Adult Site Broker Talk Episode 241 with Solomon Friedman of Ethical Capital Partners - Part 2

Oh my, so Bruce, there's no typical week, okay? I don't have typical weeks. So my portfolio, you know, being a partner in the private equity firm and being the VP of Compliance is the following. So I always say I've got indoor responsibilities and outdoor responsibilities. My indoor responsibilities are ensuring that Aylo has the support and the investment that they need to develop a best-in-class trust and safety system. What we do is not cheap, Bruce, to put it in scale. Let me give you some numbers, I like numbers. Aylo is a company that employs about 1,500 worldwide. A full 20% of that workforce works exclusively on trust and safety. Now if you took those numbers and laid them over a Google or a Meta or X, it would be unimaginable that proportion of the workforce. So that is expensive and from the owner side, we're committed to investing in that for a number of reasons. First of all, we don't see it as a cost, we see it as an opportunity. That being a leader in trust and safety is something that we can develop with our own experience and then we think in the future serve the rest of not only the adult internet but the mainstream industry with what we have invested in and what we've learned. That's on the indoor side and it's really doing everything I can to make sure that Aylo is well supported and well invested in when it comes to the work that they're doing.

Then there's the outdoor responsibilities and it's to speak loudly and proudly to anyone who wants to listen about the work that we're doing. And I'll say that to such a granular level, and this may be to you who know the industry, this stuff is obvious to you, but one of the things that I do and I've done more times than I can count is I will walk any journalist who wants to see it through the uploader verification process, the content verification and moderation process from the back end. I actually invite journalists, come play moderator. I want you to sit in the moderator chair and see the back end of the platform. Can you imagine, for example, Meta taking journalists on a tour of their trust and safety system? First of all, you'd have to find the random call center in Kenya where they've outsourced all of this. Just for the record, we do not outsource a single aspect of our moderation program, not one. All of our moderators are full-time employees of Aylo, trained and maintained by Aylo, tested. By the way, it takes about 90 days before you're ever able to moderate live content, and test after test after test where the passing grade, I'm very proud to say, is 100%. So that's not to say 100% pass it, but you must score 100% in order to see live content. So I walk journalists through that, I walk police through that, I walk lawmakers through that. Because at the end of the day, I find this often when you sit down with police who come at this, all they want to do is protect kids, all they want to do is save victims of human trafficking. They know that we are not the problem, they know that our industry is not the problem. The people who speak loudly about this are not police officers, they're not frontline workers. They're advocates who have made this a living and a career. The people who are not trying to sell books or go on media junkets and are actually doing the real work, they know that we, and I say we, I mean not just Aylo but the industry, we're an ally in fighting exploitation. We take it so seriously. And the other side of my work is communicating that. It's something I believe in. I wouldn't do this work if I didn't. That was obvious to me the more I learned about it before we made this acquisition, was how much I believed in the work that not just the company's doing but the industry. I really adore this industry, I do. And I think that it's made up of people who are trying to accomplish something positive, who some people are just trying to live their own life and explore and express themselves but are very conscious about not doing harm. And I'm really proud to be part of that. So I speak very proudly about that to media, to government, to law enforcement, to academics, obviously supported by the rest of the team and by our advisory board, in an effort to be a presence here and to combat so much of that myth and misinformation that has been pervasive for a very, very long time.

Well, you know, it's funny because I look back at my career and my life and I always say, never in a million years would I have expected to be here. And I think people around me would say the same thing. It was really very simple, in many ways a very simple journey, and it was about going into this with an open mind. So originally I was brought in in a previous attempt to acquire. As you can imagine, the company was on the market for some time and there were many attempts to acquire it. And I was really brought in for my legal expertise to do a review, to do some due diligence, and basically answer a simple question, which is: is this company complying with the law? And that's something I'm very comfortable doing. I've done that for other industries, I've done that for some adult industries, given legal opinions for everything from cannabis to gambling, anything where legal compliance is important and there are complex legal issues. The more I looked at it, the more positively I would say I began to view the work the company was doing, and the more I saw, hey, there's an enormous amount of potential here. So when that transaction fell through, with my partner Fatty Mansour, who's our managing partner and really the one who brought this group together, we said, you know, this is an acquisition that we can make. We have amongst us the abilities that are required here. And it's interesting because in many ways we don't look like traditional private equity. When you look at our backgrounds, you've got two criminal lawyers, a former Chief Superintendent of the RCMP, Canada's federal police, the former Director of Communications for Canada's Liberal Party, a cannabis entrepreneur, a public markets expert. But really it's because this asset in our view needed something different, right? Needed that different experience. But the more we looked under the hood, the more we thought there is something extraordinary here and there's an extraordinary opportunity. Now as you know well, anyone in business knows those great opportunities are not easy. If they were easy, everybody would execute on them. We saw real potential, and I want to underscore this: potential not just in the adult industry, but potential of what we can do if we can destigmatize and we can take many of these assets, software, processes, people, policies, experience, and take it to the mainstream. We saw a real, real value there and that's the plan.

