Adult Site Broker Talk Episode 240 with Solomon Friedman of Ethical Capital Partners

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 Solomon Friedman of Ethical Capital Partners in part one of a two-part interview. Would you like an easy way to make a lot of money? Send sellers or buyers to us at Adult Site Broker through our affiliate program, ASB Cash. When you refer business to us, you’ll receive 20% of our broker commission on all sales that result from that referral for life. You can make $100,000 or more on only one sale for some of our listings. Check out ASB Cash dot com for more details and to sign up. At Adult Site Broker, we’re proud to announce our latest project, thewaronporn.com. You’ll find articles from industry websites as well as mainstream publications from around the world. It’s designed to raise awareness of our industry’s plight in the war on porn and the numerous attacks on our industry and online free speech by hate groups, the religious right and politicians. You’ll find all that and more at thewaronporn.com. We’ve also added an events section to our website at adultsidebroker.com. Now you can get information on B2B events on our site as well as special discounts reserved for our clients. Go to adultsidebroker.com for more details. Now time for our property of the week that’s for sale at adultsidebroker. We’re proud to offer a unique business. The site sells memorabilia from porn stars on consignment. The merchandise comes from all the top names. Their employee is highly skilled and capable of running the business remotely or in an office. With her, no additional employees are needed, which keeps operation costs low. Most of the traffic comes from the US and other tier one countries. This business makes 40% profit on all sales. All inventory is stored in a secure storage unit. This keeps expenses low. There’s $420,000 in inventory with 2156 items ready for immediate sale. There’s been a surge in international orders showing their growing global demand. New talent is consistently interested in joining and they’ve recently added more big names to their lineup. They manage inventory and shipping directly, ensuring smooth and reliable transactions. This business could be an exceptional addition for anyone who already owns a live camp company or fan site as it complements existing services by offering an exclusive marketplace for performers to sell their items. Only $310,000. Now time for this week’s interview. My guest today on Adult Site Broker Talk is Solomon Friedman of Ethical Capital Partners, the parent company of ALO. Solomon thanks for being with us on Adult Site Broker Talk. It’s my pleasure. Thanks so much for having me. It’s a pleasure to finally get you on. It’s been a long time coming. Solomon is an award-winning trial and appellate lawyer, legal author and adjunct law professor. He’s often called upon to unpack complex legal issues for legislators, regulators and the public. Solomon is represented in advised organizations on complex legal and regulatory challenges. He’s a legal author and commentator. He’s published dozens of academic and popular articles. He also lectures widely to audiences of defense lawyers, judges and police officers on a broad spectrum of criminal and regulatory law topics. His peers have recognized Solomon’s work in both the legal and broader business community. In 2014, he was named one of the 40 under 40 by the Ottawa Business Journal and the Ottawa Chamber of Commerce. Solomon came to the law following rabbinical studies in Israel, talk about a change, where he was ordained in 2005. Ethical Capital Partners, or ECP, is a private equity firm managed by a multi-disciplinary advisory team with legal, regulatory, law enforcement, public engagement, capital markets and investment banking experience. They seek out investment and advisory opportunities in industries that require principled ethical leadership. ECP invests in opportunities that focus on technology, have legal and regulatory complexity and put a value on transparency and accountability. ECP’s philosophy is rooted in identifying properties immutable to their responsible investment approach and that they have the potential to create attractive returns over a compelling time horizon. ECP is ALO’s parent company. I always want to say ILO, but I said it right. ALO holds several widely popular and diverse online adult entertainment and gaming properties you might have heard of. Some of them, Pornhub, U-Porn, Brasers, Men.com, Nutaku and more, all of which maintain robust trust and safety protocols. Solomon, please talk about the challenges your company faced when you purchased MindGeek and how you’ve addressed them up until now. Challenges? There have been challenges. That’s nice to me, Bruce. First I’m hearing of it, as they say, but seriously, folks. Yeah, you know what? This was an acquisition that was a long time coming. It’s one that took thought and deliberation and strategy. Obviously, then MindGeek, since rebranded to ALO, faced a number of challenges. I’d say they weren’t challenges that were unique to the company. In many ways, MindGeek was a canary in the coal mine for what the rest of the adult industry