pssst! want to buy a dirty cd? : The global cyber village is a boom town for many. Come along with four young men who struck gold with pornographic CD-ROMs. It's not a job you want to tell your mother about, but everybody has to start somewhere.

Robert A. Jones is a Times staff writer. His last article for this magazine was about gay teens.

All is quiet. The workday has moved into the work night at New Machine Publishing, although Tony can hardly tell the difference. Indeed, who could? The offices at New Machine, packed into the industrial flats of Santa Monica, have no windows and offer no clues of the outside world. Midnight looks the same as noon. In the cavernous room where Tony works, a bank of computers occupies one wall, the screens glowing dimly. They illuminate small mounds of detritus scattered over the floor and tables: fast-food wrappers, the back seat of a car, free-ranging french fries. The walls themselves seem to be painted a shade of dirty brown, although it's hard to tell in the gloom. The place resembles a frat house after a big weekend, except darker.

And more quiet. The only sound rises sweetly from the computers humming away. Tony leans into his work. He is digitizing, which is to say converting video images into the digital language of CD-ROMs. A videotape is loaded into one side of a computer and the digitized images come out, like magic, on the other side. All day and all night, the digitizing grinds on at New Machine. At this particular moment, Tony and I occupy the room alone and I squint at his screen, trying to make out the scene being converted. Tony flinches slightly, embarrassed.

"Sorry you have to see this," he says, and then he lets me see. On the screen, an overweight man frolics on a bed with a lithe young woman. Frolic may be the wrong word. The overweight man is doing things to the young woman that cannot be described in this newspaper. He looks like Roscoe "Fatty" Arbuckle having his last fling in the St. Francis hotel. The action proceeds silently, as if the participants are mutes. On and on it goes. Output and Input. Tony, who watches this stuff 10 hours a day, finally turns away and starts rummaging around for a pretzel.

If the New Age of telecommunications is a great beast slouching toward us all, then surely this is its underbelly. New Machine, operated by a group of 25-year-olds, does not look anything like the smooth palaces of the Silicon Valley. This dark place, with its computers spewing smut, is hardly the environment where you would expect to find anyone making serious contributions to the electronic future.

But New Machine, and companies like it, may be doing just that. In the end, it could be places like this--and not Time/Warner or Microsoft--that first explore some of the more interesting niches of the New Age, particularly those areas advancing the ephemeral lure of interactivity. And, interestingly enough, they are making their contribution precisely because they deal in sex, not in spite of it.

No one has precise numbers on the size of the trade in New Age hard-core. But one tracking firm, PC Data of Reston, Va., estimates that the 100 or so porn producers control about 20% of the consumer CD-ROM market in the United States, a figure that would put their total sales at approximately $260 million for 1994. As always with porn, its presence is hardly acknowledged by the industry establishment. But at computer trade shows, crowds go wild around the booths run by New Machine and its fellow travelers. People stack up five and six deep, trying to get a peep at the action. If you go down to your local Virgin Megastore, you can see the discs for yourself, filling part of a wall. Most prominent will be "Virtual Valerie," the first CD-ROM that mixed interactivity and porn. "Valerie," produced by a Chicago-based company known as Reactor, would win the honor of first of its kind, except that Valerie happens to be an animated character. So she must share the glory with "Nightwatch Interactive," the first sex movie to combine interactivity with live actors.

As it turns out, "Nightwatch" was New Machine's debut. It made a bundle of money and elevated the four young producers in the company to the status of Bad Boys of the New Age. The process happened so fast that they hardly knew how to adapt. Larry Miller, one of the four, decided to tell his mom just to see what would happen. "I said, 'Hey, this is what I'm doing.' My mom, I guess, was kind of disappointed. She said she didn't think that pornography was my life's work. I said, 'Mom, I agree. Porn definitely is not my life's work.' "

In truth, all the partners believe they will depart the skin trade, at some point, and move on to bigger things. But in the meantime, they are repeating an old, little recognized cycle in the history of new technologies. For hundreds of years, the first to experiment with a new communication breakthrough have been those with smut on their minds. Whether it be the printing press or the photograph, pornographers have exploited the technology for their own purposes and, in doing so, expanded the medium.

When Gutenberg began printing Bibles on his press in the mid-15th Century, rival printers followed suit, putting out an illustrated guide to lovemaking that was so steamy Pope Clement VII tried, unsuccessfully, to suppress it. Four hundred years later, with the advent of the camera, many of the first photographs depicted erotic scenes and were sold under the table at traveling circuses. Even Thomas Edison found himself lured into the soft-porn realm when he released one of the first movies, "The Kiss."

