Brassy redhead Rebecca "Lee" Noga manages the webmaster resource site OnTheRopes.com.
An outspoken tattood woman born around 1954, Noga's made a name for herself with her shoot from the hip style. During the Child Porn seminar at the Cybernet Expo, New Orleans in May, 2000, Lee tore into SexTracker/YNOT owner Andy Edmond, saying that if she had her way, she'd put him in jail for his obfuscations and bulls---.
Most knowledgeable webmasters don't want to be on this woman's bad side.
In 1992, the motorcycle-riding former firefighter worked as a computer programmer for Seminole County Government in Florida. She'd almost finished a bachelor's degree in professional management at Nova University after obtaining her A.S. Information Systems in 1991.
The idea for her business came while Noga (who's fond of wearing gold) was taking night classes at Nova University. One of her professors insisted no business was recession-proof. Out of sheer stubbornness, Noga decided to prove him wrong. "I kept coming up with sex, sex, sex," she said. She went on to develop her point using "Sex" as her business model for her undergraduate studies.
Lee started with an adult bulletin board service in 1990. She founded Florida Lion's Den Inc., July 1, 1992 by investing $800 with her partner Blaine Richard III. Fla. Lion's Den was a worldwide distributor, producer, and publisher of CD-ROMs, many of which include adult images. Noga created Lion's Den International Inc. June 16, 1993, after a split with her original partner (Richard).
Noga graduated (with honors) from Nova University in March 1993 with a bachelor's degree in professional management & business. Through Fla. Lion's Den, Noga & Richard were the fourth company to put X-rated images on a CD-Rom (Ecstacy Hot Pics) in 1992 and sell them. They were the first company to do the job with quality & product packaging.
Ecstacy Hot Pics sold 20,000 copies and her next CD, Busty Babes Vol 1, sold about 20,000 while she was partnered with Blaine Richard. She went solo with Lions Den International, Inc., and produced one of the first legal CD's in late 1993 "Busty Babes II" for BBS operators to distribute electronically. "I set an example for legitimizing content on Cd-ROMS," says Noga.
Why were her discs so successful? Porners gave several reasons: Her pictures are crisp and clear. The discs are easy to use and navigate. She has a good distribution system, and buyers know her label, Busty Babes, and look for it. "There are people that we can point to that are probably better known in the industry," trade writer Jack Olmsted said, "but Lee really helped create the industry." (11/7/94 Orlando Sentinel)
In the summer of 1994, an Oklahoma City jury sentenced Anthony Davis to 10 years in prison for selling obscene CD-ROM discs, including two of Noga's, Ecstacy Hot Pics and Busty Babes Vol 1. (Busty Babes 1 became a collectors item and often sold for $500 for nostalgia reasons.)
"The pictures were so disgusting that there never seemed to be an issue as to whether or not they were obscene," Lori Nettleton, the Oklahoma County assistant district attorney who prosecuted Davis, told the 11/7/94 Orlando Sentinel.
Many of Noga's beginning CDs contained illegally copyrighted images which brought down suits from Warner Brothers, Disney and Playboy among others. Noga settled all the suits cheaply (Disney for $8000 and Warner dropped) in 1993-1994. But the legal problems still cost her about $60,000.
Lee used pictures owned by other companies on her first four discs, snagged from computer bulletin boards. She thought the pics were public domain because they'd been floating around in cyberspace.
In 1992-1993, Lee says she was not directly involved in the production of the CD's. Blaine Richard handled the content selection per their arrangement, Noga financed and handled the marketing of the products.
In March of 1995, Noga defended herself in Federal court against an Altamonte Springs company owned by Robert Montgomery, VPic Inc., which alleged she used his copyrighted software without authorization [sued in 1993] . Noga lost the case. On March 31st, an Orlando federal jury ruled that she owed Montgomery $80,000 plus $160,000 for his attorney fees. She was also held personally liable as well as Florida Lions Den, Inc which was closed by time the trial began 2 years after the case started.