would face shortly thereafter. But what MindGeek faced was a very well-organized, very well-publicized campaign that I would say kicked off with the infamous opinion piece. I don’t call it a news article because it wasn’t news journalism. It was an opinion piece in the New York Times. It was a hit job. Yeah, it was. But the trouble was the response was really lacking from MindGeek. And their response was not much of a response at all. That snowball, I think the rest of the industry sort of watched and not only were others not leaping to the defense of MindGeek. And we can get to that. But MindGeek wasn’t really leaping to its own defense. That then snowballed into some really unfortunate hearings in the Canadian Parliament where those spewing misinformation were treated with kid gloves and praises experts. And anyone with a contrary point of view was really silenced or marginalized. And the company did not do very well. All of those things, which were really unfortunate times and having gotten to know many of the folks at ALO, many of whom lived through that turbulent period, it was a very, very difficult time. In particular, when the truth was so at odds with this popular narrative, but it was a narrative that those who are fundamentally opposed to the adult industry were eager to seize on, it then spawned litigation. It spawned significant financial troubles in the form of using a MasterCard withdrawing processing from the Pornhub domain. And it really put the company in a very distressed state. So I always say, that’s the bad news. The good news is it gave an opportunity for new ownership to enter the picture. Every time I reflect on the challenges, and there are challenges, there continue to be challenges. I know that without those challenges, when I talk to my partners, they say, we wouldn’t be here, right? If this was easy, if it was smooth sailing, we never would have had this opportunity. So this is really an opportunity. I very much believe it’s an opportunity that was born out of really a company’s deepest crisis. The company really in large part weathered that storm. We at ECP don’t take credit for that. I’d say, if it hadn’t been able to weather the storm, we wouldn’t have been able to acquire. But there’s no question that when it comes to everything from blowing more out at the same time, public perception, public image, it was a very, very challenging time. And a big part of that was the company and its ownership were not willing to speak on their own behalf. I always say, it was just a matter of simple math. There are only so many inches in a newspaper column. And if you are not present, then that is more inches that you have ceded to those who are committed to your destruction. And we’ll say whatever they have to say in order to destroy you. And here’s the other thing. Okay. I’m just a little bit more familiar with that company. Your predecessors are there. And I have friends who were there. And I know a lot of the insight stuff. And it was very odd. Well, first of all, when they started the tube sites, they were very much as you well know, disliked in the industry because it laid a lot of hurt on a lot of the membership sites, which were the and are the backbone of the industry. Because that’s the content, right? You have a lot of membership sites too. And the other thing was they weren’t president shows. They had no public relations to speak of. They, as you said, didn’t speak on their own behalf. And if they had become a part of our industry, then people would have been behind them. But I think people, a lot of people in our industry, I’m not one of them, but a lot of people in our industry were glad to see them take the hits. Yeah, no doubt. And I actually think, as I’ve really gotten to know the industry over the past couple of years, I think there’s actually a little bit of collective regret on that front. It’s sort of the point being there may have been a sentiment that the tube sites are getting there, come up and they’re getting their due. They sort of rode high and mighty and now they’re falling, not realizing that nobody was interested in taking down only Pornhub, right? That was never anyone’s interest. But those who want to take down Pornhub want to take down the entire industry. I think one of the proofs of that, whenever I have an opportunity to respond to an allegation made by one of these, and I say quote unquote, "anti-trafficking organizations," we work with legitimate anti-trafficking organizations. Of course, we actually do something to fight human trafficking. But those who claim to be anti-trafficking, I always say, go back and ask that person that organization, what does their ideal porn site look like? What are the rules? Give them to me. I’d love to hear them. And of course, they go back and they’re met with stony silence because their ideal porn site is a porn site that doesn’t exist at all. But I think the rest of the industry in a certain way didn’t realize that this was just the first step. And the proof, by the way, trained in the law, I believe in gathering evidence and analyzing it, is the wave of age verification laws that is sweeping the United States, targeting the adult