June 21, 2022 • 39 mins
How is it 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.
In this episode: 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.
If you’d like to keep up with the most recent news from this and other Pushkin podcasts be sure to sign up for our email list at Pushkin.fm.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:15):
Pushkin. Right before we start, we're two Financial Times journalists
trying to work out who rules the porn industry. So
this show has adult themes. I want to take you
(00:37):
to a suburban 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 in a corner,
a little company for interactive computer services. I know it
(00:57):
sounds ridiculous, but if the Internet has roots, they stretch
to here, to this modest shopping center in Youngstown, Ohio,
to that corner business. Every social media website you visit today, Facebook, Twitter, TikTok,
these platforms are able to operate in part thanks to them.
(01:20):
A family run IT business, A family run IT business
with what was possibly the biggest stash of digital pawn
in America. Today's power dynamics 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
(01:42):
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 how lies here and the
choices of an Ohio family back in the nineties. This family,
the Hardenbergs, define what it means to moderate content and
(02:05):
cyberspace and what happens when you go to far. My
name is Russell Francis Hardenberg, the fourth and I'm a
sales manager at a car dealership. 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.
(02:28):
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 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
(02:49):
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 the difference Russ and his family made.
(03:09):
Their mistakes helped lay the 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 and stay off the hook even
when illegal content is being shared on their sites. I'm
Patrician Wilson. I'm Alex Barker from Pushkin Industries and The
(03:33):
Financial Times. This is Hot Money, Act One, a Shared World.
(04:12):
Later in 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
(04:35):
of the 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
(04:58):
name in little computers only and 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.
(05:19):
Beard classes 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
the bulletin board. It was from nineteen ninety four, but
(05:39):
somehow it worked. You could dial up bulletin boards and
exchange messages with people and you know, find out some
technical information. Now he 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
(06:02):
they were for the private world, not just public institutions.
Anybody could use them. Dan's computer was in his bedroom
in Queens. The equipment wasn't cheap, and in Dan's case,
now 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
(06:24):
would then dial another computer in some far off places,
the bulletin 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
the clunky tech, it was all there and young Dan.
(06:46):
He was in his early twenties. Den he got more
and more obsessed. He was dialing 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
(07:10):
kinds of BBS 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
(07:32):
can't try now, or want it 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
(07:53):
BBS dedicated to 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, no kill abits, no megabits,
(08:15):
just bits. 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 this. When you click on it, and you'll hear
Procom dialing the modem. Then it'll ring and the modem
(08:35):
will answer. If you haven't heard what a modem sounds like,
it sounds a little bit like a fax 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,
(08:58):
and you pick what you want and it'll download. Now
the fun begins, ing 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
(09:22):
pay for it. At first, Dan charged ten dollars to subscribers.
Then I went to 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.
(09:43):
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
(10:04):
far and wide. And the law, well, as we'll tell
you in a bit, caught up. Yet in this legal
no man's land, Dan could become a pornographer of sorts,
all from his bedroom in Queens without ever having taken
a photo or set foot on a porn set. Even
in the age of bulletin boards, people were beginning to
(10:25):
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
Edie Hardenberg. Rusty and Edy was really big and they
had I don't even know how many phone lines they had,
(10:46):
and obviously invested a lot of money and their objective
clearly was to make their living off this completely Rusty
and edis 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 mall
(11:06):
next to a two pay stall. Rusty Needy were the
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. To
(11:27):
take a look at this advert I found for Rusty
and Needs from a magazine in the early nineties. Well,
so I'm looking at two owls they snuggled up wing
to wing. Some text here. It says we are the
friendliest bbs in the world. Our name says at all.
(11:49):
Ed and I are a couple of burnouts from the
nineteen sixties. We didn't like rules, Dan, 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 Ben and Jerry's
(12:10):
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 and exactly and you know
they would not have thought of themselves as pornographers, not
for a second, but almost by accident, they helped define
(12:34):
what paun would become in an online age. So did
you manage to speak to them? Rusty passed a few
years ago, and I would loved 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 she didn't want to
(12:57):
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 quite dead in the army. So my son and
(13:20):
I like to fly around, go have a burger and
a pot. 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 I networked
and made him talk to each other. He remembers his stepfather, Rusty,
(13:41):
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 manager and a lifelong libertarian.
(14:05):
He hated being told what to do, not just by government,
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 rolls are free for all, do whatever you
(14:25):
wanted 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, the hardenburg Son who I
(14:45):
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 then they came up with short
(15:08):
little 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. Edy told us that a few people got
(15:31):
married after meeting in their forums, but for others well.