Orlando Business Journal 12/8/95:
Lion's Den International Inc. of Deltona, a publisher of X-rated CD-ROM disks, filed for Chapter 7 bankruptcy liquidation Nov. 29 after its bank account was seized by court order in a copyright infringement case.
...Robert L. Montgomery, an Altamonte Springs computer programmer who claims Noga illegally incorporated software he developed into her CD-ROMs. Noga admits she used the software, but only after a former business partner led her to believe Lion's Den was given permission to do so. Last March, a jury in U.S. District Court in Orlando awarded Montgomery and the Orlando law firm representing him $228,933 in damages and fees. Last month the court issued a writ of garnishment freezing Noga's corporate and personal bank accounts with First Union.
Stephen Milbrath, the attorney representing Montgomery, wonders why Lion's Den would file for bankruptcy only days after Noga attended a convention for the adult entertainment industry in Las Vegas Nov. 13-17, presumably to generate more business for her company.
"One has to wonder what kind of scam is being perpetrated here," says Milbrath, of Orlando firm Allen, Dyer, Doppelt, Franjola & Milbrath. "Promoting the product of a bankrupt business, that's kind of clever. We believe that adult CD-ROMs generate a lot of profit and (Noga is) making a lot of money with that company. We want the woman to pay us, and we're damn well going to collect."
...Noga says Lion's Den has sold a combined 25,000 copies of its five CD-ROM titles worldwide, through mail order, trade shows and stores. Lion's Den acted as a publishing contractor, putting CD-ROMs together "in raw form" before sending them to manufacturers for finishing, Noga says. Lion's Den revenues totaled $225,000 in 1993, $211,000 in 1994 and about $140,000 in 1995, she says.
Luke: Noga appealed and lost the appeal Jan 1999.
Noga took Lions Den International into bankruptcy in November 1995 before Montgomery could seize her assets (after the Federal court allowed Montgomery to freeze all her bank acounts).
Noga produced legitimate content CD-ROMS once she broke away from Blaine Richard III. She now owes Montgomery about $300,000.
Born Nov. 15, 1956, in Los Angeles, Noga grew up in an upper-middle class family in Bethesda, Md. Her sister was a debutante. Noga was not. She smoked marijuana, popped Quaaludes and nearly flunked out of high school. She graduated 502nd in a class of 507.
Noga was a competitive golfer and won many South Eastern tournaments and maintains several championship golf records set in her youth at Kenwood Country Club in Bethesda Maryland.
Her first television appearance was when she was 16 a show produced by Mickey Rooney, "Golf With The Pro's". She had been competing since the age of 6 to become a ladies professional golfer. She turned down a partial golf scholarship to Rollins College in Florida. Her brother turned professional at the age of 19.
In 1975, she enlisted in the Navy and served as a medical corpsman and instructor. After two tours of duty, she was discharged from the Navy in 1984. Noga was discharged honorably and currently is a 70% disabled veteran receiving a pension.
Noga returned to Florida and was hired by Seminole County in 1985 as a computer programmer, a job she held for eight years. Her county job evaluations are glowing. Her 1993 review states, "The (work) quality provided by Lee was always of the highest caliber, complete in each detail. Her work shines."
She lives in Deltona, Florida [28 miles South of Daytona Beach]. Her favorite activities include golf, traveling with the motorhome, and playing slot machines in Las Vegas. (Orlando Sentinel 11/7/94)
Luke: In 1995, Noga joined Doug Zimmer and started Zmaster, an early porn internet content provider, with her significant others mothers money.
On November 19, 1997, she appeared on CNN Financial Networks Digital Jam program during Comdex in Las Vegas. Lee said: "Our company is the largest content broker to those that want to start Web sites. There are very few video broadcasting people on the Net. We were the first to bring sound. There are probably maybe five others, but most of them of soft core. It's a new industry and is just now coming to some form of maturation."
Zimmer now works as a truck driver. Though homosexual, he's a devout Catholic and a member of the Knights of Columbus.
