ASB Talk Episode 8.wav
[00:00:10] This is Bruce Friedman of Adult Site Broker, and welcome to Adult Site Broker Talk, where every week we interview one of the movers and shakers of the adult industry and we discuss what's going on in our business. Plus, we give you a tip on buying and selling Web sites. This week, we'll be talking to adult industry attorney Chad Anderson, a.k.a. Chad Knows Law.
[00:00:34] I say broker is proud to announce adult site broker Cash, the first affiliate program for an adult Web site brokerage with adult site broker Cash. You'll have the chance to earn as much as 20 percent of our broker commission, referring sellers and buyers to us at adult site broker. Check our Web site at adult site broker dot com for more details. First of all, today, let's cover some of the news going on in our industry. In response to escalating concerns over Corona virus and new travel restrictions, X Business announced plans to go virtual for its 2020 conferences, including Expos, Miami Expos, Berlin, the Expos, Camp Awards and the Expos Europa Awards Expos. Miami will take place August 24th to twenty seventh, with the Expos CAM Awards happening the final day of the show. Expos Berlin will be October 19 to the 22nd and the Expos Europa Awards will also happen the final day, Expos events director Mo Helmy said after careful consideration of various indicators regarding the development of the worldwide Koven 19 health crisis. We have determined the most responsible decision is to pivot to a virtual format for our 2020 events with a goal of delivering the signature show experience our community is accustomed to. Event organizers have closely watched day to day developments in the trajectory of the pandemic and various official responses, including continued stay at home directives from state authorities and the Centers for Disease Control. With the recent reports of Cauvin 19 cases spiking up, it became clear organizers would be unable to safely host the events. Other shows, such as the A.W. Summit Webmaster Access Amsterdam and why not have also had virtual shows? The Why Not summit will premiere July 20th through the 22nd.
[00:02:32] A New Jersey federal judge on Tuesday overruled a circuit court ruling preventing Viksund media group from identifying alleged illegal downloads of their adult content. The new decision by U.S. District Judge Noel Hillman granted the subpoenas requested by Viksten to allow them to identify individuals with computers associated to 13 IP addresses allegedly downloading their content illegally. According to the legal news site Law 360, Viksten monitors for IP addresses that download its films, then use Geo location technology to figure out roughly where the network is located. It then files a lawsuit in the appropriate district against anonymous subscribers linked to the address, allowing it to request a subpoena to force the Internet service provider associated with the address to reveal the name of the subscriber. The company's lawyers have filed more than 3000 similar lawsuits across the country since 2000 17 receiving criticism from some legal observers and judges about their tactics. The Arizona judge overseeing the criminal trial of the former back page dot.com owners has granted a motion by the defense to move the trial date to January twenty twenty one due to the concerns regarding the Covid19 health crisis in the state. U.S. District Court Judge Susan Vick filed a ruling yesterday stating that the court feels that it cannot ensure the health and safety of all trial participants at this time. Judge Bernard cited the number of people expected in the courtroom for the high profile trial as one of the reasons for the postponement until next year. At a minimum, the judge calculated there might be 40 people in the courtroom, including prosecuting attorneys, defendants, their attorneys and jurors. The judge also mentioned that compelling out of town witnesses and lawyers to travel to Arizona during the current pandemic was fraught with risk.
[00:04:38] The trial, originally scheduled for May 20 20, had last been postponed in February until August 17th. Now let's feature our property of the week that's for sale at Adult Site Broker. We've reduced the price on a network of two foot fetish pay sites. The first scientists and all tickling fetish site with every category of tickling. The primary focus is female and female tickling. The second site has forced orgasms as well as hand jobs, all with a fetish twist featuring showing of feet in the videos. The hand jobs are more tabu. Female domination themed. There are also a number of highly profitable clips for sale stores as well, featuring the content. The most profitable of those stores features foot worship. Some of the stores are top 50 in the world and clips for sale. And one has been as high as number four in the world since the owner is never build out of foot worship site. But as plenty of content for one. This is a wonderful opportunity for a new owner. Also, the owner has never advertised the site or started an affiliate program. A new owner could do both and instantly boost sales. The company has over 11000 videos and their content library all exclusive. Also, since the owner has been out of the day to day operations of the company for some time, a new owner will have the opportunity to keep on the current people who are operating the network. So there will be no interruption in the new owners ability to get content. Now time for this week's interview.
[00:06:13] Today on Adult Site Broker Talk, I'm speaking to prominent adult attorney Chad Anderson. Chad, thanks for being with us today on adult site broker talk.
[00:06:22] You're welcome. Truly an honor to be here, Bruce.
[00:06:25] Thank you, sir. Here's a bit about Chad and his law practice. He was the youngest person to win county attorney seat when he was elected in Iowa in 1998. And now he specializes in adult business law. I would list the categories of life practices, but I don't have three hours. So let's just say that if you have a legal need in the adult industry, Chad can handle it for you. He is licensed in Arizona, Iowa and Nevada and has been admitted to the 8th, 9th and 10th Circuits and the U.S. Supreme Court. Chad is a Midwestern boy, born in Minnesota, raised in Iowa, and he graduated law school in North Dakota.
[00:07:05] You earned a master's degree in cyber security law from the University of Maryland School of Law, and he's run twenty one full marathons, which is twenty six point two miles or forty two kilometers. Better you than me.