Oh, I absolutely did. I mean, I had misconceptions about everything from who the heck would work at MindGeek to who would be a content creator. And I'm a little ashamed about those views, but I'm a big believer in transparency, so I'll be open about them. I thought I was going to walk into a really sleazy environment and I'd meet people who I would never have crossed paths with otherwise. At MindGeek, nothing could have been farther from the truth. Instead I met a really, really dynamic tech company of people who are trying to do the right thing and cared about doing the right thing. I think had been very much misrepresented publicly and not spoken for. But the same is true with the broader industry that I learned. I had all kinds of misconceptions. Who wants to be a porn star? Who would be in porn? I learned, and once again many of your listeners are going to roll their eyes and they should roll their eyes at me, I deserve it, because that was so naive of me and just mistaken. Because the answer is: who's in porn? Everybody. What do they look like? They look like everybody. And even more than that, I've been really fortunate to meet with a pretty broad spectrum of the industry. And what have I found? I found people who are thoughtful and articulate and sophisticated and educated and passionate and very much well-meaning. One of the things that I've learned, and I'll give kudos to two of my great teachers in this regard, and they're both, I'm very happy to say, members of ECP's advisory board. That was very important for us to put together an advisory board, recognizing that this wasn't going to be the tech bros come in and fix porn and impose our views on others. We really had to learn. So we put together an advisory board, and two of the members that I think have been most key to my education about the industry have been Dr. Val Weber, also the board chair of PASS, noted academic and researcher who themselves have lived experience in the industry besides academic credentials, and Maggie McDonald. Maggie's completing her PhD now at the University of Toronto. I got to know about Maggie because I'm a big researcher. If I was going to get into something, especially something like this, I was going to learn everything I could about it. And I came across her master's thesis about MindGeek. And I'll tell you this, Bruce, it wasn't entirely complimentary. She's not in any way anti-porn, she's very much pro-industry, but she had a lot of very valid critiques about the company. And immediately I thought to myself, that's the kind of person we need on this advisory board.

Yeah, really, really fabulous academic. She spoke on the XBIZ academics panel. She's done some really important research on the nature of platforms and how platforms have changed the porn industry. Really, really superb academic who continues to do really important work on things like financial discrimination. Really important work. But I had an education, and that education also revolved around an understanding of what sex work is and what sex work isn't. And Bruce, I can't be any more basic than this: what sex work is, sex work is work. It's just work. There are people who love their jobs, there are people who don't like their jobs, there are people who have good days at work and bad days at work. When I had an interaction with someone really pushing the trafficking narrative, and they said to me, well, you know, this work, and this is actually the line that was hard for me not to giggle, she says to me, yeah but you know this woman wouldn't be doing it if she wasn't getting paid. What, I don't know, would you be going to your job if you weren't getting paid? I wouldn't be going to my job. I've got volunteer work, but I wouldn't go to my job if I wasn't getting paid. It's such lunacy when you start to unpack it. One of the things I think, the important points to remember is those who want to abolish sex work, and that's an important word, abolish, they call themselves abolitionists. Like what could be more odious than co-opting the movement to end slavery by calling yourself an abolitionist? So what do they want to abolish? They want to abolish people getting paid to do this work. But what are they okay with? They're okay with it for free. Think about that. They have no problem with sex for free, right? In other words, sex on their own terms, sex for a purpose that they have deemed acceptable. But bring a transaction and money into it, all of a sudden their skirts are up in outrage.

And that's one of the reasons why I'm confident in this. I know that we will prevail because we have nothing to hide. We don't need to hide our internet search histories and what we're into. It's those who are really fundamentally hypocritical about it who get exposed time and time again.

From your lips to God's ears, Bruce.