"If you look at the history of pornography and new technologies, the track record has been pretty good," says Walter Kendrick, author of "The Secret Museum: Pornography in Modern Culture." "Usually everyone has come out ahead. The pornography people have gotten what they want, which is a more vivid way to portray sex. And the technology has benefited from their experimentation. The need for innovation in pornography is so great that it usually gets to a new medium first and finds out what can be done and what can't."

*

As the four entrepreneurs discovered, you can also sell pornography in a new technological form before you can sell mainstream products. The major studios in Hollywood, for example, have yet to produce a feature that allows the viewer to respond to the story. No one knows if enough people would pay to watch such a movie. And because finding the answer would require a huge investment, the studios have hung back.

But New Machine has been producing interactive porn movies since 1992. After "Nightwatch," the company made "The Interactive Adventures of Seymour Butts" and then moved on to the audacious "Dream Machine," which contained one of the most advanced concepts of its time for interactivity between the players and the audience.

By any measure, it has been a fast ride for the producers. In the fall of 1992 only one of them--Hikaru Phillips--knew anything about computers. And none had ever made a film, much less a film for a CD-ROM. In college they had majored in subjects like biology or environmental science and, in the unsettling manner of their generation, supported themselves later on with jobs as massage therapists and carpenters.

But each of them knew the others to be smart and hungry for success. One day, with nothing better to do, they decided to try to ride the wave of the New Age. "At first we thought we'd do a CD-ROM on the rain forest," says Miller. He is sitting in the cavelike back room, where the dirty digitizing takes place, and smiles at the memory of their original intent. "It was gonna be interactive, have bird calls, native music, all that stuff," he says. "Then we discovered we were not thinking in real-world terms. No one would have bought it."

So they decided to get real. If the fortunes of families such as the Kennedys could begin with bootleg liquor, they figured, why couldn't they start with the electronic equivalent, a little bosomy fandango? They played with the idea of interactive strip poker and then someone--probably Hikaru Phillips, otherwise known as Hik--discovered that no one had yet created a porn CD-ROM combining live actors and interactivity. "Hik said, 'Let's do it,' and the rest of us said, 'Why not?' " Miller recalls.

The concept had another, mythic attraction. It entered them into the chase for one of the more tantalizing objectives of the computer age: virtual sex. In its purest form, virtual sex refers not to the voyeuristic pleasures of watching others engage in coupling, however realistic, but to the notion of providing a substitute for the act itself. The user would put on a helmet, or get into a box, and the whole thing would happen to him or her in the privacy of the virtual space. It would require sight, sound and certain other sensory experiences generated by the computer. No one knows whether virtual sex will ever be achieved, and at present no one has come close. Still, the idea waits, promising a fortune to the person who makes the discovery.

For the four entrepreneurs, the years of academic training in their science majors fell away like feather boas. They holed up in Hik's house in the Valley, working day and night. "We were all broke," says one of the partners. "I had been working as a carpenter in Santa Barbara, and for a while I couldn't even move to the Valley because I didn't have the money. I mean, we would eat out of cans. We were broke. Just broke." Originally they chose the name Electromedia Productions, Inc., a bland enough title that eventually would be superceded by New Machine when the young men met new investors and agreed to make products under that imprimatur.

The bed in Hik's room was shoved aside to make space for a couple of old Macintoshes. When someone wanted to sleep, he pushed aside a Mac and crawled into the bed. When Miller wanted a space of his own, he parked his Volkswagen van out front and slept there. Knowing little about computers, they began to teach themselves. Sometimes they pulled out a manual and read enough to make a start. Other times they simply tried and failed until they learned to do it right. The video in "Nightwatch," for example, plays at the herky-jerky speed of five frames per second because they didn't know how to operate the digitizer.

They learned from mistakes like that, from each other, from friends who dropped by. But one way or the other, they learned. In the great tradition of Steven P. Jobs and Steve Wozniak, who founded Apple Computer, they had plunged themselves into the world of the garage start-up. It's a world where the failure rate runs about 99%.

*

CD-ROM stands for "Compact Disc--Read Only Memory" and basically it's the same as a music CD, only with an expanded capacity. It can store the equivalent of 340,000 printed pages of text, or an hour of video plus stereophonic sound. But the beauty of the CD-ROM stems from its capacity to let the viewer respond to the screen. Such simple interactions can be parlayed, by clever producers, into something that imparts a crude, human-like quality to the programs. For example, does the viewer want the young lady on the screen to slide into the hot tub for a frolic? Just ask her and see what happens. She may or may not do what is asked, she may smile or pout, she may simply stalk off. Ask and see what happens.

For the whiz kids, the start-up's demands quickly spread far beyond making the computers work. They needed the actors who would throw off their clothes on cue, they needed cameras and lights, they needed a story to tell. And they needed it fast; the rent money was running out.

