Adult Site Broker Talk Episode 224 with Attorney Jeffrey Douglas

This is Bruce Friedman of Adult Site Broker and welcome to Adult Site Broker Talk where each week we interview one of the movers and shakers of the adult industry and we give you a tip on buying and selling websites. This week we’ll be speaking with free speech attorney Jeffrey Douglas in part two of our interview. We’ve doubled our affiliate payouts at ASB Cash. Now when you refer sellers or buyers to us, you’ll receive 20% of our broker commission on any and all sales that result from that referral for life. Check out ASB Cash dot com for more details and to sign up. And we’re proud to announce our latest project, thewaronporn.com. You’ll find articles from industry websites as well as mainstream publications. It’s designed to raise awareness of our industry’s plight in the war on porn and the numerous attacks on our industry. You’ll find all that and more at thewaronporn.com. Now time for our property of the week that’s for sale at Adult Site Broker. We’re proud to offer a premium cam site launched in 2010. It was designed and developed for models by models. Many of their current hosts have been with them for over a decade due to high traffic, high payouts, tons of earning options, a robust model interface and more. The site has safety features like the ability to block and report customers, geo blocking and geo hiding. The owner started an adult as a doorman at the Men’s Club of Charlotte. As an entrepreneur with little coding experience, he built their prototype site. Once the first dancer from the club made some money, more followed and the site took off. Their database has over 127,000 registered users and over 1,100 registered models. Potential buyers with access to models, dancers or creators can onboard their current talent and increase sales quickly. Site label owners can instantly double profits by switching to their own platform. Also investing in recruiting and hiring hosts or onboarding new talent pays off instantly. If a host is added today, it is reflected in revenue immediately. Only $926,000. Here’s part two of my interview with free speech attorney Jeffrey Douglas. We don’t hear much about 2257 anymore. You are instrumental in making 2257 regulations less restrictive and thank you for that. I don’t think you probably get enough thank yous for that. What should website owners know about 2257 today and how it relates to content valuation? That is the exact right focus. So, 2257 has never been enforced against the adult industry. The only 2257 cases that have been brought with two major exceptions have been of actual trial pornographers where they have a spouse. So here’s the typical 2057 case. A husband and wife install cameras so that they can observe their nieces and nephews undressed in the shower. So they’re creating trial pornography. So that carries 15 years mandatory minimum. So the husband agrees to plead to the 15 years or up mandatory minimum and they allow the wife to plead for a plea bargain and the plea bargain is 2257. So she does three months, six months, whatever the husband does bites the bullet and gets the 15 to 30 years and that’s what 2057 has been used. So what 2057 represents and the only even first step of enforcement was 20 years ago when under enormous pressure from Congress the FBI finally did something and they executed 30 inspections around the country. And despite the press releases from the companies that were being searched which said, you know, we did perfectly and that when the FBI agents were leaving they said there’s never been a better site than you know, business than yours. I was representing many of those companies and there were substantial violations. Not of the merits. It wasn’t there. There were actually people underage but they didn’t have the IDs. They didn’t have them in the right places in 2057. In reality is not about preventing minors. It’s to create a whole bunch of arbitrary rules to trap the unmarried. Of course. We knew just like age verification, they were just trying to make it harder for us to do business. That was the whole reason for it. And I’ll do another little side light. There’s never been a hearing in Congress in 2057. Not one. There’s never been a witness called. It was added into the law in a omnibus crime bill in 1980 something or other and they never held a hearing on it but in conference you can get anything into an omnibus bill. And in all of the amendments that have happened to it since it’s the exact same way. So 2057 is the misbegotten child of just a handful of writing legislators. They require the FBI to enforce it and the FBI doesn’t want to. So on the enforcement end with the exception of that brief period where everyone was scared of us but nothing came of it. That reads contempt. You know, if the law isn’t enforced, you stop paying attention to it. But there is a reason that it’s in the economic interest of every website to be extremely diligent on the 2057 records because someday you’re going to put your business up for sale. I know that’s what I do. And your audience certainly wouldn’t understand that. Right. If I’m selling a website and content, the first thing the sophisticated buyer does is says I want to see your 2057 records because if the 2057 records aren’t perfect, and I mean perfect, the price goes down because the leverage won’t. So I’ve been involved in both the sale of