[00:07:21] I think he should have learned to take the car by now. He's been practicing law since 1998 and he's been an adult since 2004, which makes him an old dude. Chad's mission is to provide the best representation in a confidential and affordable manner to a select group of long term clients. And let me also say that Chad has been doing some work for our company, as well as some clients and associates of ours. And I could not be happier. First of all, Chad. How did you get into this crazy business?
[00:07:56] That is a that is an interesting story. I was a really a starving lawyer back in 2004. I left Iowa for Arizona mostly because it snows in Iowa.
[00:08:11] And I really wanted to move south. And also it was the time that I came out of a closet and I felt much safer in a big city in Arizona.
[00:08:23] Yeah, that's much safer than Iowa, even where I was the county attorney and I had you know, I had the entire police force is the sheriff's office, all the law enforcement. We're actually underneath me, so to speak, so to speak. But I took the exam in Arizona and passed it and moved here without really having any plan of how to make a living after that. And I did a couple years with a real estate title company, which was just excruciating before I had it.
[00:09:10] It was awful just reading contracts and writing contracts that were truly just the driest stuff you could do is buying and selling real estate. But I was had a at a barbecue, a friend of mine hit a neighborhood barbecue and his neighbor happened to be a fellow by name. Craig Dant, Greg Craig had been at S.C.. Bill, right.
[00:09:39] Well, Craig and I told Craig that I was basically a starving lawyer and he asked me if I would be willing to take on adult entertainment clients. And I told them, you know, if if I can pay my electricity bill, I certainly will. So he said, come to Miami, there's this trade show down there. And three weeks later, I maxed out my last credit card to buy my airplane ticket. I cut a hotel room a couple of miles from the diplomat, and it was one of those old hotels had been built like right at the early 50s.
[00:10:22] And I think the original air conditioning was still in. It was just there's two bit sleazy die. That was twenty five bucks a night, but it was all I could afford. And while the first it was a summer intern next and in Miami in 2004 and being a lawyer, I guess I was the only openly gay lawyer that was looking for new clients. Sure. And I was introduced to just it seemed like everyone I know. It was overwhelming. And within three months of that trade show, all I did was adult. I left.
[00:11:05] I left this the small, small firm that I had been working at and really not making, you know, making anything but the adult entertainment industry, really. It welcomed me. And it does. It does. You know, everyone is welcome here. Yeah. Well, until you're not you know, you're you're given the opportunity. Just don't fuck it up.
[00:11:36] Oh, yeah. And that's exactly right. Because if you if you screw up then.
[00:11:43] Bye bye.
[00:11:45] Well, you know, I grew up in a small town and working in the adult industry reminds me a lot of working in a small town because everybody knows everybody kind of reminds me of high school, actually.
[00:11:59] But actually, maybe junior high.
[00:12:04] Yeah. We're like that.
[00:12:07] Some of the antics. But it was that, you know, that that's how I got into it. And it didn't take very long to kind of get established and and build reputation as being a, you know, an honest lawyer, which was kind of surprising.
[00:12:27] Wait, wait a minute. Are to those two words go in the same sentence?
[00:12:33] Normally, no. So when you hear them together, you gotta be kidding. I'm kidding because I know that's the case working.
[00:12:41] Yeah, but you always kind of got to play that tape back.
[00:12:43] Did he really say honest lawyer, the biggest oxymoron of all? No. Well, it's military intelligence, right?
[00:12:54] You know, it's the 98 percent of lawyers that give the other two percent of us a bad name. Exactly.
[00:13:00] So what are the economic advantages of producing and living in Las Vegas over L.A. these days?
[00:13:09] Oh, Las Vegas. Las Vegas has some surprising advantages, and I no longer live there. I did live there for almost two years, pass the bar exam there in 2017, which is which was a, well, 20 years, almost 20 years after my first one.
[00:13:32] Damn, that thing doesn't get any easier. Two and a half days long. But there's some things about Las Vegas. One is that, you know, everyone says they don't have state income tax, but and that's true.
[00:13:48] There isn't a state income tax, but the state generates money through taxes and it's either through sales taxes, property taxes. Nevada gets a lot of money from hotels and casinos. Oh, yeah. But you still pay property to actually still pay sales tax. It's, you know, that's a little higher there.
[00:14:12] But the overall tax burden is lower than California.
[00:14:16] And one of the things about Las Vegas that you don't think about it first is if you have a business where you fly models in that you're actually doing photography and filming of models from around the country, Las Vegas on it is, I think, the cheapest place to fly in and out. And there is there is a direct flight to just about every city in the country, to Las Vegas. So if you've got if you've got a model in my. Not North Dakota. There.
[00:14:52] Well, sorry, sorry. I'm sorry, my not North Dakota, OK, but you know it.
[00:15:00] Well, before Corona, there was a direct flight from my not to. Las Vegas, there is a you know, every little PO'd on airport had a flight to Las Vegas, and wherever your model is, you can bring that model in on a direct flight into Las Vegas. That's a lot cheaper than if you flew that model to Los Angeles or San Diego or even Miami. Because of all the casino and tourist traffic. So you're there. You're here. Costs of bringing models in is actually quite a bit lower in Las Vegas. And then the attitude towards adult entertainment, not just legally, but the business attitude, you know, going with a realtor to look at office space.