entertainment industry designed to do one thing and one thing alone, and that is make it impossible to operate in this industry. It doesn’t matter what your brand is, how big of a site you are, how small of a site, whether you’re a sole proprietor or a large corporation, that’s what those laws are targeted to do, not to protect young people, of course. I think it’s become apparent to everyone that that was not the take down of Pornhub. It was the first salvo in a very well-planned and well-orchestrated campaign against the adult industry, which is essentially an attack on fundamentally unsexual freedom. Yes. And in the US, the First Amendment? Absolutely. Yeah. And we’ll certainly go into the age verification thing later. So where’s the company now compared to where you were when you purchased SmineGig? Yeah. So there’s a couple of barometers that I like to look at, and we’ll go through. I try to organize this into three categories. The first one, in many ways, the most important one is trust and safety. The second one, I’d call it public communications, and the third one, I’d call it government relations, how we’re trying to do things very, very differently. So we’ll start with that first one, which is trust and safety. In December of 2020, when that piece, the Children of Pornhub, came out in the New York Times, and it was Kristoff’s opinion piece, anybody who knew anything about the state of trust and safety in the tube site universe knew unequivocally that Pornhub was not the wild west. It was not on anything goes. It was a site, in fact, that was seen as quite vanilla by many in the industry. It was a site that had moderation, that had take down, that was really starting to take copy rate and DMCA violations very seriously, which is sort of ironic that they became the symbol of this crusade. But there was more work to be done. And as we know, if we look where things are at today, my view is that ALO is setting the standard for what trust and safety looks like on a site that allows user-generated content. So it starts with full verification of the identity of the uploader, now full verification of the age identity and consent of co-performers, and full content moderation. And you couple that with a content removal request process that where all someone needs to do is indicate in a form that they have first-hand knowledge or they themselves are depicted and they don’t consent, or if he’s depicting someone who appears to be underage and notwithstanding all the other checks and balances that content has gone through, pre-upload, of course, because everything is moderated pre-upload, that content will be removed immediately and then subject to investigation. That is the gold standard. And just earlier this year, the Internet Watch Foundation, the United Kingdom, released its best practices for combating child sex abuse material by the adult industry online, and they partnered with ALO in order to publish those standards. So you sort of have recognition from a pretty distinguished source in the United Kingdom. And so that’s setting the standard. So that’s been a journey, right? When the end of December, early January, 2021, when all unverified uploads were removed from the ALO, then Mind Geek platforms. Now, not to say that that content was problematic or illegal at all. That’s not what I’m saying. That’s not what it was, but it was unverified in terms of the identity of the uploader. And on every other tube site today, it remains that way. People said, "You’re going to die without content." You removed 8 million pieces of content. This is a game driven by content. I think we’ve actually seen a real change in that prioritization of quality over quantity, of organic traffic over quantity-driven SEO traffic. It’s been a shift for everyone. And I think it’s been one that has been a very, very positive one for the company, not just from a perspective of trust and safety, but from a perspective of having a site that promotes really high quality content. So that’s number one, is trust and safety. It is a different world today. And I think I said this at X-Biz last year when I spoke, but I’ll say it again. In many ways, the era of the tube site is over. There are no more tube sites, at least responsibly run as there used to be. The trust and safety at the "tube sites" today is akin to what you would find on any pay site in days past and presently. We call them tube sites because they’re free to access and add support. But they’re not tube sites in the way that we speak. In fact, I think the tube site itself today creates some confusion. Even when I sit down with legislators or regulators or law enforcement and walk them through trust and safety, I do very publicly and very vocally, they say, "So it’s like YouTube, right?" And I say, "Well, it’s like YouTube if you can’t create an account without verifying your real identity, and nothing will go live until it’s reviewed by both machine and human processes." And they say, "Well, how long can that take?" And my answer is simple. It’s the same answer every time, as long as it takes. That’s the answer. And it doesn’t matter if it’s an hour or five hours or 10 hours or 10 days, it’ll take as long as it