Porners tend to be more comfortable working with other porners. So owning a porn company is a good way to get into the porn money circle and start dealing with pornographers, selling them your mainstream technical equipment and prowess. Intel and Adobe market their products aggressively to porners because porn pushes technology. Porn is a great way to Beta test software. This is why Bonnie Murphy came in from the mainstream to buy Zmaster from Zimmer and Noga.
Luke: I talked to Lee Noga in May, 2000.
Lee: I sold Zmaster in February of 1999. Then I sued the new owner [Bonnie Murphy] last September. Then they countersued me May 2000 during the time we were negotiating a settlement started in February. It is bad enough she did not honor our backend arrangement once I left her employ, its unbelievable she felt a need to drive the screw in deeper. I gave her a chance to right me for a lot less money than what she owed. Her enthusiam in February to settle turned hostile in May, and we are going to battle. We have a hearing set on June 20th in Deland Florida where we motioned for default against Murphy for not responding to the suit for 8 months after she was served.
I was a pioneer of adult CD Roms pre-web. I ran an adult bulletin board in 1990, in the BBS days. The first CD Roms were from people scanning the boards [and downloading copyrighted pictures and reselling them]... We put out the fourth adult CD Rom in the world. The three priors were bad, with no graphic interface. They were only scans. They weren't user friendly.
I had a partner (Blaine Richard) who was unemployed. I financed it. I didn't know anything. He was taking pictures from Compuserve and the next thing I know (in 1993) I get sued by Compuserve forum owner, Playboy, Disney, Warner Brothers and it goes on and on and on. We settled. They didn't kill me.
Then there was a shareware programmer (Bob Montgomery) who was a business acquaintance of my of ex-partner (Blaine Richard who became CD-Masters.com) who just got a $1.8 million dollar judgment against him by Gail Harris of Falcon Foto. He (Blaine Richard) got me in alot of trouble.
We were young in business. I had never run a company. I was holding all the stockshares by default since I paid to have the company incorporated and this is how they set it up. Company was so new we never got around to issuing him his stock shares because we just did not know how to do this back then.
After I settled with the Compuserve forum, I called it quits with Blaine Richard and broke our professional association. He demanded his share of the money and I reminded him the settlement with the Compuserve forum and his share of the attorney fees left him no money owed.
Our arrangement was that I financed the company and did the marketing and he selected the images, laid them out and integrated an interface and prepare the pre-master CD for replication. Then, as soon as we split up, I wanted paperwork of the licenses he secured vebally since Blaine claimed to be a friend of Montgomery's.
I asked Montgomery to get things on paper for his license. Apparently Mr Richard had never talked to him about it. Blaine went on to form a company [adult cd-rom publishing] with a new partner, David Van Gelder. Then the two of them, with Montgomery (who they met with in person) , decided to take Lee out and give immunity to Blaine Richard. They decided to team up to take her company and her products and add them to theirs since they were in direct competition. Noga had the highest sell-through on CD Roms in the world. [Meaning, they sold to consumers at high rates.]
Mr. Richard was immune to prosecution because he was in with those three. But he was the one that mislead me and committed the infringements. The trial took place in federal court in Orlando in March of 1995. A week before trial he came forth and admitted 100% guilt and motioned the court to give him full responsibility. Noga countersued Blaine Richard. She lost $228,000 to Montgomery, who only earned total revenues on his shareware program of $5000. But in the same case, she won against Blaine Richard. It was Montgomery vs Noga vs Richard.
We appealed the Mongtomery ruling because he never registered his trademark. It was a mess. They printed our story in the big legal magazines because it just turned the intellectual law upside down. He was granted a win on a mark he never applied for nor reflected with this shareware program. He had one $20 copyright registration on a shareware program with 40 some versions he uploaded to BBS's for distribution. He didn't even have a copyright on the version of the program he claimed Florida Lions Den infringed on.
So I got creamed. They had rights to all my assets. They froze all my money and my Eldorado and other new cars were repossessed 1995, 6 months after purchase. I was totally devastated, broke and crushed with debt. Since their love tryst broke up, the three of them...no longer speak to one another (Montgomery, Blaine Richard and David Vangelder).