[00:15:55] Usually you want to avoid that question of what do you do. Yeah. And, you know, tell the realtor that, you know, you're an adult entertainment company because sometimes that that is met with. Well, we don't want you here. Yeah. In Las Vegas, you tell your realtor you're an adult entertainment company and they ask you if you want studio space as well.
[00:16:18] They do not care that you're an adult entertainment company.
[00:16:22] And in fact, they're willing, ready and able to help you build your business. So. You know, there's a that that anything goes in Las Vegas as long as you're paying the bill. You know, that had that attitude is unique and you don't find that in a lot of cities.
[00:16:43] Sure. Sure. And of course, you get the condom laws, too.
[00:16:47] Yes. There are very few laws in Nevada.
[00:16:54] Period. Period. You know, you can you can buy. You can buy marijuana 24 hours a day at a dispensary in Las Vegas. As long as you can fog a mirror and you get an I.D. that says you're 21. Yeah.
[00:17:09] Oh, God. Those dispensaries are everywhere now going to Vegas this time because it had been years since I had been out there, you know, living out. Neysa hadn't really had any purpose to go until I came out for the shows this year and I was just blown away. These places are massive.
[00:17:29] Yes. And there's some that are just to earn entertainment, just going to the dispensary. You know, they've made it an event. As you know, your whole experience in Las Vegas is entertainment.
[00:17:45] Rypple flight, therefore, to do things that they wouldn't do at home and going to the mat, three of them. So it's a it's an experience, right? You know, I remember standing in line at a dispensary and behind me was this group of women there?
[00:18:02] Probably they were all in their 70s and they were giggling and, you know, they were talking about how they'd never tried marijuana before.
[00:18:10] You're probably giggling because they were high.
[00:18:14] They weren't high yet, but they were from Kentucky. So they kind of had that little Southern little drawl twang to them.
[00:18:21] And it was so cute seeing these old women that were about to try marijuana for the first time and how excited they were until they told Mitch McConnell about that. I hope they do or I hope they did. But as you know, I I love single women. There are no longer no longer afraid to do what they want to do. They learn and just live the way they want to live and have a good time.
[00:18:53] There you go. So how can an adult business. And we've heard a lot about this in the media. How can an adult business qualify for PPE in the United States?
[00:19:06] Well, actually, it's easier to say that there is no reason that disqualifies them. There is no exclusion to adult entertainment businesses. There is there is an exclusion for businesses that are obscene. But God. But how? Gasp But adult entertainment is not obscene. And legally, the definition of obscene is appealing to the prurient interest. It's it's it's not regular, mainstream, adult entertainment, but obscene.
[00:19:43] The things that usually have to get to the level of SCAP before you get to obscenity in the in the prosecutions against obscenity back in the.
[00:19:56] What do we call the mid 2000s, the aughts, Cheryl. Sure. Why not.
[00:20:06] And the odds on and the Department of Justice brought an obscenity charge against actually an Arizona company for obscenity and.
[00:20:20] Some of the DVD that they were that they were claiming were were part of this obscenity suit were ones that you could buy in the airport and they were to end in the airport. Well, you could buy just about anywhere. But one thing, it was really funny about that. It's not funny if you're a defendant. But that. Through bankruptcy. There was a adult bookstore that had gone bankrupt. And it was being it was owned and operated by a trustee. So it's being owned and operated by a U.S. bankruptcy court. Was being run by the government and they were selling the same DVD that. Oh, that's funny that the Department of Justice was prosecuting a distributor for so. But what was ABSs? What was obscene? The only thing that they found obscene is scat. Usually typical fucking not is not obscene. So most adult companies are not dealing obscenity.
[00:21:34] So they're not precluded from applying for the payroll protection program. They're qualified.
[00:21:40] Bottom line is, they're not doing anything illegal.
[00:21:43] Right. And we've seen in tax credits like, say, for Georgia, for example, has tax credits if you film movies in Georgia, but they exclude anyone who is subject to 18 USC two to five seven.
[00:22:02] So if you have to file two to five seven or if you maintain two, two, five, seven records, then you're not qualified for the Georgia tax credit and most state tax. Most state tax credits are like that, but the PPE does not have that exclusion. And that that is a way that they could have excluded adult businesses, but they did not.
[00:22:24] I'm kind of surprised that hasn't been challenged in some of the states, whereas there have.
[00:22:31] There are two cases I know of, and both of them, both of them ruled in favor of the adult entertainment company. Good one was this one was a strip club in Wisconsin. I heard about that. So the adult entertainment companies are qualified and there have already been court decisions that have said so.
[00:22:56] So it may be a little late to get into the TPP right now, but there's no reason to not apply. You know, it does require you have to have you have to have some documentation and you have to provide. You have to provide your tax returns, which they already have. But you need to show that you had certain you know, he had so much payroll expense, so much interest expense. And it's actually quite a simple. It's a simple procedure to file.
[00:23:35] One of my buyers, one of my buyers, got some. Yeah, yeah, I think so. You got to reconcile it, actually.
[00:23:42] Oh, wow. Well, good for him. Yeah. I think the hardest thing is just getting the records together. If you've got a good accountant and have all your stuff in order, it is fairly simple to apply, qualify and get the money. OK.