takes to get it right for that content to go live, which of course can be a challenge for uploaders. We know that and we try to work with creators, but that’s something we simply won’t compromise on. So that’s the trust and safety piece. The second one is the communications piece. And I’m really happy to be here speaking to you and in some ways, it’s unfortunate it’s taken so long for us to sit down, but in many ways, I’m happy that we now have a real record that we can look back on and I can point your listeners to. And that is you go back and you look at news stories pre-March 2023 when we made the acquisition. And every story about Pornhub and Mind Geek was whether intentionally so written or not a hit piece. It was filled top to bottom with myths, not just about Pornhub, but about the industry, pervasive myths, right? And with really very little correction. Since that time, I actually before this interview I sat down and I was going to make, I made a bit of a tally. I’ve done over 300 interviews. Members of my team have done even more. And those are for the stories that appear. You see, we also do interviews and now give extensive background information or stories that never go anywhere because the journalist realized that there is no story here. And I have been fed misinformation. Right? Well, as speaking from a communications perspective, the stories that never get printed are in many ways far more important than stories that do get printed because often we’ll have well-meaning journalists who have been presented with a particular set of facts. And then, you know, we answer every single inquiry. One of my goals, right? I had a few sort of set goals on the communications side when ECP made this application. And the goal was simple. It was that the phrase "Mindpeek was not available for comment" will never again appear in a news item. Ever. That is, and I’ll tell you this, I want to be very clear about this. There are journalists as we know who have a particular bent who are anti-adult. They are. Just like there are journalists who are pro-dult, then the vast majority are neutral and generally not terrifically knowledgeable. But there are journalists who hate what we do and have an axe to grind. We speak to everyone. As long as we’ll be accurately quoted, right? We’re talking about something that won’t even quote what we’re saying accurately. That’s not a journalist at all. But if we will be accurately quoted, then we would rather participate in the story because then we are at least providing balance to a false narrative. Absolutely. You know, if you trace those news articles and you look at them from like pre-March, March 23, and then you start March 2023. So March 2023, they’re like 25% have our perspective of them. And then 30%. And then 40%. And then 50%. And then soon you have stories that are not negative or hit pieces at all. But for example, whether it’s about age verification or about other forms of legislation or regulation, we’re being quoted as an authority. Right? We’re being quoted with a perspective that carries weight with it. So you can’t do that unless you are willing to sit for those interviews and of course to do them well, right? To be well prepared for them, well informed and to not look at the media as the enemy. You know, I think we, in this industry, we have a tendency to do that because we have a siege mentality. And the reason we have a siege mentality, Bruce, of course, is because we’re under siege. Always. I’m not saying that that’s not the case. It is the case. But notwithstanding that, you know, you really need to do the legwork and put yourself out there. Of course, that comes with the negative. When your name and face and contact information is easily accessible, you get an email inbox filled with, you know, really hateful, bile and vitriol. And, you know, if I’m not told that I am literally Satan three times a week, I’m like, we’re not doing enough media work. You know, and that’s the case. So the communications picture has changed drastically. That’s number two. Number three is our presence with government regulators, legislators and law enforcement as a result of being part of this industry. If you want to stay hidden and I understand why people do, of course, I understand why creators use stage names and it makes absolute sense. It’s because you’re subject to harassment and physical danger. Never mind the sort of psychological effects. I get that. But on an industry level, if you’re not able to be out there, then you cannot communicate with decision makers. You can’t speak sit down with legislators as we have at ECP. We’ve met with Canadian and American legislators and regulators, lawmakers, and you’d be so shocked how putting a human face and a name to our industry really, really humanizes us. Right. You know, in fact, one of the things that we do is when we go out to meet with legislators and regulators is we always say, we have no ask. We’re not here to ask you to do or not do anything in this meeting. That’ll come. Don’t worry. But in this meeting, we’re just here so you know who we are. So if a bill comes across your desk or a fellow lawmaker asks you to sign on to a motion or petition