extremely large entities and also very large entities getting very large loans. And in both cases, I was hired to do a 20 to 57 survey by either the lenders or the buyer. And while I was chosen because of my absolute neutrality, what they were hoping was that I would report failures of the 20 to 57 record keeping system because the price would go down. Right. So that’s to find the legal fee. Exactly. So it was remarkable how vital the 20 to 57 records played in the sales. I’ve also been involved in small sales. You know, a company, this is a pre-internet company, had a pretty large library. The principal dies. The survivors don’t want to have anything to do with it. They want to sell it. And the selling entity says, yeah, we got our 20 to 57 records are perfect and all of that. And it turns out they were terrible. And so it wasn’t a matter of leverage. The reality was their library, half two thirds couldn’t be sold. It was worthless because no one would take the risk of putting. Yeah. So be very diligent because it adds value to your product. And of course, there’s the reality that there are stupid, greedy, short-sighted people out there who have cameras. I have known people who’ve been in the business 30 years who did photo shoots without getting the ID first. And then afterwards had a whole shit. So again, 20 to 57 records just allows you to sleep at it right night. And the better they’re kept, the better off you are. We won a legislative battle, which kind of got in 20 to 57 because he eliminated these administrative searches. So they can no longer just knock your door and saying, hi, I’m a friendly FBI agent. I want to see your 25 to 7 records. They either have to get a search warrant or a subpoena, which requires a much more cards than actual problem. God, you have to have a reason to think that there’s 20 to 57 violation, not just being business. So the courts so ruled, the government did not appeal to the Supreme Court. So that is the law of the land. The regulations, half of the regulations pertain to administrative searches. So they’re all no longer constitutional, including the requirement to put your address out. Because if they can’t do an administrative search, why are you required to disclose your address? Now, we’re fighting to get those regs rewritten to conform with the Court of Appeal. And in our proposal, we rewrote 20 to 57 to make it a friend of the industry. Nothing in the current regulations has anything to do with the privacy of the performers. And 20 to 57 records is an identity theft in a can, right? So in the proposed regulations, we have, there’s a lot of emphasis on what record keepers pass on and disclose. So if you’re the person that did the original recording and got the original copies of the passport and whatever, and their birth date, their legal name and every name they’ve ever used their entire life, all that kind of stuff. If you sell the product and you transfer the 20 to 57 records, you remove the person like and find information. So you only give the birth year or birth date. Sometimes you have to give the full birth date, but you only use the last four digits of the passport and you delete the name. So there are dozens and dozens of elements of that. So if we’re able to persuade the Justice Department, it’s not, it’s realistic that there will be changes, not that we’re going to get everything we want, but we’ll convert 20 to 57 from being a series of mindless landmines, pointless ways to find a new way to go to prison, failing to alphabetize property as a felony under 20 to 57. We’ve eliminated all of that bullshit and instead put in a core that deters minors from getting in by benefits the industry and a variety of different ways. For instance, and this is a super important one for all of your listeners, right now, credit card companies can demand 20 to 57 records. I was just going to say that as I got to client right now mentioning that. Yeah. And so a bunch of entities that have no legal right to get them under the law are demanding them and under the new regulations, that would be impossible because the entity that they would ask would say it’s against the law for me to turn it over to you. As it absolutely should be. So at Xbiz LA in January, which was an outstanding show, by the way, FSC had a wonderful day of seminars and much of it dealt with banking discrimination and the FSC’s lobbying efforts in DC. I’m sure pretty much everyone listening to this has experienced banking discrimination at some point or another. I know I certainly have. How are industries lobbying efforts going against this type of discrimination? A number of fortunate things all came into place at the same time. In the past, Washington DC lobbying has been beyond our financial capacity and our resources. We had a fantastic lobbyist who was just very sympathetic to us, who helped us out. But we never had a sort of full force, full court press lobbying just didn’t have the resources. When Wells Fargo started Purge in two years ago and it got onto social media, a lobbyist for a financial lobbying firm that represents the cannabis industry and everybody else, they reached out to us and said, we want to represent you pro bono. So we got incredible lobbying for a free for a year and we were able to show the value of it. So we were able to raise the money to be able to hire them at a very discounted price because they love us. Somebody loves