[00:23:56] So right now, obviously trade shows with the whole virus situation have got virtual businesses. Most certainly changed. For one thing, nobody's shooting.
[00:24:07] How is this affecting your business and do you feel the industry as a whole?
[00:24:15] Well, my business I've I've got a small collection of clients I work with. So it hasn't it hasn't had a real negative effect on me at this point. But I think but I think going forward, it certainly would if those you know, if those events if you know, if it's another year and a half or so before we get to go to those. And I think even then there will be fewer people attending them because, you know, they found out they didn't need to attend them and still got, you know, 50 percent of what they wanted to do done. So it changes the economics of going to trade shows feature figured out how to how to get most of the benefit of a trade show out of virtual experience. But, boy, there is there is nothing like actually meeting someone in person and either, you know, to to get to know them and to build trust.
[00:25:18] And, you know, back to the industry being a small town. This is how you get to know the people you work with as you meet them face to face. Yes.
[00:25:27] And there is no way that you can mingle and in a in a chat room the same way you can at a mixer club. When you're at a trade show, you just don't get you don't get introduced to people. You don't you don't meet new people. It's you. You can't do a virtual trade show and expect to get. Not a lot of new contacts or new customers, new clients, new new whatever, whatever you're looking for it. It's hard to do that online. Yeah. Understood. How about the industry as a whole? From what I understand, the membership based programs have seen a pretty healthy bump up in revenue. Yeah. But at the same time, they're struggling to figure out how to film because they can't get shoots in, you know, talent testing.
[00:26:27] I think I think talent testing now in the in L.A., Las Vegas, Miami is testing for Covid.
[00:26:36] But I'm sad that. Don't hold me to that, but I understand.
[00:26:42] I understand. I understand. They are.
[00:26:44] Yeah. But, you know, just being able to test and get your models cleared, that's an issue you're getting. And if you're if you have to fly models getting a model on an airplane instead of having 25 flights a day to a city, there's one. So trying to schedule trying to schedule models. There's got to be got to be extremely hard right now.
[00:27:11] Sure. So the money's out there because the customers are all online and at home and nothing to do.
[00:27:20] But my question mark, here's a question for you. Hand it gets kind of kind of rhetorical with all these people out of work.
[00:27:32] Don't you think that that could be short lived?
[00:27:36] Yes, I do. I think, you know, people that are out of work, maybe these, you know, that they've gotten they've gotten their stimulus check or or haven't been let go yet. Right. They they may be, you know, one or two months that they're going to be paying for a membership.
[00:27:59] But if their unemployment last much longer there, you know that they wouldn't renew.
[00:28:05] So I I think, you know, there might be there might there should be a fall off. And usually we see a fall off about this time of year anyway. Yes. College students go go back home and start going outside more.
[00:28:22] Well, it might not be the case as much this year. It may not. Yeah. So it's been good. So that could be good.
[00:28:31] And, you know, it's a crapshoot. We really don't know how things will affect our business or or any other. You know, it's it you would expect, I would say prepare for a downturn. And if you don't have a downturn, great. But if you're prepared for it, at least it won't kick in ass.
[00:28:56] Yeah, a saver. Save your nickels. So. So speaking of trade shows, you and I have both been to quite a few, including some together. Talk to me about some memories you have about all those shows, what you can remember anyway.
[00:29:14] Because it used to. Well, you know, I actually I quit drinking before I before I got into the adult entertainment.
[00:29:24] Oh, I didn't know that. Oh, I didn't know that. OK. OK, well I guess I guess you do remember then. OK. You're the one for the guy. You're the guy. What did I do.
[00:29:34] Well now my first trip to Amsterdam, there's definitely some parts there that that I didn't get. It didn't get recorded here. But I got to remember my first time and I think it was at a Marriott or the Marriott. And right across the street was an old church that had been it was no longer a church, was now used as the hotels convention space or it was. And in the trade show was there. And of course, we didn't get invited back to that one because, you know, we used and abused the church.
[00:30:13] But you were there was there was a kind of playboy. Yeah. There was a party in there. That was it would have been unholy.
[00:30:26] Had I been a Christian, a brother.
[00:30:33] And I remember the back in 2005, there were a couple of studios that got together. And I think C.S. Bill was USCCB.
[00:30:46] Those definitely part of the sponsorship, but ran the Rocky Horror Picture Show at the theater on in downtown Tempe. And I'd I'd been to Rocky Horror, but had never dressed up before. And there was gonna be a three hundred dollar prize for the costume contest.
[00:31:08] I decided I was gonna win it. So I actually spent over three hundred dollars on the costume. I'm sure he's a good you know, I got a wig. I had the wig styled. I got a makeup artist. I had a friend that had been part of a Rocky Horror show production for many years. So he knew every little detail that I needed about the costume, but that I think I nailed it. But I think the only time I have dressed in drag.
[00:31:47] I was going to say I was gonna say that was probably a primarily gay event.
[00:31:58] Little is it? It was hell again.
[00:32:00] Let's take the show the night the show that I remember a Phoenix forum man. God, I miss it. I think they picked up. I think they picked a good couple of years to lay off.
[00:32:14] But a good year to lay off because it would have probably ended up being canceled.
[00:32:20] Maybe next year they'll be able to bring it back. That's my hope. But I remember when they had the heart attack grill. Did you go to that to get better?