or something, you know who we are and how to get in touch with us. We are determined to be accessible, which of course is not only a total 180 for the company, but it’s a total 180 for the industry. I always say this, I don’t want to be alone in doing this. And it’s been really nice to see over the past year that I’m not. We’ve seen some really effective advocates rise from the industry because our industry is full of talented and articulate and thoughtful and sophisticated people. And if all we’re doing at ECP is leading by example, that’s something I think that will benefit the rest of the industry. So I think you ask how the picture looks different. Those are the main categories. Obviously a lot of detail in there, but those are the main categories in which I can sit back and say, you know, the work’s not done. The work has barely started, but we have blazed, I think, a positive trail for the company in the industry. I would imagine your legal experience and your past experience dealing with legislators has really been a plus. Yeah. And in particular, when you think about what area that’s in, so a testified a dozen times before House of Commons and Senate committees in Canada on thorny issues, the criminal law, constitutional law, the regulation of firearms, things that are often very emotive, lock them up, throw away the key or ban all guns, you know, or abolish bail, right? Kind of those sort of issues. If you thought porn was divisive. And you know, one of the things that I really pride myself on is educating. I’m not sure if you mentioned this in my bio, one of the things I’m very proud of, and I enjoy very, very much into this day, I teach law at the University of Ottawa, Faculty of Law, I’m an adjunct professor there, and education is really effective communication. So being able to unpack whether they’re emotive issues or difficult or divisive issues and just try to take the emotion out of it, try to stick to the facts and the law, I think you’re right, it has prepared me well for these kind of conversations. Well, you’re dealing with other lawyers. I mean, come on, all the politicians, they’re all lawyers, right? It’s unfortunate. You know, I don’t know where becoming a lawyer was an essential qualification to be a politician. We might want to rethink that, but it’s unfortunately the fact of life. You mentioned other organizations. Have you teamed at all with, for instance, Woodhole or the FSC on anything? So both of those, yes, yes, yes, a million times yes. I have only the best things to say about both FSC and Woodhole. Not only do we work with them in terms of communicating and coordinating efforts and discussing shared challenges, but we’re also joined with them in litigation. So in the Texas litigation, in which our company and others have challenged the age verification that was done under the FSC banner. And now one of the really, really heartening things to see that I think tells us that our struggle is permeating the mainstream is that when we took the case to the Supreme Court of the United States, we were joined by the ACLU. And that case is now co-led by the ACLU and the FSC, which is really, really important. When it comes to Woodhole Freedom Foundation, that’s an organization I think that does not often get enough credit for the work that it does. We often reference their academic materials. They have a great wealth of just facts and citations to peer-reviewed scientific research to debunk so many of the myths that are just recklessly spread by those who hate porn. And what I really, really appreciate about them is they’re not porn advocacy group. They are not the porn lobby. What they stand for is sexual freedom. And they recognize how essential of a freedom that is. And part of that is that sexuality is in many ways so intrinsic to who we are as human beings. And that’s both in the diversity of sexuality and the spectrum of sexuality and the wealth of sexual experiences that adults enjoy and are so important to shaping who we are in both public and private lives. Woodhole fights for that every day. So this is not a battle that one company can go at alone or even one organization. I always tell people, I say, contributing to FSC and to Woodhole and supporting their work is something that everybody needs to do. If you care about having these freedoms, if you want to continue to have them, you must contribute to those organizations because they are on the front lines. FSC, for example, is the reason that age verification failed in Arizona, in which it failed on the governor’s desk. They were also present in California. And I know it’s best to imagine that a state like California can consider passing these types of age verification laws. And I say these types, meaning site or platform based. And it’s because it’s very tough in an electoral environment to be put on the side of, I don’t care about children, right? Because they have framed the debate so misleadingly. But FSC has been there to educate at every turn and they’ve had significant success in so doing. They’re awesome. They’re just awesome. Yeah, I always say, I want to be Alice in Bowdoin when I grow up, you know? Yeah, no kidding. Yeah, she beat me