Yeah, and you know, it's not just about me. You will be seeing more of me if folks are interested in that. But it's also about the brands themselves. I've been really, really happy to see Pornhub taking up a very present space. And by the way, not just being there. It's easy to have a fun booth, right, and have models there and have music and have a good time. But what's been really impressive to me about the Pornhub team, and I'll single out two folks, one is an executive, that's Alex Kessi, the Vice President of Brand and Community at Aylo, and S. Gaziani, who lead panels about Pornhub and the platforms and they take really tough questions from that room and they keep coming back and doing it, knowing that the community is key to the platform, that one cannot exist without the other. We want to be part of an ecosystem that benefits the community. And I think we're seeing more and more of them there, XBIZ, XBIZ LA, AVN, JustForUs, and in Europe, that trend is not changing. We must be part of this industry. Everybody here, our tide rises and falls together. And I think that part of our philosophy in this investment was, this is a community that we need to join, right? And that means supporting FSC, supporting Woodhull, but just being physically present. And I heard that from people. Like, Bruce, I don't think of myself as anything special, and hearing from people, like, it was really important for us to see you there.

You did, you did. And I think it was tough for me to really take that in at that time, you know, I had a lot more to learn. And listen, that's a big thing that I've been trying to do. At these shows, if I have a speaking slot, I have a speaking slot, I'm happy to do it of course, but I really am there to listen and sit down with folks. Whether they're the tech players, whether it's on the payment processing side, whether it's on the performer side, on the affiliate side, so many different avenues, the advertiser side. And I'm just there to listen and be accessible, because I know obviously that has not been how it has been in the past. But I think it's a really important part of our mission because, like it or not, when you have a player of our size, the rest of the industry does look to us in terms of, well let's see what Pornhub does about this. And that's a very privileged position to be in, and you can't do that without consultation with the rest of the industry. So I know that from the executive level, from the director level at Aylo, they work very closely with their counterparts and they're in constant communication about shared issues of concern. And our industry, there are so many smart, innovative, hardworking people that we should pull our resources and work together because we have adversaries who are working together day in, day out. We have to do the same in a very positive way.

Oh, 100%. Right, and it's an industry where there's often this kind of insular attitude, right, where we turn inward, which is understandable. But we have strong advocates. You mentioned Allison and Mike. I mean, Mike is so articulate and he always nails it. One of the things that we try to do, and you should know this, and I'll put this offer out to anyone who's listening, one of the things that we always try to do when we get a media request, obviously we'll answer all the questions related to ECP, related to our perspective, but we love to be able to refer the journalist to others, and that is other advocates. We don't want to take up all this space. There are so many qualified people who can speak about this. FSC is obviously top of the list, Woodhull top of the list, but if there are others who are taking on the advocacy roles and are comfortable speaking and are doing a good job doing it, we'll always be happy to send media their way. We know that media wants to write a story that has Pornhub in the title because that means it's going to be one of the most popular articles. And that's fine. We like to make that work for us by being a good presence in that article, but also getting other voices involved. We always want to be able to direct media to other credible voices in the industry because there really are so many.

Yeah, so that's a good question. I think that the fan platform obviously is here to stay. There's definitely benefits to it for creators. There are benefits when it comes to control of content, control of market share, being able to direct traffic there. I see it as occupying a place in an ecosystem. And I've always looked at that. One of the really interesting things about this industry is your competitors are your advertisers and your affiliates, and your affiliates are your advertisers, and your affiliates are your competitors all at the same time. So this is an interlinked ecosystem. So take a look at from the Pornhub side. Pornhub allows out links to any legal fan platform. And Pornhub gets the traffic. No fan platform gets the discovery traffic like Pornhub, right? OnlyFans, it's not a discovery platform, it's not a browsing platform. You go to the creator that you want to see. Pornhub on the other hand surfaces content and I think helps many of those creators develop their own brands. And we're perfectly fine with that, with that share in terms of them monetizing their content on as many other platforms as they want. It's sort of a give and take relationship.

What I'd say is this, and I'll choose my words deliberately, is that the fan platforms, all of them, have to acknowledge what they are, and that is adult platforms. And they need to join the adult fight early.

Really, Bruce? I don't know, I haven't noticed. Um, because, well, I knew who you were talking about. Let's just, yeah, sure. So you know, it's because we are strong when we work together, when we develop policies together, when we communicate with media and with regulators together. Take a look at the Pornhub example. Pornhub could go at it on its own until it couldn't. And what I don't want is I don't want others to make that same mistake. And I mean that generously, there's no edge to that, it's genuine.

Yep, yep, they did. And it's a matter of, we have so many shared interests. And I think also people respect you when you are proud of what you do. Shame only works when you are ashamed. When you're not ashamed, then shame cannot touch you, stigma can't touch you, because you're very proud about it. So that's something I think I would like to see evolve, and I think it will evolve. You go back to the days when OnlyFans said there would be no more adult content on the platform. Well, what about 98% of our revenue? So that went away. But it's also about when you talk about setting a good example and working to set best practices, you got to acknowledge what kind of platform you are and what kind of content you're hosting. So I'd like to see more of that in the future and I suspect we will.

