01:09:28):
He wants these claims that IIG is cooking the books
to disappear because what he really wants is to take
IIG public as a company.

Speaker 5 (01:09:39):
We'll look at a different financing strategies. It depends on
our options. Seth demanded that i cause the billing system
to generate between four hundred thousand to two million dollars
in various occasions. This is in addition to the normal
daily revenue generation. At first, Seth told me that we
would credit the people we were double billing to generate revenues.

(01:10:01):
We were charging credit cards that had already been charged
for the same purchase. Then later he told me not
to credit anyone unless they called to complain. Ron Chow,
IIG chief technical officer.

Speaker 6 (01:10:17):
Ron Chow says Warshovsky got furious and called him a
racist slur when he refused to keep double and triple
billing customers to meet falsified profit margins. Chow left the
company when he realized Worshovsky's promises to reimburse customers were
allegedly false.

Speaker 4 (01:10:34):
I didn't want to participate in what Seth wanted me
to do.

Speaker 6 (01:10:39):
Warshovsky claims he never said the slur, but admitted he
can be quote difficult at times. Seth Warshovsky has also
just settled a lawsuit with three of his employees for
supposedly doing to him what he supposedly did to Ian Eisenberg,
first jacking IEG's business model and technology while absconding with

(01:11:00):
his client list of email addresses for their own use.

Speaker 5 (01:11:04):
I'm pretty aggressive, high energy. I'm a difficult guy to
work for.

Speaker 6 (01:11:11):
Seth Wwarshowski says any upcharging was a result of a
computer glitch that only affected customers at one IIG site,
Voyur Dorm, which bills itself as a real life adult
version of The Truman Show, with forty seven cameras, seven women,
one house. He claims that Voyer Dorm customers were the

(01:11:32):
only ones affected by the glitch, which build their cards
five times a day for a fifty day period, and
that all of the affected customers had been reimbursed now.
Sabrina Litton, who worked customer service for IIG, said in
an affidavit that she was instructed to not return hundreds
of calls from angry overbuild customers. She also did not

(01:11:53):
return a call from The Washington Post about the affidavit.
Another former customer service technician, Matthew Fisher, said in the
affidavit that IEG employees were told to use the computer
glitch excuse to complaining customers. Employees say the company is
not even solvent. Their paychecks keep bouncing. Many of iig's

(01:12:14):
vendors are suing IIG.

Speaker 28 (01:12:18):
Seth would say, fuck up, go find another vendor. There
is always another vendor, and in many cases he's right.
Many times there is another vendor. But it became a
problem over time because we're to have gotten around about this.
We were being blacklisted like by recruiting agencies. Bert Wrightsma,
former chief operating officer, IEG.

Speaker 5 (01:12:42):
Our books aren't one hundred percent in order. It's not perfect.

Speaker 4 (01:12:46):
We need to get it together.

Speaker 6 (01:12:50):
While Time and The Wall Street Journal have been unquestioningly
printing Warshovski's claims that IEG is making fifty million dollars
in revenue a year, Burt wrights must says that's a
total fabrication. It's more like ten million, and only from
the upcharging scam Sethwarshovsky responds that there's more revenue streams
not under Reiitzma's command. He also claims they're not just

(01:13:14):
making money off sex sites, comparing IIG to the Discovery Channel.
In addition to live online psychics, IIG also runs a
home loan qualification site called zero Down and a site
called Online Surgery that Warshovsky says is the most popular
of IEG's non sex sites. Online Surgery webcasts live from

(01:13:35):
a plastic surgeon's office, showing procedures like breast augmentation, liposection,
and facelifts in live gory detail on laggy, grainy video.
IIG gets another wave of bad publicity for a site
called Our First Time, where two teenage virgins are supposed
to have sex for the first time on a webcam

(01:13:57):
broadcast right when they turn eighteen. The problem is that
the virgins are actually hired actors and the whole Our
First Time dot com site is a fake. The scandal
climaxes with the two virgins pulling out of the endeavor
and the Our First Time site redirecting to fundraising for
an independent film. Our First Time was the brainchild of

(01:14:20):
a director named Ken Tipton, a scripted prank to get
attention and help him solicit funding for a film he
wants to make. Warshowsky is furious he's been duped. After
Ken Tipton outs himself as the creator of Our First
Time and the whole thing is a fake, he writes
an editorial for indie film Rag Film Threat asking for

(01:14:41):
money to make his passion project.

Speaker 14 (01:14:46):
Based on the true story of how I lost my family,
a multimillion dollar chain of video stores, and almost my
life fighting a group of religious fanatics and a corrupt
city prosecutor over Martin Scorsese's controversial film The Last Temptation
of Christ. Ken Tipton, director.

Speaker 6 (01:15:07):
Incredibly enough, Ken Tipton did get to make his independent
movie off the notoriety of his our first time publicity gambit.
His passion project movie is called Heart of the Beholder.
It came out in two thousand and five, and it's
about a video store guy fighting a First Amendment battle
over his right to rent out copies of Martin Scorsese's

(01:15:28):
The Last Temptation of Christ to customers in Saint Louis
against the objections of local Christian fundamentalists.