us. Yeah. So we keep hearing that we are their favorite client. And the lobbyist who reached out to us, who’s not one of the partners, he’s just one of the, the actual, you know, not bad door lobbyists for the last two years, he was elected lobbyist of the year by his peers. Wow. I met him at the show. He’s fantastic. He really is. And when you walk on the streets of the Capitol next to him, it’s like walking through a fan show arm in arm with a porn star. You can’t you can’t go five feet without somebody walking up and hugging them, you know, everywhere you go, if our lobbyist, someone runs out and says, Oh, and throws their arms around them. He likes somebody like that. As long as they aren’t politicians. Well, I guess politicians, we want them to like them, right? Yeah. So, um, our message is outstanding. It’s very well tailored. Our lobbyists are outstanding. And by this other delightful coincidence, conservatives are concerned about banking discrimination because gun stores, extraction industries, you know, coal oil, whatever are being boycotted by some banking groups. Now, the reality is if, um, and I’m picking this bank out of the blue blue sky, if, you know, um, what it’s called United California bank or some California bank says we’re no longer going to loan money to an oil industry. It’s not like that actually inhibits the oil industry from getting loans. There are plenty of other entities, right? But it pisses off the right. So they have been drafting laws that say you can’t discriminate, uh, you can’t engage in banking discrimination when the activity is lawful, when we come to them and say, yeah, you’re right. Look what’s happening to us. And one of the, you know, we carefully pick the people that we bring to talk and we find the best stories. So we Brian, a woman who’s second career adult, she’s lost 22 forms of accounts, you know, Venmo, all of the new financial services and then every bank you can think of. So despite the fact that she had a great credit rating and many times the income of her then husband, she wanted to have a house built on land that she owned, but she couldn’t get the loan. So her husband got the loan at much higher interest rates because his graduating was crap or at least not anywhere as good as hers. And when they got divorced, he claimed the house. So if you’re trying to deter the sense of pending, the best possible way to encourage pimping is to deny access to banking. If I’m dependent on someone else for banking, I’m dependent on them for life. Yeah, absolutely. Everything, right? So this is a very compelling story. And even though they don’t like the fact that her second career choice is being a fetish module on the internet, it’s a pretty compelling story. So there’s this tricky balance of trying to find a middle ground between satisfying the conservatives and satisfying the liberals who do want a bank to be able to make a political choice. But everybody seems to agree that if you deny an individual a bank account, it can’t be on a reputational risk alone. It has to be because they actually done something wrong. And so we’re inching our way towards consensus. And when it happens, we won’t be at the center of it. It’s going to be when Maxine Waters, liberal Democrat from Los Angeles and J.B. Vance, once and forever senator and not any other job, Ohio can find a way to cross that bridge. I wish I believed that on the day that Trump nominated him for vice president. Yeah, it’s a court show. Anyway, so we’re seeing real progress and the thing that is most notable to everyone, including our lobbyists, is how well we are received in every office. And we have been in the offices of extreme conservatives who have made hostility towards commercialized sex, a centerpiece. And when we go into their office, we’re not talking to them. We’re talking to their aid, but we’re talking to their most senior aid and they’re listening to us and they’re engaging in dialogue with us. It’s really quite inspiring about how the political process can work, even when Congress itself is so profoundly dysfunctional. Oh, God, you said a mouthful. You chair the FSC’s board of directors. Please talk about the importance of the organization, where it’s been and where you see it going. Okay, great. And we’ll do a little crossover from banking discrimination to that. One of the ways that we are addressing the center and the heart of banking discrimination is we, it is our goal to create our own credit union. Now, to get a chartered bank is impossible. I mean, it’s not just hard. It’s just forget about it. But credit unions different and there have been, there was a shift in the rules three years ago, two years ago, that makes it much faster and easier to create credit union. It’s very difficult. But if you go to the service, if you go to free speech coalition.com, there is a survey about what your financial services needs are and which we are using in order to begin the process of getting our chartered for credit unions. There are a number of obstacles. A lot of money has to be raised. That’s not investment. It’s an actual gift in order to pay for the staff to build up the credit unions, have it ready to roll. But the benefits that will flow to the industry, if credit union comes, are just profound. You know, our industry now is composed of hundreds of thousands of individual creator producers who are going on to fan sites, campsites. Although