They spent a fortune chasing me for control of my products and got nothing to date. It may have leveled me, but I fought them with everything I had and it was equally devastating to them to come up empty after a bloody 2 year court battle. During the court battle not only was it emotionally trying and a financial nightmare since I could no longer pay my attorney, my health became compromised.
Trial was postponed one month while I underwent open chest surgery, 3 months prior abdominal surgery for a bowel obstruction, and five months prior to that, gallbladder surgery. Total physical and emotional wreck.
So, at this time in 1995, we had all this copyright violation going on the net. People didn't want to pay a $1 an image. They wanted to take them from newsgroups. So I came on the scene in November of 1995 saying, 'You have another option.' So I sold [to porn webmasters] images on CD for a couple of pennies a picture. And that started the revolution. I became the poster child for copyright in the adult industry on the medium of CD Rom.
Luke: Now the porn web is flooded with cheap content and content providers, including Gail Harris and Zmaster and the like, are struggling to stay even.
Lee: Zmaster is a new company. It was started [financed] by a friend [Doug Zimmer] who said 'I can't stand you eating bon bons and watching TV and putting on all this weight. You need to get back out there.' I said, 'I can't. I'm ruined. I'm broke. I'm in so much trouble. I have judgments up the ass.' He said, 'You can do this. I've worked with you for years. I'm going to expand my company to include webmaster content. Just guide me through it and teach me the biz.'
I agreed and figured I had nothing to lose. We sold our first webmaster license in 1995 and incorporated in 1997. In February 1999, I stepped down [selling to Bonnie Murphy from Point Break, Inc.]. The sale included my being employed by the new Zmaster owners to continue to do what I did best since Murphy was mainly from a mainstream background with Photodex (she is acting President). A graphics viewer development company based out of Austin, Texas.
My attorney is David Wasserman who was on 48 Hours with Dan Rather last week which talked about the Polk County obscenity case. The firm of Wasserman & Walters is our firm in the suit against Zmaster, Inc in Texas and Bonnie Murphy.
I unfortunately was removed from [dealing in] content by a non-compete clause [which expires February, 2001] that I had signed. I wasn't compensated for being removed from my trade for two years. Its complicated Luke, there was a signed contract and a verbal agreement pending Murphy presenting a backend contract from which we operated under for the five months I was aligned with the new owners. Murphy held me to the non-compete clause as part of the sale to her, but then turned around and broke this contract by hiring me at Zmaster, Inc. based from Texas. Company made 1.3 million in its last 2 years at the time it was sold to Murphy, and the contract we signed was for $12,000 only.
So you can see not all of the pieces are not in place here to make sense. Its complex, but Murphy never produced the second contract and kept making excuses for its delay, and never produced it and held me to the bulls--- one. This is why we had to file suit. She even stopped payment on a check a few days after I told her I could not work with her, she was way too moody. She stalled on all the installment payments giving lame excuses, yet wanted me to be a work horse. The writing was on the wall, I had made a bad deal.
After my exit with Zmaster July 1999, I thought I was back to eating bon bons and watching TV again. But my ex-partner, co-founder of the original Zmaster & close friend [Doug Zimmer] said I had too much to offer the adult webmaster community. Why don't you educate webmasters, that won't violate your non-compete clause and it will keep you in the industry?
So I spoke with my roomate and I shared my vision and OnTheRopes.com (webmaster resource site) was born. Once again, I was back in the game late August 1999 before financial ruins once again.
Yes, I've had my share of litigation but not since the old CD Rom days. The only litigation I have right now is where I am the plaintiff for once. All the CD lawsuits were in 1993, and settled or ended by March 1995. Since you spoke to me Luke, I did become a defendant in a counter suit filed by Murphy 8 months after I sued her. Its all BS, and I welcome this fight.