Speaker 5 (01:15:37):
We're a very aggressive company, but we don't want to
provide illegitimate content.

Speaker 6 (01:15:44):
Even Sethwarshowski has some boundaries about what he's willing to sell.
No beast reality, no snuff films. He shit talks sixty
Minutes for airing a video of doctor Kavorkian assisting in
a death. Deth says IIG turned it down on an
ethical basis and call sixty Minutes disgusting for airing it.

(01:16:06):
Hyperpor Insights like IIG are allegedly only getting two paying
customers out of every one thousand Curiosity clicks. They don't
retain the customers they do get. They're continually bleeding out
customers who sign up out of curiosity and quit after.

Speaker 7 (01:16:22):
A few months.

Speaker 6 (01:16:24):
But once customers have given IIG their credit card info,
they have a hard time getting it back, even with
promotional tactics like offering the ill gotten Pam and Tommy
sex tape for free with every signup. IIG is not
the Seattle Silicon Valley success story. Sethwarshowsky has been making
it out to be.

Speaker 5 (01:16:45):
I'm human, I'm a sensitive guy.

Speaker 6 (01:16:49):
IIG is a proxy for all tech companies that come
after it, getting a bunch of venture capital investment and
jacking up their valuation for a few years to go
public and sell before everyone notices they've been cooking the
books with speculative value. It's Enron's all the way down.

Speaker 5 (01:17:08):
We would never do anything that wasn't one hundred percent
above board. We may slow pay someone if we're having
a cash crunch, but double billing people deliberately, never ever.

Speaker 4 (01:17:21):
We wouldn't jeopardize our business.

Speaker 6 (01:17:24):
By two thousand, there's a full probe of IEG from
the IRS and the FBI. Sethwarshovski is being investigated for
wire fraud and money laundering via foreign bank accounts. A
federal grand jury in Seattle subpoenas the sealed file for
a nineteen ninety eight case where a former girlfriend of
Worshovskis sued him for alleged domestic violence. He allegedly tried

(01:17:48):
to choke her and insinuated he could have her and
her daughter killed. They settled out of court and she
took out her restraining order against him. He tries to
sue the Seattle Weekly for covering the store.

Speaker 5 (01:18:02):
She thought that maybe she could get some money out
of me if you call the Seattle court.

Speaker 4 (01:18:07):
Case dropped.

Speaker 6 (01:18:11):
Warshovsky claims the criminal case in Las Vegas that he
copped for battery constituting domestic violence over trying to choke
out his ex girlfriend in Las Vegas has also been dismissed.
The Clark County, Nevada District Attorney says Warshovsky was charged,
but his lawyer negotiated a plea deal with the district
attorney a five hundred dollars donation to be split between

(01:18:32):
a domestic violence shelter and a law enforcement tip line.
The DA says Seth Wwarshovsky is required to attend Impulse
Control counseling and quote stay out of trouble.

Speaker 1 (01:18:47):
Seth is the most litigious person I know, and he
has a way of twisting things to his perspective. It's
a real uphill battle to try and bring some acceptance
and respect to my industry, and he makes it all
that much more difficult. I would not do business with
him again for a lot of reasons. That's about as
far as I can go.

Speaker 5 (01:19:09):
People are confused and maybe a little bit jealous about
how successful we've been.

Speaker 6 (01:19:15):
In two thousand, the hearings for the Child Online Protection Act,
or COPA are held in California courts. COPA aims to
restrict material harmful to minors online. They consider the material
harmful to miners as anything that can be interpreted as
sexual content, including all images of bare breasts. The guidelines

(01:19:38):
are vague, saying any site that quote contemporary community standards
would agree involves quote prurient interests must be restricted so
miners can't access them. Some porn sites add a click
through screen that asks the computer user to confirm they
are eighteen before entering the site, but no secondary proof

(01:19:59):
of identity or AG which is required. Danny Ash testifies
and explains the adult web at the third COPA hearing
in San Jose.

Speaker 1 (01:20:09):
There are millions of people online and each and every
one of us has a slightly different definition of pornography,
a different sense of morality, and different ideas about what
may be harmful to children. The diversity of our opinions
makes the task of identifying what's to be considered adult
difficult and compelling those who have been labeled to comply

(01:20:31):
nearly impossible. As we all know, every attempt thus far
to label and regulate adult material online has met with
vigorous litigation and ended up stalled in the courts.

Speaker 6 (01:20:46):
Danny Ash suggests some potential ways to regulate adult content
on computers without overt censorship. She also suggests ways adult
creators could be protected against content theft and password sharing.
Her big idea is a new domain, dot kids that
will house all children's content. Honestly, that is still a

(01:21:07):
really good idea dot Kids.