Rusty and Edy amassed one of the world's 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 over the world, Britain, Saudi Arabia, Japan, and
(15:55):
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 was still like a sauna. We had working
(16:17):
even in a winner in shorts and a fu 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
carry ten times that data in your pocket. But back
(16:37):
then this was like Aladdin's Cave. It was getting attention.
Some commercial software makers got upset, as did some porn barrens,
and then there was the FBI Act too, the dangers
(16:58):
of moderation. So far, the Rusty and Needy 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
(17:20):
so dramatic that even three decades later, Edie 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 went at be home. We
were all at the reception and my stepbrother Sean had
to go back to the house to get something. I
(17:41):
was coming home with my girlfriend. 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,
(18:04):
every server, everything out of the house. They took all
our records, everything we had, they took it all. My
father was terrified. They weren't alleged they had legally 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.
(18:25):
The press was raising alarm about cyber porn. The FBI
wanted to set some boundaries. The government seize the business
just because they wanted to look around and see if
we were doing anything wrong. For two and a half years,
they took a man's business, all his hardware. You can
(18:46):
probably tell from Russ's voice the memories are still raw
for the family. It's the reason Edie wouldn't speak to us.
Just thinking back to that day gave her sleepless nights.
It was a little point in her life too. I
mean 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,
(19:08):
Russ Do you Need's bulletin Board got back online after
the FBI swooped. They had backups, they 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
(19:30):
straight from Hugh Hefner's mansion. The Playboy founder had realized
that his pictures were being shared online digital copies, and
he wasn't being paid, so the he 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,
(19:50):
Bob Campbell, and don't we love fake names on this podcast.
Her mission to hunt down copied Playboy picks. You gotta remember,
we had maybe one hundred to two hundred thousand images
on our servers, and I think they found five. Remember
which pictures they were? They said, Bo Derek. Playboy actually
(20:14):
presented around twenty images to the court, but it was
still a tiny fraction of the pictures available. I like
to think 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
(20:37):
him someday, so he made his son Russ, screen every
uploaded image. 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 bow Derek, they somehow slipped through. Rusty's case settled.
(21:01):
His insurance company covered the settlement amount, but this case
was remembered for something else. No would 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
(21:25):
ruled against Rusty 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 did to protect the
family business actually left them exposed. We didn't think that
(21:46):
we would lose because 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.
(22:08):
But we thought we had done our due diligence. But
evidently the courts start differently. The moderation was their downfall.
If Rusty hadn't checked a thing the people uploading Boat
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?
(22:30):
Most importantly, can the person 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 Hardenburg, the case
against rusty and edy. It's so strange to think that
(22:54):
the road rules of the Internet were partly laid down
in a hot basement in suburban Ohio, a hot basement
stacked full the 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 Dusey, but also online pornographers like Fabian
(23:18):
Tilman and Bernt berg Meyer. If it was not for
rusty and needy, Pornhub might be run very differently. You
can hear the same debate today. You might have heard
of big text favorite laws to Digital Millennium Copyright Act
and Section two thirty of the Communications Decency Act. Together
they effectively give immunity to platforms like Google or Facebook.
(23:40):
It is a tiny law that's had a huge impact
on the Internet, as we know at Section two thirty
of the Communications Decency Act. Lawmakers on both sides of
the I 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 of the law say that
(24:00):
it leaves social media free to ignore lies, hoaxes, and
slander that can wreck the lives of innocent people. In
the Playboy case against Rusty and Needy, it paved a
way for that protection on screening and moderation. It's set
the legal standard for online media. The big lesson don't
(24:23):
screen content rigorously. It leaves you on the 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 without a charge
(24:43):
being filed. And all those boderic 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 era didn't last for long. By
(25:08):
nine 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, A web of wonder. Meet
(25:37):
Madeline 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? I mean,
oh my god, I can sometimes I came like five
six times a day. I swearked to god, Alex was
(25:59):
so hot hot. 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 nineteen ninety five,
she was one of the first people to create, host
(26:21):
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 called cam sites
and they're a great money spinner for pawn. Live video
(26:42):
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. Nobody had
worked out what the Internet was for or how it
(27:04):
could be turned into serious money. In other words, nobody
ruled cyberspe 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
with a television series, Madeline's Variety TV Envy TV. We
(27:25):
have a hot show for you tonight. It's Breast Maintenance Day.