those people, most of them had no contact with the adult industry. They are now part of it. And we’re their advocates. So you know, if you have, if you’re a teacher and you’re supplementing your shitty income by only fans and you lose everything, all banking because of that, that’s a catastrophe. You know that in those kinds of people will know that they can go to their industry’s credit union and be treated as an honor to this. And that is a, an example of what the Free Speech Coalition exists for. It’s not unique, extremely unusual in that our advocacy is not for management or for labor. It’s for the entire industry. Absolutely. And so the National Rifle Association exists for gun manufacturers and gun sellers. In fact, does not care about the, you know, individual gun user. So this is, like I said, if not unique, very, very unusual. And there’s a sort of purity to what it is we do because of that. There have been many predecessors. The organization was formed in ’91. I joined the board in ’94, ’95. But before that, there was the Adult Video Association, the Adult Motion Picture Association, and on and on and on. All of them formed in a crisis. And as soon as the crisis was resolved, the interest in maintaining the organization died. And so there was about a three-year half-life for these organizations. And that was what the Free Speech Coalition was destined to be as well. It was formed because of Operation Woodworm, which was a federal assault on manufacturers of videos. It would have put the industry out of business. And the Free Speech Coalition was formed to basically be an alternative voice. And then when the Operation Woodworm was resolved recently favorably for the adult industry, the interest in the organization flagged. And it nearly died. But we got a new board in, including me, that instead of lurching from crisis to crisis, wanting to be a trade association to improve the quality of life for everybody. Businesses, owners, warehouse workers. And that’s been our mission ever since. One of the hallmarks was litigation last. Litigation is a last resort because litigation just consumes too much money, too much energy, and so we’ve had a number of successes in lobbying. We’ve had exceptional success in providing training and education, improving quality of life on that level. And then when push comes to shove, as it has, and it’s currently, we engage in litigation. In 1999, 1998, in the same way that I described, 2027 being created, Congress in a spending bill, a must pass bill, in conference, or in hatch redefining the child pornography law to eliminate both the children and the pornography. Said that if an image appeared to be that of a minor appearing to have sex, that was child pornography. And if there was no minor involved, if it was an adult portraying a minor, and they weren’t actually having sex with the blanket was moving up and down, that was child pornography. That could not stand. The industry would have been just anybody could have been prosecuted for anything because that she looks young to me. No one was willing to sue in the past. You know, various other groups stood in for us for the industry, American Library Association, booksellers, periodical leaders. None of us had to touch it. It was radioactive. So we ended up filing suit, lost at the trial court level. We won the Ninth Circuit, Supreme Court took it up. Everybody told us that, you know, we were doomed to lose and we were harming the reputation of the industry because it appeared to be we were scoring child pornography all bullshit. And then, haha, we won. Everybody of those, my peers that criticized it, didn’t remember ever criticizing it before. And it was, you know, one of the most important First Amendment opinions in a 20 year period. And it was the first time that the adult industry had won on content, not on procedure, not in 40 years. So that established the credibility of the organization with other entities that we couldn’t have had before. And then contemporaneously with that, we co-sponsored the World Pornography Conference, where we brought in academics from all over the world. It was the Cal State University Northridge has a human sexuality program. They sponsored it. They did a major conference every few years on a variety of different subjects. That year they decided pornography. They reached out to us to be the co-sponsor. And we brought in lawyers, actors, producers, and academics all together. And that was at a point where the academic study of porn was brand new and was exploding. So now there are two different porn studies, Germans, and the substantial number of major universities all across North America and Europe, now porn study classes. And while I wouldn’t characterize Free Speech Coalition as a major force in that, you were a minor force in that. So when we filed our first Supreme Court case, we had one staff person who answered the phone, sent out the bills, and was the initial contact. Everything else was volunteer. We now have the staff of, I think, six. So we’re still a microscopic organization compared to the groups that you regularly see before the Supreme Court, like the ECLU or Electronic Frontier Foundation and these other First Amendment sort of related groups. We’re a drop in a bucket compared to them. So the fact that we will have had two cases before the Supreme Court is just extraordinary. And the fact that over the next