The Financial Times, one of the world's leading financial newspapers founded in 1884, the goto newspaper for businessmen around the world. So why would the Financial Times produce an 8 part podcast into the world's porn industry? Hot Money looks at the growth of the porn industry from the late 90's up until today, through the tech changes that brought us the rise of the tube sites up until the creator economy powered by only Fans.
Reporter Patricia Nilsson started digging into the porn industry, she made a shocking discovery: Nobody knew who controlled the biggest porn company in the world. Now, Nilsson and her editor, Alex Barker, have figured out who the guy was, and much more. Their reporting reveals a shadowy power structure that includes billionaires, tech geniuses and the most powerful finance companies in the world. Hot Money looks behind the scenes and explains how the industry is controlled by the financial networks which provide the billing for the millions of websites around the world.
The germ of the idea for the show originated from a scoop in 2020 from the FT journalist Patricia Nilsson. Now, Hot Money reached No. 3 on the Apple Podcasts Business chart and was No. 1 on podcast streaming platform Pocket Casts for more than two weeks, according to FT head of podcast Cheryl Brumley.
“Alex Barker and Patricia Nilsson investigated an industry that most people have interacted with at some point in their lifetime, but talk little about,” Brumley told Adweek. “That’s why Hot Money has captivated so many listeners and is charting so well even in its fifth week.”
So we thought we would dive into the 8 episode show and let our readers know what it has to say. And if its worth a listen or not.
In episode one Hot Money interviews Stoya a porn star who saw first hand how the rise of the free porn online transformed the adult industry. Before tube sites people had to pay for porn, shock horror. Sites consisted of a free preview and then you had to sign up for a subscription to view the contents, often on a slow dial up connection.
The reporters return to examine the birth of the porn hub, which began with a computer programmer named Fabian Thylmann, in episode two called The Darth Vader of Porn.
In the city of Dortmund, Thylmann was born. When he was 17 years old, he began programming computers. In the late 1990s, he created software called NATS (Next-generation Affiliate Tracking Software), which allowed website operators to monitor users' clicks on advertisements and links in order to be paid commission. Thylmann purchased various pornographic businesses with the money he made from NATS, and Manwin was formed by acquiring the firms Mensef and Interhub/manwin in March 2010.
Fabian accomplished what he did in a number of ways. In an industry that was short on money, he was remarkable with money. He gained backing from Wall Street to pursue his plan to take over the business. Borrowing hundreds of millions of dollars. Thylmann stepped down in October 2013, and Manwin was sold for $73 million to an undisclosed buyer with issues with the police.
Step up Mr. Goldman, Mr. Sex when Fabian Thylmann hit the ropes, a former Goldman Sachs banker swooped in to buy his porn sites. But nobody knew who he was. He managed to keep his identity a secret for years – until Patricia rumbled his game.
The initial rumour was that Fabian had sold the company to the management but after investigating it the journalist were about to find the owner was Bernd Bergmair . In December 2020, the Financial Times published a report on MindGeek's ownership, revealing that Bergmair or "Bernard Bergemar" as he had used in court documents was the company's majority owner. The Financial Times report prompted a parliamentary inquiry into Pornhub's practices in Canada, in which MindGeek directors and minority owners David Tassillo and Feras Antoon named a "Bernard Bergemar" as the principal owner. He owned more than half of the shares, but was a passive investor and not involved in the day-to-day business.
Hunt for the porn king, the secret owner of pornhub.
Bernd had been associated with the site Red Tube which Wired reported that Redtube.com was one of the 5 fastest growing websites in December 2007. It had been founded by a couple of young Austrian programmers from their bedrooms but then as it grew was bought by Bernd but whilst Bernd was the financial guru behind Red Tube. The day to day was run by an ex English DJ Allan Lake
Episode 4 entitled Playboy V Rusty amd Eddie goes back into the 90's and explains how the porn tube sites are able to host content through the case of Russell and Edwina Hardenburgh who ran the “Friendliest BBS in the World.” Callers to the Ohio couple's bulletin board system could post and download freeware or shareware programs, communicate with its 14,000 other members, and peruse downloadable nudes, all for $89 per year. Being the “friendliest BBS in the world” would end with FBI agents hauling dozens of servers out of their basement and a lawsuit from Playboy.
https://www.vice.com/en/article/pkpzw7/rusty-n-edies-bbs-fbi-raid
This case set a precedent for porn and the internet giants facebook and twitter. The fifth episode discusses how porn sites must charge consumers or sell to advertisers on tube sites by using Visa and Mastercard, which is a very intriguing topic. As a result, internet porn's unspoken norms are the unspoken norms of billing companies. In the world of porn, payment is king.