[00:32:30] I did not go to that one.
[00:32:32] Yeah, everybody went to dinner at that. A bunch. Probably 30 of us went to dinner at the Heart Attack Grill. You ever been to that place?
[00:32:40] I have not. It's it's not what I eat right at my time.
[00:32:43] That's right. You're a vegetarian. I forgot. Oh, my God. It's gone now, but. Oh, Lord.
[00:32:51] That was a good time. A really big time. Couple of their regulars were in their. And the the the afternoon parties at Hooters, they're all downtown.
[00:33:07] Yes, that sadly one one girl fell from the balcony of one of those parties.
[00:33:14] Yeah, that was that was tragic, wasn't there? Fortunate. It's flooding with his wife, my wife's favorite food in the world. Or Hooters wings. If you look at her, she had a little Thai girl. And it's like.
[00:33:29] It's like it's like really wings at Hooters. I swear to you, when they'd have Hooters happy hour, she would be the first one there would wait for me.
[00:33:42] She would just be to would just be there eating wings. That was pretty hilarious. So business has now gone virtual as well as the shows.
[00:33:50] And how are you doing using Zoom and other forms of online conferencing with your business?
[00:33:59] Most of what I do is written anyway, so it hasn't changed the way I work very much. You know, I've I've worked out of my house for most last 15 years. So this hasn't changed my business very much. Other than I don't leave the house hardly at all. I think that that has that has been strange. Yeah. When I was working on my master's thesis, I think I spent three weeks without going out of the house. But now it's now it now not leaving the house.
[00:34:41] It is just endless.
[00:34:43] It's scary in the States. Man, I got to tell you, fortunately, Thailand is all but eradicated the thing. But God, I couldn't imagine being in the States right now. I'm glad we got out. All we did.
[00:34:57] Yeah, you are. I think Thailand has definitely gotten it. They definitely have it under control. They've earned at least figure out what to do.
[00:35:06] Yeah, well, it's called it's called good governance. It's what it's called. It's called having it's called having a former former military man as the leader of the country.
[00:35:18] Well. And testing and tracing, you know, and thinking and and having having the goal of preventing the spread as their primary goal, you know. You know, if the United States had adopted no strict testing and tracing protocols back in February, probably could have. I know that at that time when there were not many cases, it could have been brought under control. But, yeah, they forgot.
[00:35:46] They've got you walk into any mall now in the States and you have to scan a barcode and you walk into a store on the mall. You've got to scan barcode.
[00:35:59] And then you also are supposed to scan it when you leave the store. Sometimes I do. Sometimes I don't.
[00:36:05] And if somebody gets sick, you'll hear from them how hard to do.
[00:36:12] It's hard to do in America. I understand.
[00:36:14] But so sometimes a little less liberty will keep you alive.
[00:36:21] Yeah. And it's not that. It's there. There are simple there were simple ways to do to reduce the spread. But I think now at the numbers we've got would know a lot are no longer as effective. You're right. You're right. You know, Saddam testing, tracing, wearing a mask all the time. And I went into Target over. Over the weekend and half the people in there were not wearing masks at all.
[00:36:50] Well, welcome to Arizona, my friend.
[00:36:54] Yeah, and it's just silly. It's crazy.
[00:36:57] Did you see some of the did you see some of the some of the video off the new shows in American Missouri and Florida?
[00:37:11] Yeah. Look like spring break all over again.
[00:37:13] Lovely, isn't it? And the cases will be melting like you won't believe. So.
[00:37:20] Yeah. You know, in just two months, it really just two months because there weren't a lot of deaths. By the end of March. But you take April and May and two months. There's one hundred thousand people dead in the United States. That's you know, that's not only enormous, but the spread was so rapid. Right. Right. And go. Well, there's still three hundred and twenty million people that haven't been exposed.
[00:37:53] Fantastic. OK, so private.
[00:37:59] Let's let's jump back into it. Privacy laws have become a huge focal point. There are laws in both the EU and also California. Now, how does that impact our industry? And do you see more of these laws being passed?
[00:38:14] Let's start at the last question there. Do I think more are going to be passed? Absolutely. And I think there are there are good reasons for them. There are good reasons for the privacy laws to exist because the information that we're giving out is valuable. It's that that information belongs to the belongs to people. It's theirs. And companies are using it.
[00:38:45] And a lot of times using it against you, really against it. Any way that you would want your information used, your information is being used against you. Yes. And you have no rights to it. You don't. And if you're not told when you know when information is being collected, you're not being told how it's being used.
[00:39:05] Those you know, those are reasons to have laws to require, you know, require notification, say we are going to collect this information from you and get your permission and, you know, make it understood that that information is the customers. It's like, you know, it's it's like your bank account. Right. It's valuable and it should be. And if it's like a, you know, like money in the bank, you expect the bank to protect it and take care of it, not just use it all.
[00:39:34] And yeah, well, they won't. It's not a problem until they get hacked. Right.
[00:39:40] Right. But and if they get hacked, unless there's a law, they're not required to tell you. And know that's something you would want to know, because if you're if your information has been hacked, you can take measures to protect yourself.
[00:39:55] So there's the California privacy law. And the GDP in the EU, I think are just the beginning, I think. I don't think we're going to see laws a lot more extensive than what the GDP is. But I think they're going to be a lot more that are modeled after it or and very similar.