year it’ll be 30 years that I’ll be on the board. And all volunteer. And in that time, we have become what I always wished we would become. We have an executive director who’s one of the most inspiring people I’ve ever worked with, Alison Boden. And we’ve always hoped that we would have an executive director come from the heart of the industry, as she does. She’s inspired our staff. She’s inspired new members. She’s inspired donors to give us more. And of course, when you give us the resources we produce and we get tangible benefits, the most dramatic, of course, being the, in last years, the guiding of 2057, the lobbying effort and the 20, the adults verification litigation, we are, you know, very obviously changing the lives, improving the lives, protecting the lives of the people in the industry. And, you know, when COVID struck, when MPOC broke out, everybody turned to us and we would have these, these, you know, online seminars, giving the best practices. 90% of the participants were non-members. Everyone needs to be a member. It’s crazy. Yeah. But, you know, if we were to get 10%, we would probably, you know, be triple the size we are now. I would be surprised if 5% of the industry is a member. That’s really sad. Well, I want to thank you. I want to thank Allison. I want to thank Mike Stubell and all the other attorneys that work pro bono like yourself for everything you do for the industry with FSC because without you, I don’t even want to think where we would be. It would be a very different world. That is for sure. Talk a little bit about how you got involved in the adult industry and what’s kept you engaged with it for so long. The short story version of it is that I was born to be a criminal defense attorney in my junior high school yearbook. It says I’m going to be a criminal defense attorney. I had no idea what it was. I saw Henry Fonda play Clarence Darrow in a one man show and was very inspired by that. I loved representing the underdog. So I went through college in law school with blinders on it, criminal offense, criminal offense. Got a job with a, one of the great lawyers of the generation in Southern California criminal defense attorney. And he had a partner who represented the adult industry. He retired shortly after I got a job there and my boss, my inspiring criminal defense attorney boss didn’t want to lose the money and said, okay, now you’re the lawyer. I went in with no training and most of the clients fled. They didn’t want to be represented by some, you know, baby kid lawyer, but a few of them stuck with me and those that, many of those that did not all certainly, but a few of the ones who did ended up becoming, you know, big leaders in the industry. And they sort of brought me along with because criminal defense is a very wearing business. It abrades because everybody who is your client has had something very bad happen to them. Sometimes they’ve done the very bad things. Sometimes they did in the wrong place at the wrong time. As I said in a different context, you can’t really win a criminal case. It’s just your cutting losses. It has a tendency to wear you down. And when you affect change, it’s typically one, one person at a time. Occasionally, you know, I’ll get a case that goes up in the court of appeal, but it’s going to be a very narrow issue that, you know, focuses on one in a hundred search warrants or something like that. So the attraction of working for the adult industry, especially the trade association, is that I get to affect change on a much broader scale. And rather than affecting one life at a time, affecting hundreds, thousands, occasion, hundreds of thousands. And I’m working with incredibly creative, talented, committed people because the folks that end up on the Free Speech Coalition Board have leadership in their DNA. They care enough that they’re willing to, you know, sacrifice time and energy to fulfill the mission to make lives better. It helps, you know, keep the inspiration going, although we are a more than off center, right? The adult industry is at the far out corner. In many ways, there’s nothing more important or rewarding than protecting the most vulnerable. So that’s why I’ve done it. I stopped for a long time, you know, people, a significant part of my income was, was advising people on risk. And now the 2057 is no one’s terrified of that. People learn 2057 in the worst possible way by talking to their competitors. We’ll often lie to them about what the best way to go and stuff. But so the old industry has generated very little money for me for probably a decade. But at the same time, as the organization has blossomed and these great people are involved, it’s all the more fulfilling. And the, you know, the current board and the current staff, it’s just a pure pleasure to work with them and see their commitment and see the benefits that they’re bringing. And the fact that the audience, you know, like I said, 90 percent don’t join and don’t sort of pay attention to what we’re doing for them. It doesn’t detract from the fact that we know that we’re doing good. And so doing good is it’s on board. We just need to get more people on board. That’s the reason for these podcasts. And I’ve done many focusing on FSC. Yeah, I’ve seen the, or heard the interviews with Allison, with Mike Stavillo. That’s, I really, really appreciate it. Well, thank you for listening. Last question. Many people say