up for community figure the year last, two years ago. So, you know, I’m up against her again. I sent her a sarcastic email. I suppose you’ll win again. Well, I’ll tell you this, Bruce. So the previous time, you know, I didn’t have an ex-busy account. I couldn’t vote. I have voted and Bruce, you’ve got my vote. And that’s with much respect to the very, very distinguished people who are on that list. Hey, we got to keep it in the Freedmen family, right? That’s what I’m saying. You know, we got, this is real talk here, Freedmen on Freedmen. Some real Freedmen on Freedmen action, which in the porn industry is not a title that will ever sell anywhere else except on your podcast. God knows. Let’s talk and this rolls right into what you were discussing. Let’s talk about age verification. It’s a topic that has put your largest property, Pornhub, right in its crosshairs. Your company is geo-blocking Pornhub whenever a U.S. state passes age verification. How has that impacted your company and the bottom line? We just talk in general about age verification, obviously. Yeah, so let’s talk about it. So I’ll say we’ll divide it into the wrong way to go about it and then the right way to go about it. So what we have seen in the various states in the United States who have passed what is really copycat legislation is an approach that would require platforms to themselves verify the age with identification of an individual who wants to, an adult who wants to access legal adult content. So to us, our perspective is we start from the following premise. Number one, we do not want young people on our platforms. We do not want a single minor accessing content and that’s for two reasons. Either one of these reasons are sufficient. Number one, it’s not good for young people. Young people have enough difficulty distinguishing between fantasy and reality and this is adult entertainment. It’s for those who can appreciate fantasy and fiction. Young people cannot. They shouldn’t be on the site. That’s one. Number two, I remember and I was having a conversation with the Canadian legislator who was pro this kind of age verification and the legislator said to me, but come on, Mr. Friedman, you want the clicks though. The clicks are good for you. And I looked at this legislator and I’m not identifying them even by gender because it was a private conversation. So I’ll just say that. And I said using their title, you need to understand that clicks don’t make us money. Clicks cost us money. Traffic costs money. What makes money is ad revenue and advertisers are only interested in those who can buy their products. And every single one of the advertisers on any of the video sharing platforms operated by Aelo only sell products that are available to adults with an adult credit card. So any young person who accesses a site is costing the company money because traffic costs money and is lowering the price of the ads because and the value to advertisers because the conversions are going down. So let’s say you reject the fact that there is an ethical bone in my body. And go ahead. You can take that position. It’s not true, but you can take that position. If I am motivated by nothing more than financial self-interest, I don’t want a single young person on our platform. Period. And it was like a light bulb moment. Right? And you’re talking about somebody who’s one of the architects of this legislation who thought that every click makes money, every pit of traffic makes money, not understanding that there’s no economic case. Never mind a moral or ethical one. That’s number one. We don’t want young people on the platform. Number two, we want a method that is effective at keeping young people off the platform. And number three, we want a method which is not violative of the privacy of law-abiding adults who are doing nothing more than exercising their constitutional rights to access adult content. So when you look at the laws that have been passed by Texas, Mississippi, Virginia, etc., those fail on both protecting children and on protecting the privacy of adults. So how do they fail on the protecting children side? Well, it’s very simple. It’s like making a big locked door and placing it in the middle of the desert. All someone has to do is walk around it. So as we all know, these methods are easy to get around. Not that I in any way encourage getting around them. We respect the law by not offering service in those locations, but it is no coincidence that two things happened the day those laws go into effect and we stop offering service. Number one, the searches for VPNs go up 700%. Number two, the searches for our non-compliant competitors go up the exact ratio of visitors who were previously searching for our platforms. And that’s, by the way, you don’t take my word for it, that Google has that data open to everybody, this search data is not from some special ALO lab. I know people think we’re the kings of data. We are, but you don’t need to be. It’s all available out there on Google. So obviously that means that young people are accessing content and it’s actually even worse than that because they’re being driven now to platforms that are by their very nature not compliant