[00:40:19] Well, don't you see the US Congress passing something for the whole country?
[00:40:24] I don't see the US Congress passing it just because they can't they they just don't have the capacity or the moral courage right now to do it. They know they. Right now, the U.S. Congress cannot find its ass with both hands.
[00:40:38] Well, let's see. Let's just let's see if there's a there's a Democratic Senate come January. Then maybe it will be a different story.
[00:40:49] Yes. But, you know, there are privacy laws in Canada, Australia, Japan.
[00:40:55] And I think more more laws will they will they will start to be they'll start to see similarities in them so that when you when you if you're compliant with a G, EU, GDP or whatever, that should be compliant with your other laws. So there's a model. Right. And GDP is really extensive.
[00:41:16] But and being incredibly fucking long, it it's actually if you if you get into it, it does, it does make sense and it doesn't result in any absurd results or doesn't have really absurd results. Surf.
[00:41:38] Of course. Of course. Of course.
[00:41:40] Only when we first heard about it, everybody freaked out.
[00:41:42] But you know, I, I actually got a I, I studied on it and got I got in the European privacy law certification. So I thought, you know, I, I can I can talk to it. And I was at a trade show over in the EU speaking to a U.S. lawyer who happened to be over there and asked him what his opinion was of the GDP.
[00:42:09] He said, what's that? Now, this was at five o'clock in the afternoon before the before the the dinners the first night. He said, what's that? In my room. My question, the next fuckin morning he was giving a client advice in the in the breakfast breakfast, he was telling a client giving that client legal advice on GDP.
[00:42:38] And this frustrated. It still frustrates.
[00:42:41] And he didn't know and he didn't know what it was, you know, 12 hours before.
[00:42:45] He did not know what that law was. Well, it wasn't a rabbit morning.
[00:42:50] That thing is thousands of pages long. Maybe it's a speed through.
[00:42:55] It it took four years. It took four years to pass through the EU Parliament. It is comprehensive and you know that I would I wouldn't feel comfortable giving extensive advice on GDP. Even after getting certified in the interest it is, you know, in order to to know how to comply with that, you have to get dive down into the specifics of each business, you know?
[00:43:29] You start with three techniques. The data map. They help you with your online use the data map. What data is being collected? At what point and where is it being stored and where is it being transferred to? Who sees it? You know, you need to know.
[00:43:49] You need to know where data is coming and going in that business before you can before you can start working on complying with GDP. And I actually think that if you can understand your data map, you can easily comply with GDP. OK. But you need to have to have someone that knows what they're looking at. And you need a good coder who also who who can. You need a policy person and a code person, computer code person to work together to to build a GDP or a compliant website.
[00:44:26] But if you build a GDP or a complaint Web site, you are ninety five percent of the way to California compliant. Sure, sure.
[00:44:34] And you are your compliant with Canada, Australia, Japan. You can easily become compliant with all these privacy laws just by focusing on becoming compliant with GDP or were an alternative.
[00:44:50] Start with the California CCP that, you know, start their focus on that one. And work with your programmers. And you can build a compliant you can bring your website into compliance because GDP is specifically boy, the penalties are huge. I know.
[00:45:14] You know, it's up to four percent of your annual revenue. Your annual global revenue. Doesn't matter if you've got you know, if it's your let's say you've got a Canadian company that violated GDP. But the Canadian company is a subsidiary of Globe Dumb. You a bigger company. They take they can take four percent of your total revenues.
[00:45:44] And I would expect have you heard of any cases where they've actually done that?
[00:45:51] Not an adult, but they just started sister enforcement actions that were published right before Corona. And I. I don't think there has been any. Not that I know of in enforcement since January. But I would I would be very surprised if the EU enforced the individual country enforcement arms didn't look at that as a revenue source. Oh, don't we all need it now? Exactly. And and who and who is the, you know, raising taxes?
[00:46:31] It is is politically not expedient. Sure. But enforcing privacy law that's supposed to protect. You know what? That sounds like a revenue source that you're not going to get a lot of complaints from constituents.
[00:46:47] Oh, absolutely. Absolutely. They're protecting us. They're protecting us. That's what the that's what they like. So it's for that. So for the longest time, two two five seven was all anyone talked about.
[00:47:00] And I know there been some legal victories for the industry. Is it still a thing?
[00:47:05] No. And I don't think it ever really was. It was you know, it was a it was a it consumed a lot of oxygen in the adult industry, but there were only a half a dozen or maybe a dozen inspections.
[00:47:23] And a shout out X is one of their L.A. trade show. They actually brought in the special agent from the FBI who headed one of the inspection team. Oh, wow. You know what he gave? He gave a nice presentation. He talked about what they would do. It said, you know, if we if we come to your door and there's a note on the door that says going to be back in three weeks, he said, you know, it will come in three weeks.
[00:47:53] He said, you know, if you if your information, your your your address and stuff is is out of date. And we go to this old address, he said, we're the FBI. We know how to find, you know. So he was saying, don't don't sweat those little details. And sir, you know, again, there was another attorney that was telling was actually said at one of the seminars that if you had if you had a model release in your two, two, five, seven documents, you could go to jail, which was.