the war on porn is the worst it’s ever been. As a veteran of the legal wars, do you think that’s true or is it just different? I guess the answer is yes and no. When Liberty was at risk, 30 companies were indicted in 1987 in an attack on the mail order business post-porn. And then another 30 companies in ’91, ’92, in Woodworm. And in post-porn, all but two of the companies, the principals went to prison and the companies were put out of business. Adam and Eve was one survivor and then there was a little tiny San Monica company that survived. But every other mail order company went under and the principals went to prison. And in Woodworm, I think only two sets of people, two companies had the result of their principals going to prison. But that’s different. Because the loss of that kind of Liberty, in some cases, in some states, if you were federally convicted, that will cause you to be a registered sex offender for life. That’s a different kind of risk. Now the reason that the current battle, the yes of the yes and no, what’s so disturbing about the current war or battle is what we discussed earlier, the linkage between the extreme form of Christian nationalism that uses anti-porn as a plank in their platform, being so integrated with the Republican Party. And they, just like we have learned and become more sophisticated over the decades, so have our opponents. And this is unquestionably the most successful foray against adult that has previously occurred. So that’s very frightening. As I said, there are reasons for optimism. But what’s inherently discouraging is that any one of three or four anti-porn organizations raises and spends more money in a year than the Free Speech Coalition for a day. That’s disturbing and frightening. And the attack, as I said at the very beginning, is on the economic model that we are most familiar with. Even though when search warrants are being executed on 30 businesses on the same day, all of those businesses that didn’t have search warrants exude them, they were living in complete panic. The difference now is that the economic model is you can’t see the future in that, in that is terrifying. And to the extent they are even partially successful, many, many people will lose their jobs and their livelihoods for no good reason. And everyone needs to know I am the eternal optimist. I don’t see a glass a quarter full, I see a half half full. So, but the industry will survive because what we make people like more than almost anything else. And we are serving a fundamental need. Sexuality is this universally powerful force through all of recorded literature and art. We are giving people what they need. So, yeah. Well, all I can say, Jeffrey, is just keep fighting the good fight. And I think I speak for everyone when I say we’re behind you. And for those of you who aren’t already at least members of Free Speech Coalition, join. And if you have a business sponsor. We’ll accept any penny that you give. We will work with you to make it as easy and effective as possible at whatever level that you’re comfortable with. And we’ll be very grateful for your support. And I might note that the raw numbers matter, right? If 3,000 can performers were to join us when we go to Washington and we show where our members are in their district, that’s incredibly powerful. So not just dollars, but numbers are extremely important. That’s a language they understand. Votes. Jeffrey, I’d like to thank you for being our guest today on Adult Site Broker Talk. And I hope we’ll get a chance to do this again soon. I look forward to that. I really do. Thank you so much for the opportunity. As do I. My broker tip today is part eight of what to do to make your site more valuable for when you decide to sell it later. Last week we talked about information needed to give the buyer and being transparent with the buyer. Here’s more information on what to give to a potential buyer. How well has your content been protected from piracy and what steps have you taken to protect your content? Are you using a piracy takedown or monitoring service? These are important things to know. What promotional tools do you offer to your affiliates? The more tools you offer, the more successful your affiliates will be. What is your traffic breakdown by country? Tier one countries like the USA, Canada, the UK, Germany and Australia are the most preferred. Add in anything else that will add value to the sale of your property that you can think of such as what custom scripts do you use? What content management system software is on your site? Do you use billing or affiliate software like NATS? What’s your retention rate? How you retain your members is of the utmost importance. How many joins and rebuilds do you have a day? Do you buy advertising and if so what kind? Can your content make more money on the DVD or VOD markets or have you already tapped into those opportunities? How much did you spend to produce or buy the content that’s on your site? What do you believe the content is worth now? We’ll talk about this subject more next week. And next week we’ll be speaking with Goddess Reverie, of Viral PlaySpace. And that’s it for this week’s Adult Site Broker Talk. I’d once again like to thank my guest, Jeffrey Douglas. Talk to you again next week on Adult Site Broker Talk. I’m Bruce Friedman. [music] [music fades] [music fades] [music fades] [music fades] [music fades] [BLANK_AUDIO]