Speaker 13 (01:21:11):
I am often asked to comment on Internet dangers. My
answer may surprise you. The biggest danger on the Internet
today is not pedophiles. It is misinformation and disinformation. I
think it is of critical importance to teach kids how
to evaluate information in whatever form it appears. Gene are

(01:21:31):
more poly net Mom.

Speaker 6 (01:21:35):
Other testimonies come from webmasters behind kids websites, like yehooligans.
Everyone emphasizes that there's really no way to control what
your kids do online, but that it's for parents and
not the government, to figure it out. They also emphasize
the idea of media literacy. Rather than restricting the flow

(01:21:56):
of images and ideas, kids whose minds are being shaped
online must learn how to judge those images and ideas critically.

Speaker 7 (01:22:05):
Whoops, it's not just.

Speaker 6 (01:22:07):
The wide availability of sexual images that people worry about.
It's that the Internet provides plentiful opportunities for anonymous communication
between children and adult creeps.

Speaker 23 (01:22:20):
The Internet provides a form of anonymity that provides opportunity
for people to say and do things they probably would
not face to face. It also provides an almost endless
supply of those types of opportunities. For adults, these high
risk areas are more a matter of personal choice, but
for children, the danger is real. Dan Jude Security Software Commissions.

Speaker 6 (01:22:45):
Even with software that monitors content, there's no fail safe
way to stop kids from talking to strangers online, especially
once they think are other kids that are really adults
with malicious intent to groom them sexually. Some net nannies
allow the parents to monitor children's online interactions, but critics
think such tools are a violation of a child's personal privacy.

Speaker 9 (01:23:09):
The problem and great concern of law enforcement is that
before the Internet, law enforcement was able to protect children
and the community in the parks, libraries, shopping malls and streets. Now,
with the Internet, we have no law enforcement on the
super Highway. Detective Derek Roland, Huntington Beach Police Department.

Speaker 1 (01:23:34):
I'm out of the modeling business for good. The site
is all I do now.

Speaker 4 (01:23:40):
It may replace starting magazines or peep shows. That's about it.
I mean, you can't fall in love with a computer.
I don't think.

Speaker 6 (01:23:51):
But while the Child Online Protection Act passes in nineteen
ninety eight, it is never enforced. It gets stuck in
follow up rounds of litigation for ten years and eventually
receives a permanent injunction, rendering it unconstitutional. So sexual content
continues to proliferate freely online and with it new ways

(01:24:12):
for creators like Danny ash and con men like Sethwarshowsky
to monetize it. While Jenna Jamison has been watching the
sex business changing from the sidelines, she will jump in
soon and make a big splash with her own personalized

(01:24:34):
internet brand. Club Jenna. Will Jenna survive the technological jump
into a big new pool of customers or will she
land with a splat on the hot concrete. Find out
next time on Jena World. Next time on Jenna World

(01:25:04):
Episode eight, Club Jenna, Jenna falls in lust with Tommy
Lee and then falls in love again with porn impresario
Jay Gerdina. Together, Jay and Jenna will launch her biggest
venture yet, a new internet adult entertainment company called Club Jenna.

(01:25:25):
Jenna World is an iHeartRadio production executive produced by Anna
Hosnier and Becco Ramos supervising, produced by Bei Wang, produced
by Victor Wright, script editing by Jonathan Mills, engineered by
Graham Gibson, and edited by Rory Gagan. Today's episode of

(01:25:46):
Jenna World featured Lauren ser Video as Jenna Jamison, Jamie
Loftus as Danny ash Bridger, Winneger as David James, Paul
Dautchny as Bob Guccioni, Andrew Tiya Sethwarshowski and Ron check Wow,
Josh Fadom as Jerry Springer, Mike Carlson as Wayne Allen,
Noah Garfinkel as Stephen Hirsch, Sara Sobsey as Anonymous Vivid Girl,

(01:26:11):
Blake Wexler as Ray Solar, Grace Spellman is Wendy Simpson,
Alison Stephenson as Alison Grippo, Elaine Con as Barbara Bailey,
Matthew Golden as Tim Elliott, Lindsay Normington as Stephanie Martin,
Mike Perry as Jason King, Rob Patrick as Mark h bell,

(01:26:31):
Anita Flores as Eileen Kent, and Jean Armer, Polly Derek
as Derek Newman, Gabe Bernini as Steve Becker, and Dan Jude,
Leah Rose as Laura the Cam Girl, Chris Wade as Rod,
Colin rex Will as Jeffrey rayport A, Mere Chowkree as
Joseph Cowatty, Elaine Carrey as Madeleine Altman, Will Mendiker as

(01:26:56):
Christopher Pettis, Sarah Johnson is Cindy Margolis, Grant Creator as
Jeff Bridges and Tim Robbins, Alex Papadimus as Assistant US Attorney,
Bartlett mort Burke as Bert Ritzma Leo Rose as Laura
the Cam Girl, y'ah See Slick as Ginger Lynn Allen,

(01:27:18):
Alex Gouter as Ken Tipton, and Ben Bolan as Detective
Derek Roland,