with this law. Who knows what other laws they’re not compliant with. So you’re actually driving both young people and adults to the darker corners of the internet where there are companies who don’t respect the jurisdiction of these states. So that’s why it doesn’t protect children. And we tried, for example, when we’re studying this issue to answer one single question. And that is, how many porn sites are there online? Not an easy question to answer. And the estimates are at least in the high hundreds of thousands, if not in the millions, which means you have a system that is going to require giving ID to hundreds and hundreds of thousands, if not millions of platforms with no regard for the privacy of the individuals in question. So one of the things that I say, and I said this to a legislator, I said, look, if this was the law everywhere, imagine you had a way of enforcing it. You don’t. But imagine you did. It would be far more profitable to not be in the porn business, but just be in the identity theft business. Operate purportedly adult platforms say, look, it’s really sad. I have to take all your private information and then go around and do God knows what with it. Right. And that’s what you’re inviting here. So for that reason, we made a policy decision that where there is a law that is both ineffective at protecting children and exposes the private data of users to real significant jeopardy, we would not offer service. And that’s not an easy decision. It’s been a painful decision. But it’s one that we did because you have to take a stand against these laws. And also, I’ll say the other side of it, which I don’t think people quite got at the beginning, but they’re really starting to see now is the more that’s happened, the more the public consciousness has been raised to how awful these laws are. So for example, we did, however, agree in Louisiana to offer service because in Louisiana, the method was not to take anyone’s information ourselves, but it all goes through the government LA wallet system. And the reason we stuck around in Louisiana and continue to do so is we wanted to gather data so that you talked about being the kings of data so that we could provide it to regulators down the road. And what did we see in Louisiana? So Louisiana is a state where if this is ever going to work, this method, it will work in Louisiana, right? You have a state where the adult population, more than two thirds of them have this digital ID ready to go and they use it all the time. So we said, that’s fine. Let’s try that out. And what have we seen an 80% bounce rate when users are confronted with what should be the ideal platform based solution? 80% of Louisianaians, folks from Louisiana, let’s call them that, say thanks, but no thanks. Which means if it’s not going to work there, it’s not going to work anywhere. We also have done some testing in France with the French government where we implemented a range of age verification methods on a segment of our traffic. One of the nice things about having significant traffic is we can slice off parts of it and test things, right? So we agreed to do that with a number of methods. And in France, we saw between a 95% and 99% bounce rate of the French who said, thanks, but no thanks. That would be a non merci for my Française speaking French Canadian folks. So that told us this is not going to work. However, that’s not to say that we sit on our hands and say, there’s nothing that can be done about this. So I want to talk about a couple of things. The first thing that we did, that Aloe put into practice all around the world after the acquisition. Today, if you go visit Pornhub or any other Aloe video sharing platform for the first time, so without cookies. I always say the way I used to when I first started researching this in incognito mode. And then I quickly realized, why am I doing all this research in incognito mode? Like I got to be proud if I’m going to be part of this acquisition. Also, I thought to myself, if Google charged per use of incognito mode, I’d be bankrupt by this point. But if you look at it without cookies for your first time, what you’re going to see before you see any explicit adult content whatsoever, you see a link to the parental controls because we know that parents have a strong role to play in this and we wanted to center for them. This is how you block our platform. Of course, it should. We know that’s not enough. One of the things that we are of the view works well and it’s nice to see the rest of the internet seems to be coming around to this. The Australian eSafety Commissioner just released this as her findings. The Spanish data regulation regulator released this as did the French telecommunications regulator said this is the solution and that is device-based age verification. As opposed to basically spewing your private information to site after site after site to have the device verify you one time, your credentials, your age, and then that would be the end of it. In fact, not much would actually probably be required to make that happen for those of us who you’re on a contract with AT&T or a Verizon in the United States or similar. We already know you’re an adult