I did, Bruce, I did.

You know what, Bruce, we're a sensible people. We also know what it means to be hounded to the ends of the Earth by those who wish for our destruction. What it means to be demonized. You don't need to go back too far. Go back to 1933 in Germany and Hitler declares that all of the pornographers in Berlin are Jews and it is the Jews who are leading to the degeneracy of the Aryan women. The fascists have always been anti-porn. The anti-porn folks have always been fascists. I say that with confidence. So first of all, I have never ever described myself as a rabbi or a religious authority. I was ordained, I was educated, and that education is an important part of who I am. But really what I take in all of this, if there's any part where my Jewishness gives itself expression, is a very strong Jewish commitment to bettering the world around you. And there's a couple of sources of that. One that's often called tikkun, or bettering the world. There's also an imperative, a biblical imperative, and this is as biblical as I'll get, Bruce, we'll leave the biblical-isms at that: you shall not stand idly by on your brother's blood. And what that means is you shall not allow others to come to harm. When I look at the work that I'm doing, what do I want to see happen? Well, I want an internet industry that is committed to trust and safety, that prioritizes consent, that prioritizes the benefit of that work flowing to the creators, and most importantly, protects the young and the vulnerable, is an ally in combating exploitation. I don't see values that are any more Jewish than that. I don't know how you could get to more Jewish values than that. And it's about being very, very proud of this work. If we accomplish what we want to accomplish, the internet will be the better for it, and I think society will be the better for it. This is something we have a responsibility for when it comes to making our internet spaces safe, just like making our real life spaces safe. So I see no conflict whatsoever, and in fact I'd say I'm inspired on a daily basis by those learnings, that background, that heritage, that tradition to do exactly the kind of work that I'm doing.

We sure do. We sure do. Creative free thinkers who are committed to liberty, just like Hollywood and just like all entertainment.

You know what, what I'd say the first thing is we have continued to roll out the co-performer verification. That is verifying age, ID, consent of all appearing in content and holding that information ourselves. We know that that's something that imposes obligations, right? Imposes burdens, technical complexity, social complexity on the creator community. And we need to continue to communicate with them and work with them to make this process as easy and seamless as possible. We know there's always a trade-off, right? There's a balance that every time a new trust and safety policy or procedure is put in place, there are real people who are affected by it. There are people who had a certain way of doing things and a very legitimate way of doing things who have to readjust. So we need to continue in 2025 being in tune with that community. And I take real guidance from one of the first things that ECP did upon the acquisition, and that is we tasked our advisory board with essentially going on a listening tour. And that was of all stakeholders, from content creators, prioritizing content creators, but on down, law enforcement, regulators, academics. And we actually published it. It's available openly and transparently like all of our work on the ECP website, titled Our What We Heard Report.

And it was important because it set out ways in which we are falling short, in which both the industry more broadly but also our platforms are falling short and that we can improve. And one of them was in prioritizing that integration and communication with the creator community. So I think we've made big strides. In fact, many of the things in that What We Heard Report, I'm so happy, were very quickly implemented by Aylo. In fact, some of them were on track to be implemented in any event. But we have to remember that this is not a faceless or anonymous community. They're real people. Content creators are real people making a living and working hard, and they want to comply with the law and they want to do this right. And you can't just sort of impose mindlessly burden after burden on them, but I think you can do it really mindfully, which is what we're trying to do and what we're going to continue to do. So that's part of it.

The second part that I'm really excited about is taking the products that we have developed on the trust and safety side, and it's now time to start to mainstream them. I have been presenting to law enforcement conferences, specifically those investigators, forensic examiners who work in the combating CSAM space. I'll be doing it again in a couple of weeks, and showing them the software that we have, patented proprietary software to fingerprint content and to identify that content when it's being attempted to be re-uploaded or elsewhere on our platform in a changed form. You should be using this to scan for unlawful content. And we want to work with law enforcement, collaboratively, and have this become the sort of gold standard tool. And the same is true in our content recognition and automated tagging system that we have built. We want that to be used as well to help examiners who are examining seized devices looking for child sex abuse material to recognize and categorize explicit content. This is part of our efforts to work with law enforcement. It's also part of transforming Aylo from an adult entertainment company to an adult entertainment company with a very robust trust and safety arm. And that's part of the development to build out that side of the business. Obviously these things take time, there are steps that need to happen, but I expect to hear good things about that in 2025. And I'd love to come back any year and talk about where we are at that time.