Does a bra a day help the Sago away? You
know what I mean? Should you? I read once when
I was young that you should wear a bra every days?
Is true? Or that's what the other day? What do
you think about this? Do you wear a brano? Not
every day? Inspired by anarchists, it aired in San Francisco
(27:46):
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, and it became super normalized right. The show
(28:08):
picked up a cult following and earned Madeline a 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 like a hyperactive, crazy, wild producer chick.
(28:29):
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 one 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 on her TV show. I do remember like
(28:51):
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 like scooping money out of just part everywhere.
Could make me so rich. And I'm so altruistic. I
(29:12):
get to save it 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 made our pandemic zoom calls possible. It was
(29:33):
a little milestone in tech, Madeleine's light bulb moment, although
they were admittedly just a few small issues with making
it a reality. There was no technology, there was no
streaming video. Nobody was charging anything online. But you got
to work, and soon a site called Babes for You
was born. Madeleine put what money she had into it,
(29:55):
and there wasn't much. She hired a cheap office above
a loud Mexican joint, playing the maccarren 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. You downloaded some software via an O eight
(30:17):
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, and so I went and
started performing myself, which, you know, it was a huge
(30:40):
thing for me because I'm like, what am I sex
industry worker? Now? Like I'm a super well educated, supposed
text 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 a desktop computer at all. Right,
it really did help a lot of strippers. Most of
(31:01):
my women were strippers. I think it really expanded the
sort of popularized view of what kind of women men wanted.
You know, on line, we found out about all kinds
of amazing fetishes. One of the fetishes involved oranges. Flying oranges.
Apparently it's a Dutch thing. That was really funny. We
did have one of these orange people do it, and
(31:22):
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. You know, we have more fun than the
(31:43):
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 worried
(32:04):
about giving some random number credit card to some people.
But you know, ultimately there 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
(32:26):
discovered her, 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 peign business,
and we were involved in 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 her second master's degree, is in
(32:50):
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 the internet. Manlin even worked
(33:11):
out how to charge them by the minute. By the way,
this payment system would prove hugely important to the porn 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 crazy things for sex, even to use the credit
(33:32):
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
the CD ROM drive the round hole. No, it's not
(33:55):
for holding your coffee cup. People would call like, why
isn'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
sex show online, but in reality, she just didn't have
the tech to do it. There was no concept of streaming,
(34:18):
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.
Think about your Zoom or FaceTime, but back then the
breakthrough was literally the digital version of an old animation book,
(34:41):
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
this live programming through the Internet. While Madeline might not
have been the very first, she definitely was one of
(35:04):
the first. It was so cutting edge that some people
were showing up with no trested in porn. 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.
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
(35:27):
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 imporn like Madeline's sites, plus a
few streamed sex shows from Amsterdam. Madeline, though, didn't stick around.
(35:49):
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 X insurance salesmen from Boston. They got into the
world of live video thinking it would be a way
to connect financial advices. The end are being the largest
(36:10):
purveyors of sex worldwide. Madeleine's site became part of a
business that launched Float for Free, one of the biggest
live camporn sites. Madeline was happy though she bought a
Bauhau's house with 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
(36:33):
the first generation of Internet entrepreneurs, the first to play
with the spell binding potential of the worldwide Web. Madeleine's
thing was live video, but we could have told you
stories of solo performers with amateur sites, swinger couples, credit
card swindlers. These were crazy days. One pornographer at the
(36:54):
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 ones who did it. A chick from NYU.
(37:15):
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 it became an inferno. The tube sides we
told you about they popped up. Porn became ubiquitous, streamed
(37:36):
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 an almighty reckoning over illegal content and pawn
(37:57):
Hub's world came crashing down. It was the moment pawn
Hub's enemies discovered the Achilles Heel of online pawn. That's
our next episode. So in my opinion, there is two
players on this planet then can kill porn online, and
they can literally kill it. And if they decidle they
(38:18):
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 Eelson and me Alex Barker.
(38:39):
Peter Sale is our lead producer and sound designer. Edith
Russolo is our associate producer. Our editor is Karen Shakurji.
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 thanks to Renee Kaplan
(39:03):
and Ruler Kalov for The Financial Times, and Mia Lobel,
Lital Molad, Justineang, Julia Barton and Jacob Weisberg at Pushkin Industries.