Episode 6 goes into the background of Mindgeeks biggest competitor Xvideos, its corporate name WGCZ based in Prague. Whilst Porn hub and Mindgeek are recognsible names WGCZ remain shrouded in mystery. Hot money investigates and this leads to information on the owners https://www.praguemorning.cz/xvideos-porn-empire-next-door/
Hot money tries to track down Stephane Pacaud
The most powerful man behind the holding company is Stéphane Pacaud. He holds 93 percent of the shares, as can be seen from the annual report for 2019, published in the Czech commercial register. The remaining seven percent belong to a Hong Kong company, according to the report. A more recent annual report is not online, the key data may have changed since then.
Someone does answer the phone in Hong Kong but then hangs up without talking. Hot money explains that Xvideos specialises in content that other companies don't want, and this is because their payment processor won't allow them to. But Xvideos owns its own payment provider giving them much more freedom. Hot money explains that the unwritten rules of VIsa and mastercard because they control the payments ultimately control what companies do. As the series moves into the realm of Only Fans, there is a much stronger connection to Babestation and the Babeshows. Only Fans is a firm that shifted power back to performers by resetting the porn balance and changing the ecosystem. During the pandemic lockdown, only die-hard fans increased, but how did it start?
Hot money delves into the background of Tim Stokely and his family who founded Only fans
https://www.theguardian.com/culture/2021/may/24/essex-family-behind-onlyfans-profit-from-pornography-boom Hot Money interview Babeshow legend Dannii Harwood who became the first star of Only Fans and the first millionaire. She explains how she met Tim when he booked her to do a shoot for his web site customs4u and glam worship after her seeing her on late night television probably the babe show bang babes. Tim and his family had a banking background. Whilst many of his ideas didn't work he hit on a winner with Only Fans. Allowing performers to receive payments directly from their fans. What drove the early take up was a pyramid scheme where models could earn money by introducing other models into only fans. Dannii used her position within the babeshow green room to sign up the top UK babe talent and this helped to get Only fans off the ground.. Danniii advised Only Fans on how to improve the site.
On her own Only fans page Dannii describes herself as the queen of only fans and there is some truth in this title as she was the first million pound only fans model.
https://www.nytimes.com/2019/02/09/style/onlyfans-porn-stars.html
https://www.walesonline.co.uk/news/wales-news/welsh-woman-whos-made-1-17957943
https://www.dailymail.co.uk/news/article-10332569/The-new-Queen-OnlyFans-adult-empire-vows-make-SAFEST-social-media-platform-world.html
Only fans grew quickly after this helping to turn the tide against the free tube sites. Only fans had a very aggressive payout to the models. But as Hot money explains, that was based on the billing account being registered as a social media company. As the amount of adult models on the platform grew this started to cause problems with their payment processor. It was at this time that the stokelys sold out to the owner of "myfreecams" who had a lot of experience in billing.
The site continued to grow and grow and received a big push with the pandemic when bigger and more mainstream stars joined the platform. Beyonce even name dropped only fans ina song But in August 2021 Only fans announced it would be dropping porn from its platform.
https://time.com/6092947/onlyfans-sexual-content-ban/
Performers were stunned and afraid of losing their incomes.
So why did OnlyFans (briefly) decide to ban the kind of content which had come to characterize its platform? So why did OnlyFans (temporarily) ban the types of material that had become synonymous with its platform? Tim Stokely, the site's British creator and CEO, explained it as follows: "The simple explanation is banks." Adult content payments, according to Banks, are being refused by banks. Stokely highlighted BNY Mellon, Metro Bank, and JPMorgan Chase for rejecting intermediary payments, preventing sex workers from accessing their earnings, and imposing fines on companies that support them in an interview with the FT.
But a week later after an uproar from the performers Only fans had to back track.
The company tweeted that it had “secured assurances necessary to support our diverse creator community.” The decision came a day after the CEO attributed the porn ban to banks which would “cite reputation risk and refuse our business.” OnlyFans executives told the FT that Stokely’s comments had sparked open discussion between banks and the company. "Hot Money :visits the world of payments in the season finale, where it explains how Visa and MasterCard became porn's reluctant kings. They also investigate how the pornography industry is affected by becoming controlled by credit card corporations.
The podcast is a fascinating exploration into the porn business, as well as the forces and finances behind it. You can listen to it here:
https://www.ft.com/stream/a067cd68-b8cd-4853-8188-92199619d4a6