There is one victim here and it is not her. She got the company for peanuts based on what she promised to pay, made a s---load of money, and and still wants more assets she thinks are hers, not to mention freezing me out of content providing for two years. The company grossed over $615,000 in 1998, she buys it 2 months later February 1999 for a mere $12,000 plus 1 installment payment of $6K and sues me on a countersuit in May 2000? She sued Zimmer too on a countersuit who left the adult industry after the company sold.
We served Murphy in September on a bad check charge and her whole contract being null and void. As of February, Bonnie and I were settling. Lawyers were involved. And we thought we had a settlement ten days ago. Then I got served by the sheriffs last week. So I guess not. It's a frivolous lawsuit.
They're accusing me of working with Gail Harris at Falcon Foto, which I am not. I have never been employed by them. I wish I were. Gail would love to have me on board, and some day it may just happen once I am free to return to content. They've accused me of getting one of their revenues veins routed to me. No truth to that. The other one was that we had fraudulently sold assets. No truth either. We simply transferred our licensing arrangements for those titles we brokered. She does that herself. I don't know why she thought she completely owned them when she was paying royalties on them. She does makes this same kinds of deals with other content providers, reps their products for a commission, makes the sale and sends checks to the property owners. So that dog don't hunt. The titles that were 100% ours she is still selling licenses too as we speak. So where is the fraud?
Anyways I was employed by Bonnie Murphy from March to July, don't you think in that time frame if anything was missing she would have taken care of it then? Is it a coincidence, now that we parted hostile, she cries foul? And they charge me with breaking my non-compete clause by running a webmaster resource center [ontheropes.com]. How that competes with a content publisher, I really don't know.
There are probably 60 resource sites, can't wait for Murphy to prove how OnTheRopes.com single handed damaged a content publishing company. I don't own OnTheRopes.com. I consult with them. I disseminated all the info on how to do it. And they gave me a job. Silent owners who stay out of my way really works out great. They are happy, we snagged an AVN nomination for "Best Educational Site".
Luke: Are you bankrupt? Don't you owe Montgomery $230,000? Didn't the State of Florida take over Lions Den International?
Lee: Yes, Florida kept the bankrupt company Lions Den International open and the Federal Trustees ran the company kinda sorta. Montgomery fired me as the debtor while it was in bankruptcy. His role was to pay the taxes out of pocket and he had no rights to any money the company made. That was stupid for them to seize my stockshares but he felt he could get it out of the bankruptcy. It failed. The State of Florida owned 2 adult CD-ROMS and licensed them to Zmaster to be sold and we paid the Trustees a commission on sale for 4 years.
As a result of sales, Zmaster raised more money than the debt owed on the company. So the creditors got paid 100% plus dividends. The bankruptcy closed February 19, 1999. But I have never filed for personal bankruptcy. They froze my bank accounts. I'm going to have to file for personal bankruptcy at some point, just because I have a judgment creditor on me for 20 years. Mr. Montgomery is a judgment creditor for 20 years. He can take my assets for 20 years. He has not bothered me since 1995.
Luke: How much more do you owe him?
Lee: He has not gotten a dime. I'd imagine its over $300,000 and over $100,000 for attorneys fees. Mr. Montgomery's lawyer saw dollar signs and took the case on contingency. Then once they got it going, he had to see the case through.
Luke: You are suing Bonnie Murphy for the non-compete clause?
Lee: For a contractural dispute and a stop-payment on a check. The non-compete clause is also way to severe and it denies me the right to work. Working for an adult resource site is about the only place that is not in violation.
Luke: Your partner in Zmaster was Doug Zimmer.
Lee: Doug and I go back to 1990, when I ran a bulletin board. He said it is just such a loss [for Lee to sit at home and watch TV]. I'm such an icon out there from the world of CD-ROMS. He said I have so much to contribute still. He spoke to me about this thing called the internet, and since I had nothing to do, I got a dial up and checked it out.