because you had to give them your ID to lease this phone from them in the first place. The way I put it, I said this to an audience of law enforcement, about 400 police officers and prosecutors are speaking at an anti-internet child exploitation conference. They invited us back so apparently they like us and go back in a couple weeks in Canada. I said, "Pornhub wants to be blocked by default." It was like a silence. I said, "No, I’ll say that again. We want it to be no access by default without age verification on the device." By the way, I know that’s not a position that’s shared in the entire adult internet. I’m aware of that and that’s okay. We’re family. We can disagree with each other. We agree about more than we disagree on. To me, it’s inevitable and it needs to be done in a way that is number one effective, actually protects kids because of course, if an adult can get around something with a VPN, a kid can get around it with a VPN or many other methods. The device to us is really where this has to happen. I think mainstream social media is starting to pick up on that. Child protection groups. Very interestingly in our litigation at the Supreme Court, this was one of the biggest surprises and I encourage your listeners to go take a look at this. I can send you a link afterwards if you want to post it because I think it’s a really important document. In our motions for the Supreme Court to hear the case called a petition for cert for the Supreme Court to hear the case, a number of organizations filed motions in support. Obviously, the usual suspects, the Free Speech Coalition, the Woodall Freedom Foundation, one would expect that of course, but there’s a brief filed by an organization called ICMAC, the International Center for Missing and Exploited Children. Their brief is focused exclusively on protecting kids and it lays out in detail why the Texas type legislation is ineffective, actually makes children less safe and that device-based age verification is the only way to go. So it’s not anymore just the adult internet saying this, we’re seeing it more broadly. In fact, we saw it echoed by meta in the wake of the criticisms that they face. They sort of had their own New York Times moment, right? When Mark Zuckerberg did not do very well in front of Congress and was confronted with some unfortunate things like, for us, for example, the idea of see results anyway coming up when you search for something unlawful to us that’s unthinkable. Seeing some of the negative effects of social media on young people, they’re now saying this needs to be done at the browser or device level. That’s fine. We don’t need credit for it. We always know, in porn, we’ve changed everything about the internet. We invented online credit card processing and video streaming. It’s an industry that has so, so much to be proud of, but we don’t need the credit for it. We just need to get it done. We’re now seeing mainstream social media starting to champion this. We’ve got who are the holdouts, who’s left? Well, the device manufacturers, Google, Apple, Microsoft, they’re the ones who need to ultimately implement this. I always say, Google, Apple, Microsoft, they can be the key and we will happily be the lock, but it’s going to take time. It’s going to take more will, for sure. My broker tip today is part seven of what to do to make your site more valuable for when you decide to sell it later. Last week, we talked about trademarking your site and ways to make it unique. Next, when you decide to sell your website, make sure you have the following information available for potential buyers. Financial information about your company, your website, and any other aspect of your operation the potential buyers may want to find out about. This should include, for a pay site, a detailed inventory of your content, number of images and number of videos, how much of those are exclusive and how much are non-exclusive. Financial information for at least the last three years, if your company is that old. This should include sales reports, profit and loss statements, and billing reports. Get all the information organized in a legible format that a good broker can use to sell your property. If you decide to sell it yourself, organize a list of potential buyers and start the process of contacting them. Be realistic about what your company is worth. In today’s market, the kiss of death is overpricing your property. Is there anything that a potential buyer needs to know, such as, "Are you being sued? Do you have any substantial debts?" Don’t let these things be a surprise to the potential buyer. They’ll either find out before the sale and not buy, or they’re going to find out after the sale and you’ll have another lawsuit on your hands. Disclose everything. We’ll talk about this subject more next week. And next week we’ll once again be speaking with Solomon Friedman of Ethical Capital Partners in part two of our conversation. And that’s it for this week’s Adult Site Broker Talk. I’d once again like to thank my guest, Solomon Friedman. Talk to you again next week on Adult Site Broker Talk. I’m Bruce Friedman. (upbeat music) (upbeat music) (upbeat music) (upbeat music) [BLANK_AUDIO]