Thank you to a similar Web for providing our web
traffic data. If you like this show, consider subscribing to
Pushkin Plus, offering bonus content and ad free listening across
(39:24):
our network for four dollars ninety nine a month. Look
for the Pushkin Plus channel on Apple Podcasts or at
pushkin dot fm
Pushkin. Right before we start, we're two Financial Times journalists
trying to work out who rules the porn industry. So
this show has adult themes. I want to take you
(00:37):
to a suburban 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 in a corner,
a little company for interactive computer services. I know it
(00:57):
sounds ridiculous, but if the Internet has roots, they stretch
to here, to this modest shopping center in Youngstown, Ohio,
to that corner business. Every social media website you visit today, Facebook, Twitter, TikTok,
these platforms are able to operate in part thanks to them.
(01:20):
A family run IT business, A family run IT business
with what was possibly the biggest stash of digital pawn
in America. Today's power dynamics 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
(01:42):
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 how lies here and the
choices of an Ohio family back in the nineties. This family,
the Hardenbergs, define what it means to moderate content and
(02:05):
cyberspace and what happens when you go to far. My
name is Russell Francis Hardenberg, the fourth and I'm a
sales manager at a car dealership. 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.
(02:28):
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 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
(02:49):
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 the difference Russ and his family made.
(03:09):
Their mistakes helped lay the 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 and stay off the hook even
when illegal content is being shared on their sites. I'm
Patrician Wilson. I'm Alex Barker from Pushkin Industries and The
(03:33):
Financial Times. This is Hot Money, Act One, a Shared World.
(04:12):
Later in 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
(04:35):
of the 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
(04:58):
name in little computers only and 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.
(05:19):
Beard classes 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
the bulletin board. It was from nineteen ninety four, but
(05:39):
somehow it worked. You could dial up bulletin boards and
exchange messages with people and you know, find out some
technical information. Now he 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
(06:02):
they were for the private world, not just public institutions.
Anybody could use them. Dan's computer was in his bedroom
in Queens. The equipment wasn't cheap, and in Dan's case,
now 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
(06:24):
would then dial another computer in some far off places,
the bulletin 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
the clunky tech, it was all there and young Dan.
(06:46):
He was in his early twenties. Den he got more
and more obsessed. He was dialing 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
(07:10):
kinds of BBS 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
(07:32):
can't try now, or want it 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
(07:53):
BBS dedicated to 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, no kill abits, no megabits,
(08:15):
just bits. 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 this. When you click on it, and you'll hear
Procom dialing the modem. Then it'll ring and the modem
(08:35):
will answer. If you haven't heard what a modem sounds like,
it sounds a little bit like a fax 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,
(08:58):
and you pick what you want and it'll download. Now
the fun begins, ing 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
(09:22):
pay for it. At first, Dan charged ten dollars to subscribers.
Then I went to 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.
(09:43):
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
(10:04):
far and wide. And the law, well, as we'll tell
you in a bit, caught up. Yet in this legal
no man's land, Dan could become a pornographer of sorts,
all from his bedroom in Queens without ever having taken
a photo or set foot on a porn set. Even
in the age of bulletin boards, people were beginning to
(10:25):
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
Edie Hardenberg. Rusty and Edy was really big and they
had I don't even know how many phone lines they had,
(10:46):
and obviously invested a lot of money and their objective
clearly was to make their living off this completely Rusty
and edis 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 mall
(11:06):
next to a two pay stall. Rusty Needy were the
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. To
(11:27):
take a look at this advert I found for Rusty
and Needs from a magazine in the early nineties. Well,
so I'm looking at two owls they snuggled up wing
to wing. Some text here. It says we are the
friendliest bbs in the world. Our name says at all.
(11:49):
Ed and I are a couple of burnouts from the
nineteen sixties. We didn't like rules, Dan, 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 Ben and Jerry's
(12:10):
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 and exactly and you know
they would not have thought of themselves as pornographers, not
for a second, but almost by accident, they helped define
(12:34):
what paun would become in an online age. So did
you manage to speak to them? Rusty passed a few
years ago, and I would loved 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 she didn't want to
(12:57):
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 quite dead in the army. So my son and
(13:20):
I like to fly around, go have a burger and
a pot. 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 I networked
and made him talk to each other. He remembers his stepfather, Rusty,
(13:41):
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 manager and a lifelong libertarian.
(14:05):
He hated being told what to do, not just by government,
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 rolls are free for all, do whatever you
(14:25):
wanted 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, the hardenburg Son who I
(14:45):
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 then they came up with short
(15:08):
little 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. Edy told us that a few people got
(15:31):
married after meeting in their forums, but for others well.