In 1995, someone showed me the YNOT site. CD Roms were dying. Doug said, help me produce CD Roms for retail and for webmasters. They had nothing to do with those in bankruptcy (new Zmaster line). The State had control over 2 earlier works and they were old, in GIF format. They weren't technically correct & webmaster friendly. Doug had that name Zmaster for a year and hadn't done much with it except for freelancing stage lighting for shows. He rented an office and I hung up there with him and the rest is wonderful history.
When I first came on the scene, I was very candid. People were stealing images from newsgroups. I worked with Steve Easton who was then known as Web Posse, now APIC. I came out as an educator on trademarks and copyright. It made sense, I was the poster child with Cd-ROMS so I became a copyright educator and a voice of reason about distribution of obscenity into hostile zip codes. Its about reducing risk, not getting out of the biz. Of course webmasters did not want to hear this...but I wanted to tell my story.
Luke: I don't understand how you were sued by Compuserve when they have so much illegal content on their Adult Forums, which are created by their business partners. They're filled with stolen images.
Lee: That's true so I am told. It wasn't Compuserve per se who sued me. It was a forum owner, Larry Woods from Go Graphics. We eventually settled. We paid him about $10,000. Compuserve allowed companies to open forums on a profit share setup, and from what I am told, Compuserve never really got all that involved, assumed a level of performance most likely. The forum managers just were sloppy and did not control their problems.
Compuserve just did a purge where they removed a boatload of adult forums. Is Compuserve against adult now? No, they're just getting rid of troublesome forums and new people are stepping in. Compuserve doesn't like complaints. They don't like managerial problems. Bonnie Murphy lost her Adult Forum Go Isle so I am told. The terminations appeared punitive, for being lackadaisical in the management to generating too many customer complaints to not paying photographers. This is what I have been told.
Luke: I hear that Bonnie was making over $20,000 a month from Compuserve. How do you stay focused on your work, when if you make any money, it can get taken from you?
Lee: Yes, Bonnie boasted she was making over $20K a month with Compuserve. I saw a check once while I was out in Texas setting up the new Zmaster. She claimed she was solvent, it appeared that way. I stay focused because I don't do it for money. That's why I am not a Joe Elkind or Ron Levi or a Python, Vivid etc. Money doesn't drive me, money is just a tool, not a way of life. I'm 44 years old. If I didn't go to college and get this idea to publish adult images, I'd still be a computer programmer. I'm just a strong activist. I believe in education and making a difference and achieving immortality. Those intangible things. Not those tangible things like money, fast cars, drug habits, booze... I'm for the little guys.
Luke: So you believe in what you're doing?
Lee: Yes. It probably sounds really pathetic my reasons that drive me. I know how to make money on the web. I am a strategist, a concept person, I suck at details and fine points. I'm totally aware of how the net works and I enjoy forecasting trends 6 months into the future and and coming up with innovative ideas. As long as I can find employment to take care of my family, that's all I ask. And if my family is happy at the end of the day, I am the wealthiest person in the world.
Luke: Ontheropes.com looks like a website to help people in the adult industry.
Lee: That's what it is. I've turned down so many lucrative deals but it wasn't me. If you ask around, you'll find that I am not politcally owned and I can't be bought. And I tell people what I think. I'm known as the woman with the brass cojones. I'm passionate about issues. I'm passionate about distribution of pornography into hostile states. There are 22 hostile states and 373 hostile zip codes. And I am going to keep preaching this until people realize that pornography is with risk.
These kids are coming in now... Webmasters are almost mass produced. Anything that makes fast money is high risk, whether it be drugs or pornography. These kids are coming in with dollar signs in their eyes and they risk federal prosecution. With a new adminstration coming next year, Janet Reno [Attorney General] will be gone as a result and she was great for free speech. With this new administration you just watch the number of obscenity indictments increase.
So many webmasters come back, and this is my reward. 'Lee, if I didn't listen to you, I'd be dead by now. Thank you.' How do you put a dollar on that? That means the world to me. And that's what drives me. If one webmaster heeds my warnings, that is all that matters. Then it is all worth it to me. I would never deal in hardcore now. I've published hardcore but you would never see me distribute it. Never. Not worth the risk. I'm trying to get the word out for webmasters to reduce their risk if they deal in hardcore. You guys have to take the hardcore off, censor it, invest in a first amendment attorney etc, you're running harmful matter to children. You're running distribution of obscenity into hot jurisdictions. What can I tell you?