[00:48:35] I mean, he's fun. Even before talking to with the FBI agent, that was horseshit. That was a very narrow reading of the law and could only happen in some fantasy land or a law school exam. Yeah, but, you know, you could actually be prosecuted and go to jail if you had a model released in the same envelope as a two two five seven document. It was just it was absurd. So what he was telling it was but he's like, here I am, attorney at law, telling you you can go to jail.
[00:49:09] And that drives clients to attorneys telling, getting them a full request.
[00:49:15] And aside from that guy. I'm sure you'll answer diplomatically. Being an attorney, although I know knowing knowing Chad, it probably won't be that diplomatic.
[00:49:28] How much of that kind of and I don't like to use the word malpractice, but it's about the only word I can think of. How much of that do you see out there?
[00:49:40] Not so much lately, but two two five seven there. And actually, there are only a couple attorneys that were selling that fear.
[00:49:51] Oh, I know. I know. I a guy I'm aware of one guy.
[00:49:57] But there was they were they were making it into a bigger boogie man than it was. And yes.
[00:50:05] Yes, I was somewhere making it into a business.
[00:50:08] Yes. And it you know, it wasn't a law that was it was intended or at least in practice, couldn't be used as a primary offense. It wouldn't be something that the FBI would say, you know what, we need to go get this company because they're not keeping two two, five seven records, the two two five seven law. It was kind of an ancillary thing that they would tack on if you were doing something else.
[00:50:33] Ok. You know what it was, you know, when I was prosecuting because I was the county attorney for four years. Great fun. But I a lot of bad people to prison. And I and I did not prosecute a lot of people that did not deserve it, because when the police did not do their job, I didn't I didn't do it for them and try cop a plea deal.
[00:50:57] But, you know, if you got a drunk driving charge, they would always tack on this speeding and maybe a stop sign violation. And then, you know, because I really wanted that drunk driving charge, it dropped the speeding up the stop sign. But that's what two two five seven was. It was basically it's just type of speeding violation. That was never the reason someone got in trouble. Yeah, it was. We're already in trouble. They would add that on. I mean, there were very few cases that actually had two, two, five, seven charges. And most of them were engaged in, you know, something super illegal like child pornography or or human trafficking.
[00:51:33] You know, they're the ones that weren't keeping records because everyone that shoots every respectable adult entertainment company, you know, make sure that they've got models who are at least 18 years of old age. Yes. And, you know, they're definitely the the bad apples that, you know, didn't didn't want to comply with that simple rule. But those were the exceptions.
[00:52:00] Those are the people we want out of the business anyways.
[00:52:03] Yeah. And, you know, two two five seven didn't do anything to prevent the didn't. Didn't really do anything to prevent the same bad acts that were already taking place.
[00:52:17] You know, people that were filming underage, they were doing it with or without two to five seven.
[00:52:24] And the Tracy Law and Traci Lords, who is the whole reason that law was passed.
[00:52:30] And she was, I think, 16 or 17 when she first started filming and did a hundred and some movies before she was 18. But she had a valid California driver's license with her name and picture on it.
[00:52:47] So two two five seven would not have prevented her from performing because she had that California I.D. that said she was 18 years old.
[00:52:55] It's oh, it's like she was 18. OK. Yeah, interesting. So basically, basically, she lied about her age to the DMV.
[00:53:05] Dad, I don't know how she had that I.D., but she had an I.D. that, you know, that had two two five seven, had it been in place at the time, would not have prevented her from performing under age.
[00:53:20] So it was a law chasing a problem and it didn't fix the problem.
[00:53:24] Interesting. Interesting. Like everything else, since it's a big news story and that's how these things end up getting passed. Speaking of which, foster sister. I know your opinion on it is a bit different than some attorneys I've spoken with.
[00:53:39] Why don't you tell us your view and who should worry about this?
[00:53:46] I think foster cesta is also overblown. Very similar to weigh the fear about two two five seven was OK.
[00:53:56] Most most businesses do not have any issue in complying with fines to cesta.
[00:54:06] Well, it's just a question about that. I mean, basically every escort site has either closed down or gone underground or gone offshore.
[00:54:18] In fact, I know of one site that was an escort site and they were making a lot of money.
[00:54:27] Like second, they were doing like six million dollars a year in business. They employed over a hundred people.
[00:54:33] And the day fast assess the past, they flipped the switch off. So and he was he was complying with with everything.
[00:54:46] And each each circumstance, it it's it's so specific to your tears.
[00:54:54] I can't because I can't speak to that situation, but try it because each one is specific more than I think foster system needs individual attention. More than two to five seven did. I think two two five seven was pretty easy to be compliant and never have and be able to sleep at night.
[00:55:13] Foster says they definitely need to make sure that, you know, make sure you know who you're dealing with and you may or you need it in terms of the people who advertise, it means that, yeah, the people that are advertising that, the escorts on there and, you know, who's who's using who is using the platform, but to kind of shut down a business with that many people on it, that that seems to be a huge overreaction in there. I think I can't help but think that.
[00:55:53] That if if they were doing everything else right. If they were paying all their taxes in the right places. If they weren't if they if they were not. Well, there weren't any illegal immigrants that were advertising the things that would really piss law enforcement off. Yeah. I would think that there is that they could find a way to operate a service that that matches customers and escorts.
[00:56:30] Well, I mean I mean, from talking to this guy, he not only told me he did everything right, including verifying the Mott visa, the entertainers, but he also said that he he cooperated with law enforcement in many cases.