Rusty and Edy amassed one of the world's 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 over the world, Britain, Saudi Arabia, Japan, and
(15:55):
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 was still like a sauna. We had working
(16:17):
even in a winner in shorts and a fu 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
carry ten times that data in your pocket. But back
(16:37):
then this was like Aladdin's Cave. It was getting attention.
Some commercial software makers got upset, as did some porn barrens,
and then there was the FBI Act too, the dangers
(16:58):
of moderation. So far, the Rusty and Needy 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
(17:20):
so dramatic that even three decades later, Edie 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 went at be home. We
were all at the reception and my stepbrother Sean had
to go back to the house to get something. I
(17:41):
was coming home with my girlfriend. 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,
(18:04):
every server, everything out of the house. They took all
our records, everything we had, they took it all. My
father was terrified. They weren't alleged they had legally 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.
(18:25):
The press was raising alarm about cyber porn. The FBI
wanted to set some boundaries. The government seize the business
just because they wanted to look around and see if
we were doing anything wrong. For two and a half years,
they took a man's business, all his hardware. You can
(18:46):
probably tell from Russ's voice the memories are still raw
for the family. It's the reason Edie wouldn't speak to us.
Just thinking back to that day gave her sleepless nights.
It was a little point in her life too. I
mean 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,
(19:08):
Russ Do you Need's bulletin Board got back online after
the FBI swooped. They had backups, they 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
(19:30):
straight from Hugh Hefner's mansion. The Playboy founder had realized
that his pictures were being shared online digital copies, and
he wasn't being paid, so the he 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,
(19:50):
Bob Campbell, and don't we love fake names on this podcast.
Her mission to hunt down copied Playboy picks. You gotta remember,
we had maybe one hundred to two hundred thousand images
on our servers, and I think they found five. Remember
which pictures they were? They said, Bo Derek. Playboy actually
(20:14):
presented around twenty images to the court, but it was
still a tiny fraction of the pictures available. I like
to think 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
(20:37):
him someday, so he made his son Russ, screen every
uploaded image. 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 bow Derek, they somehow slipped through. Rusty's case settled.
(21:01):
His insurance company covered the settlement amount, but this case
was remembered for something else. No would 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
(21:25):
ruled against Rusty 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 did to protect the
family business actually left them exposed. We didn't think that
(21:46):
we would lose because 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.
(22:08):
But we thought we had done our due diligence. But
evidently the courts start differently. The moderation was their downfall.
If Rusty hadn't checked a thing the people uploading Boat
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?
(22:30):
Most importantly, can the person 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 Hardenburg, the case
against rusty and edy. It's so strange to think that
(22:54):
the road rules of the Internet were partly laid down
in a hot basement in suburban Ohio, a hot basement
stacked full the 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 Dusey, but also online pornographers like Fabian
(23:18):
Tilman and Bernt berg Meyer. If it was not for
rusty and needy, Pornhub might be run very differently. You
can hear the same debate today. You might have heard
of big text favorite laws to Digital Millennium Copyright Act
and Section two thirty of the Communications Decency Act. Together
they effectively give immunity to platforms like Google or Facebook.
(23:40):
It is a tiny law that's had a huge impact
on the Internet, as we know at Section two thirty
of the Communications Decency Act. Lawmakers on both sides of
the I 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 of the law say that
(24:00):
it leaves social media free to ignore lies, hoaxes, and
slander that can wreck the lives of innocent people. In
the Playboy case against Rusty and Needy, it paved a
way for that protection on screening and moderation. It's set
the legal standard for online media. The big lesson don't
(24:23):
screen content rigorously. It leaves you on the 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 without a charge
(24:43):
being filed. And all those boderic 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 era didn't last for long. By
(25:08):
nine 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, A web of wonder. Meet
(25:37):
Madeline 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? I mean,
oh my god, I can sometimes I came like five
six times a day. I swearked to god, Alex was
(25:59):
so hot hot. 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 nineteen ninety five,
she was one of the first people to create, host
(26:21):
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 called cam sites
and they're a great money spinner for pawn. Live video
(26:42):
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. Nobody had
worked out what the Internet was for or how it
(27:04):
could be turned into serious money. In other words, nobody
ruled cyberspe 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
with a television series, Madeline's Variety TV Envy TV. We
(27:25):
have a hot show for you tonight. It's Breast Maintenance Day.
Does a bra a day help the Sago away? You
know what I mean? Should you? I read once when
I was young that you should wear a bra every days?