Bruce, you ask a good question. That's a really good question. And I think it's a number of things. And I want to preface it with this: anyone who's listening to this podcast has almost certainly been in the industry longer than I have. I have been here for a blink of an eye in relative terms. So take everything I say with a grain of salt. There are those who have much more experience than I do, have fought battles that I benefit from today. I say that, and so I'm just speaking about my observations, and obviously there are many, many people with more experience than I have.

Yeah, so there is a real hesitance on the part of the industry to speak on its own behalf. Too many people have been burned by what they thought were unscrupulous journalists or unfair journalists. And that's a matter of debate, how unscrupulous or unfair and what the communication was like. But there certainly has been that. People get doxed, people get exposed, people have their personal lives upended. I understand all of that. But we need more people who are willing to speak publicly. Not just to media, media is part of it, but to go and be a human face to this industry. Because it's very easy for this industry to get demonized, right? It's very easy to talk about the pornographers but to not talk about the creators. I'll give you an example of that. When the Canadian hearings were going on in Parliament, the MindGeek hearing, and the owners, CEO and co, were being wrung over the coals and Lila May was being applauded as an expert in anti-trafficking, many groups of sex workers applied to speak at these hearings to have their voice heard. You're going to talk about human trafficking, why don't you talk to some sex workers? And there was a woman who had done significant sex worker advocacy, communications, and speaking to legislative assemblies, named Kate Sinclair, who had worked herself in the adult industry, Canadian creator, director, writer, filmmaker. And she applied to speak. She says, I have lived experience, I know about exploitation and the real trafficking, and I want to talk about what the industry is doing right and what it's doing wrong. Not there to give some gloss on MindGeek, but to give a very informed insider's view. And she was denied the opportunity to speak.

Told, look, you know, we're really not looking for that type of speaker and it's not like you're a lawyer or anything. You know what Kate said? Okay, I'll go to law school. Kate went to law school, and I believe it was when she was in her second year, I was introduced to Kate. We brought her on as an intern, a legal intern with Ethical Capital Partners. And in fact she attended with me and, you know, this is recorded and broadcast, we went before the CRTC, that's the Canadian Radio-television and Telecommunications Commission, to testify about some proposed regulatory changes. And I said, Kate really helped build our submissions, she wrote, to be very honest, 90% of them, did an amazing job. And I said you should come and speak about this and testify, sitting next to me at the CRTC, and answer questions that only you can answer. I don't have lived experience in the industry. So one of the things that we've tried to do is to platform people who have a lot to contribute. So when you say what can the industry do different, it is to get out there. And I know it's dangerous and I know it's scary, I know it is, but it is also essential. And if you are proud of who you are and what you're doing, there's nothing they can do to you. What can they? It's funny, when I get faced with, oh, you know, you're in porn, I say, you don't know how in porn I am. I am so proud of this work. I love everything about this industry. I support the message and the work they're doing. You know, I'm not a hired gun, I'm not a lobbyist. They tried to paint us at ECP, oh you're here to be a mouthpiece. And then they realize, oh you're not the mouthpiece, like you actually are the ownership group. The conspiracy theories finally began to subside when folks from the anti-trafficking side said, oh you work for the previous owner. They said, here's the share transfer, here are the records from Luxembourg, here's the records from the government of Quebec that show a 100% transfer of shares. What do you think, you think we found the former Chief Superintendent of the RCMP and he's in on some conspiracy? It takes speaking publicly to dispel that. Because when we don't speak publicly, myth and misinformation really takes root. So that's number one, we need to speak publicly.

Number two, we need to recognize that we all share the same fortune. And if one of our competitors is being targeted unfairly, they are going to come for us next. And we need to be prepared to stand up for the rest of the industry. And thirdly, we need to support the organizations that are doing the frontline work. And I have to say this, I'll be once again very direct: contributions to the FSC, or to Woodhull, or to New Moon, or to Pineapple Support, or SWAP Behind the Bars, so many great organizations. Those contributions that would be meaningful to those organizations are rounding errors for many of the players in this industry. They're rounding errors on their P&Ls. It's that simple. And we need to contribute together, we need to contribute to shared litigation when we decide to sue government, decide to sue regulators, take on important challenges. And we need to be able to show that support. And I always say, I'm a pretty ingrained free market capitalist, but I do like the communist idea of each according to his ability, according to their need, in the sense that I recognize there are different abilities when it comes to contributions. And so nobody expects an individual, someone operating a small pay site, to contribute on the same scale. But they should do it proportionally. And if the organizations had that kind of proportional support, can you imagine the powerful vehicles that we would have for advocacy in this industry? It would be amazing. It would be amazing. And it's totally possible, because the folks are doing good work. We have to continue supporting that good work.

I would love that. Thank you so much for having me. It was a real pleasure to chat. Thank you.