It's like Mother Teresa. Why did she do what she did for poverty? I'm passionate about not seeing webmasters hurt as well as children exposed. I'm honest about my views. That's why I am not wealthy. I don't want to be wealthy. I've seen what this wealth has done to webmasters. No thank you, you can have it.
Luke: Your passion is protecting adult webmasters?
Lee: Very much so. I guess that goes back to what happened to me in the early '90s [with the lawsuits for copyright infringement]. I wouldn't wish that on anybody. That was an emotional bankruptcy to me. I got hit with over $16 million worth of lawsuits [in 1993] over eight weeks. That's a lot to absorb. That's why I got involved with APIC and wanted to educate people about legalities.
Content providers were slow to get on the web. They didn't believe there was a market. Big name companies like Vivid came on late. I don't know what they were doing in the brick and mortar world. All the big guys should've come on in 1995 when I came on, and they came around in 1997. By then, video companies who had been selling images to companies like us didn't realize that their print world was dying. Their video world was dying too. The money was being made on the web. So now they're real s---ty about it. Whining, my God, we lost control of our property. You bet they did.
So many webmasters got alot of content early on and the video companies welcomed the cashflow to offset other losses. They were clueless what this would mean long term. The transition time from CD/video/dvd to this thing called the internet was a gold mine for so many people.
Luke: Why did Disney and Warner Brothers sue you in 1993?
Lee: That was over x-rated parodies. It was the first test case for parodies. We had Snow White sucking off the seven dwarfs. We had Batman screwing Robin. We had non-erotic clip art using pictures of Tigger from the Poo movie... What saved my ass was that Two Live Crew had just won a court victory using parody. It was perfect timing. That's how we backed off Warner Brothers. They dropped. No money exchanged hands. Disney just slapped my hand. They just wanted to get out of the lawsuit.
Luke: I heard that when you were selling CD Roms to consumers, you got content that was just licensed for sale to consumers, and you went ahead and licensed the content to webmasters?
Lee: No. The contracts were for electronic distribution and on the back of the CDs it said 'BBS Ready.' Meaning, it was allowed to be distributed electronically. And the contract to secure the images was a very generic statement saying they gave us electronic distribution rights. So when the web came, this became a transition time, because a lot of photographers said, well, I didn't agree to that. They couldn't of, who knew there was going to be a web? These guys signed away rights that killed them when the web came around. From 1995 onward the video companies knew at the time they sold us content what we were going to do with the images. They didn't care and depended on us to give them cashflow.
Zmaster Productions, Inc. in Florida was based on a lifetime license to me, Lee Noga. They paid one flat fee one time, and every CD I published they got for $20 bucks for however long I published. So we were not really licensing the CD's, we allowed any CD I produced to be be used by webmasters for $20 bucks, the same price as retail pretty much minus a few bucks discount since they were webmasters. Same as BBS days, they bought the CD for $20 bucks.
The only difference is the webmasters invested in me to build out Zmaster which was started on a few bucks and shoe string. We even financed the lifetime license to me and the CD's and often gave hard working webmasters content for free just to get them legal. The four years I was founder of Zmaster (1995-99), we were never legally challenged. We were never harassed.
We had one situation with John Fantasy at Fantasy Productions in Orlando. It involved the products the State controlled from the bankruptcy. We paid him a nuisance fee, built him an online video store on our site, and left hanging to broker his content, he dropped the ball. Then we sold the assets (in 1999 to Bonnie Murphy) a friend of 10 years who got me through the ugly court times. She was a savior back then and earned my loyalty. I trusted her with my life and made myself vulnerable by dropping my guard. The good news is the industry is behind me with my lawsuit against Bonnie Murphy, the bad news is I look foreward to my day in court.