Is true? Or that's what the other day? What do
you think about this? Do you wear a brano? Not
every day? Inspired by anarchists, it aired in San Francisco
(27:46):
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, and it became super normalized right. The show
(28:08):
picked up a cult following and earned Madeline a 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 like a hyperactive, crazy, wild producer chick.
(28:29):
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 one 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 on her TV show. I do remember like
(28:51):
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 like scooping money out of just part everywhere.
Could make me so rich. And I'm so altruistic. I
(29:12):
get to save it 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 made our pandemic zoom calls possible. It was
(29:33):
a little milestone in tech, Madeleine's light bulb moment, although
they were admittedly just a few small issues with making
it a reality. There was no technology, there was no
streaming video. Nobody was charging anything online. But you got
to work, and soon a site called Babes for You
was born. Madeleine put what money she had into it,
(29:55):
and there wasn't much. She hired a cheap office above
a loud Mexican joint, playing the maccarren 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. You downloaded some software via an O eight
(30:17):
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, and so I went and
started performing myself, which, you know, it was a huge
(30:40):
thing for me because I'm like, what am I sex
industry worker? Now? Like I'm a super well educated, supposed
text 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 a desktop computer at all. Right,
it really did help a lot of strippers. Most of
(31:01):
my women were strippers. I think it really expanded the
sort of popularized view of what kind of women men wanted.
You know, on line, we found out about all kinds
of amazing fetishes. One of the fetishes involved oranges. Flying oranges.
Apparently it's a Dutch thing. That was really funny. We
did have one of these orange people do it, and
(31:22):
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. You know, we have more fun than the
(31:43):
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 worried
(32:04):
about giving some random number credit card to some people.
But you know, ultimately there 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
(32:26):
discovered her, 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 peign business,
and we were involved in 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 her second master's degree, is in
(32:50):
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 the internet. Manlin even worked
(33:11):
out how to charge them by the minute. By the way,
this payment system would prove hugely important to the porn 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 crazy things for sex, even to use the credit
(33:32):
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
the CD ROM drive the round hole. No, it's not
(33:55):
for holding your coffee cup. People would call like, why
isn'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
sex show online, but in reality, she just didn't have
the tech to do it. There was no concept of streaming,
(34:18):
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.
Think about your Zoom or FaceTime, but back then the
breakthrough was literally the digital version of an old animation book,
(34:41):
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
this live programming through the Internet. While Madeline might not
have been the very first, she definitely was one of
(35:04):
the first. It was so cutting edge that some people
were showing up with no trested in porn. 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.
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
(35:27):
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 imporn like Madeline's sites, plus a
few streamed sex shows from Amsterdam. Madeline, though, didn't stick around.
(35:49):
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 X insurance salesmen from Boston. They got into the
world of live video thinking it would be a way
to connect financial advices. The end are being the largest
(36:10):
purveyors of sex worldwide. Madeleine's site became part of a
business that launched Float for Free, one of the biggest
live camporn sites. Madeline was happy though she bought a
Bauhau's house with 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
(36:33):
the first generation of Internet entrepreneurs, the first to play
with the spell binding potential of the worldwide Web. Madeleine's
thing was live video, but we could have told you
stories of solo performers with amateur sites, swinger couples, credit
card swindlers. These were crazy days. One pornographer at the
(36:54):
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 ones who did it. A chick from NYU.
(37:15):
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 it became an inferno. The tube sides we
told you about they popped up. Porn became ubiquitous, streamed
(37:36):
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 an almighty reckoning over illegal content and pawn
(37:57):
Hub's world came crashing down. It was the moment pawn
Hub's enemies discovered the Achilles Heel of online pawn. That's
our next episode. So in my opinion, there is two
players on this planet then can kill porn online, and
they can literally kill it. And if they decidle they
(38:18):
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 Eelson and me Alex Barker.
(38:39):
Peter Sale is our lead producer and sound designer. Edith
Russolo is our associate producer. Our editor is Karen Shakurji.
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 thanks to Renee Kaplan
(39:03):
and Ruler Kalov for The Financial Times, and Mia Lobel,
Lital Molad, Justineang, Julia Barton and Jacob Weisberg at Pushkin Industries.
Thank you to a similar Web for providing our web
traffic data. If you like this show, consider subscribing to
Pushkin Plus, offering bonus content and ad free listening across
(39:24):
our network for four dollars ninety nine a month. Look
for the Pushkin Plus channel on Apple Podcasts or at
pushkin dot fm
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