[00:56:48] Huh. Now it's on us.
[00:56:53] It's a sad result because that's I think that's not what the law was intended to do. And the result was that the escort's going to much more dangerous ways to meet customers.
[00:57:07] Yes. Yes, exactly that. And that's that's the sad part about it, because, let's face it, prostitution is going to happen, OK?
[00:57:15] Yes. It's not going away. It's just quote unquote, oldest profession.
[00:57:23] And by it, by driving it underground, by driving it onto the streets.
[00:57:30] Yeah, you're making the customers less safe. And you're and you're mainly really making the entertainers less safe. But OK, so so today. So today, let's say I open an escort site.
[00:57:42] I verify all the all the escorts.
[00:57:47] I see that they're of age. And I open it up. Right. Main Street. United States of America. Am I doing anything illegal? Am I'm going to get prosecuted for it.
[00:58:01] Huh. You shouldn't be. You know, you want to make it. If if the advertisers are not advertising sex for money, that's that's something you're going to have to police. And.
[00:58:19] Well, that's a what part? Well, well, what do you mean by that? I mean, obviously they are OK. But what if they don't say it verbatim? Then again, is that illegal?
[00:58:33] Well, I think I guess the best way to to put this is to tell you. You need you as the escort site owner, you need to give me as your attorney.
[00:58:48] Enough, enough, enough to work with so that I can make a plausible argument that you are not selling sex for money. You have to give me enough there that I can make that argument believable. Yes. And if you can do that, I think that's when you can you can maintain this insight that, you know, similar to what the escort sites were. Right. And connect and connect those workers with their customers.
[00:59:20] Well, we don't. Why? We know why Backpage went down there. There was there was a lot of other things behind it. Anyone who hasn't read the articles can go, can Google it and see all the laws they they broke.
[00:59:35] I think that's that's probably the primary reason that most escort sites closed is because what happened to Backpage that you've got back page as an example and said this could happen to you, but you don't. If you weren't fucking around with all the other shit Backpage people were doing, then. No, it's not going to happen to you.
[00:59:55] You know, money laundering can be money laundering and other things that the site was doing, like moderating it.
[01:00:04] And, you know, when people were advertising underage girls and taking that part out. And, yeah, I think that's I think that's kind of bad.
[01:00:13] So so what other legal issues are affecting our industry right now?
[01:00:21] I think those are the big ones. We don't see we don't see obscenity. Please, I'm not aware of obscenity prosecutions anymore. I think the biggest the biggest issue you have to deal with legally isn't isn't complying with the laws.
[01:00:38] It's complying with what Visa and MasterCard require you to do. Yes.
[01:00:42] Because, you know, they they aren't lawmakers, but they're rule makers. They make the rules if you want to use their system. Right. And whatever rule they decide, that's what you have to live with.
[01:00:53] And if you can't process Visa, MasterCard online, you know, you've cut off huge revenues or potential revenue stream.
[01:01:03] I have a you're out of business, basically. Yep. Yep. It's MasterCard and Visa.
[01:01:08] They have you by the balls. You have to comply with what they what they ask. And that that is, I think, truly, truly the focus should be, number one, comply with Visa, MasterCard. Number two, comply with GDP or. Yep. You get those two down. You really don't have to worry about any other jurisdiction because you are ninety five percent of the way there for everything just by getting those two down.
[01:01:38] All right. Well, hey, Chad. It's been it's been a blast. As always, it's talking to you. I'd like to thank you very much for being an adult. So abrupt broker talk today. I hope to get you back on for a future show.
[01:01:51] Oh, yeah. We haven't even talked about incorporation. All right. To do it. So let's sing that for a next one. Sounds good, man. Take care. All right. Bye bye.
[01:02:03] My broker tip today is part one on how to buy a site. The first question to ask yourself is what kind of site would you like to buy? Would you like a tube site, a camp site, a dating site, a membership site, a social media site or something else? If you want to buy a membership site, what type of site do you want and what niche? There are literally hundreds of Nicias and many sub nations. For instance, let's say you want to buy a gay site under gay. There is bare's or mature bareback Asian, Latino, amateur by black euro and fetish along with many fetishes. Under that classification, plus there's hardcore jox porn stars, solo trans twinks and uniforms straight has even more sub nations. How you make this decision should be based on these factors. What interests you, what you enjoy should definitely play a part in what you buy. If you like men and want to make money on a straight site, that's probably a really bad idea, assuming you're a guy. Same thing if you're straight and want to buy a gay site. So what you like plays a part. What is your budget? This is something you need to establish at the very beginning. Not only do you need to know what it is you're working with, but some classifications of sites are more expensive than others. For instance, if you want to buy a campsite with any traffic or revenue at all, you will need a lot of money. In fact, by any established site will be somewhat expensive. If you buy a site that's pretty much just a platform without traffic or sales. You will need a huge investment to build it up. In that case, it might actually be as good or better just to start your own site. That way you get exactly what it is you're looking for. We'll talk about this subject more next week. And next week we'll be talking to Alex Lacoste of Seven Veils.
[01:03:58] And that's it for this week's Adult Site Broker Talk. I'd once again like to thank my guest, Chad Anderson. Talk to you again next week on Adult Site Broker Talk. I'm Bruce Friedman.