The gods, it is said, often look after small children, stopping them from taking that last step into an abyss. Perhaps they also look after 25-year-old entrepreneurs, making sure that they get their chance. In any case, the pieces began to fall into place.

"All of us were thinking, 'Where are we gonna get the girls?' " Miller says. "That was the big problem, the hurdle we had to cross." The rookie porn kings didn't know any women who had sex in front of cameras. For that matter, they didn't know any men, either. They couldn't just look them up in the Yellow Pages. Then, suddenly, they realized they might not need them. Why not just buy some footage from an old-style porn producer and convert it to the digital language of the CD-ROM? A producer was approached. Did he have any footage for sale? He did. So, instead of shooting new stuff, the boys simply bought a collection of unassociated sex scenes and dropped them into the scheme of the CD-ROM production like so many coconuts in a packing crate.

In turn, the disconnected scenes inspired the story. Hik and David W. Herschman, another partner, noticed that all the action in the video clips took place on the beach or in hotel rooms. So they spun out a tale that accommodated these locations. The story would begin with the viewer entering an apartment complex at the beach. He encounters the night guard, a sweet blonde sitting at a bank of TV security monitors.

"Hi there," she chirps, as if the viewer is an old friend. "Didn't think you'd be here so soon." She explains that the complex has cameras "all over the place," including a few in "secret places."

"What you can do," she purrs, "is take control of the monitors and see what they're observing." She says that she does it all the time. It's her "favorite thing." She then offers up the monitors for the viewer's choice, but first she takes off her shoes and then asks if it's OK if she takes off her shirt.

Across the screen flashes two responses: "Take Off Shirt" and "Keep it On." If the viewer clicks on the "Take Off" response, she whisks it away and then smiles gratefully. "That's better," she says.

To watch "Nightwatch" today is to understand how crude the first attempts to exploit a technology can be. The interactivity operates at an imbecilic level. The video sequences jerk along, and the "story" serves only to deliver the maximum number of midnight frolics.

But the young men understood the jewel they were dangling at the viewer: control. Just stick the disc in your driver and you could can begin to pick and choose. Tell the guard to take off her clothes or keep them on and watch her giggle if she likes your orders. Choose which girl you want to watch doing the mattress mambo. The CD-ROM allows you to sex surf.

"We realized the important part was the technology itself," Miller says. "We could take the CD-ROM and do things with the sex footage that no one could do with videotape. And that was really the point, to exploit the format."

Five weeks after they started, the entrepreneurs finished their creation and trotted off with it to the MacWorld convention in San Francisco. The partners figured that one of the largest conventions for Mac users would offer a parade of sex-starved nerds passing by their booth. And each of them would own a computer equipped with the required CD-ROM driver. The perfect market.

Miller, who worked in the booth, immediately turned the computer speakers toward the aisle so that passers-by could hear the whimpers and groans of their players.

"People didn't know what to do. No one had ever heard that kind of stuff at a computer convention," he says. "They were kind of shocked. I'd settle back in the booth and watch people's reactions. They would cruise by, acting like they hadn't heard it. Then they would get to the end of the aisle and do a U-turn.

"Eventually I started adjusting to whatever audience I had. One time, this guy in a wheelchair came down the aisle. We had a scene with sex in a chair, so I switched to that scene. He stopped and watched. Another time, a black couple was standing at the booth and I played a scene that had some black actors. It was all guerrilla tactics. I mean, we had to sell a lot of CD-ROMs or we were out of business."

And they did sell a lot of CD-ROMs. They had pressed 500 discs of "Nightwatch." In four days, they sold virtually all of them at $59.95 apiece. The whole "Nightwatch" production had cost them about $7,000. Thus, during the weekend of MacWorld, they tripled their investment. And it did not end there. In the following months, "Nightwatch" became a bestseller among adult CD-ROMs and an infamous sensation of the computer world.

The young men had accomplished what so rarely gets accomplished in garage start-ups. They had survived. The company was established.

Three years later, Richard Rolle, one of the four producers, sits under a drawing of a four-foot logic tree that has been thumbtacked over his computer. Drawn on a gigantic pad, the logic tree diagrams the latest porn production, a number known as "The Interactive Adventures of Seymore Butts II." Specifically, the tree shows the intricate design of the interactivity. The diagram begins with a thick trunk of lines that branch out into dozens of limbs, and the whole thing is foliated with hundreds of number codes.

The first Seymore Butts adventure, made a year ago, sold tens of thousands of copies, so New Machine is pumping out a sequel. But not just any sequel. Rolle, who now creates programming with the assured air of a master, says "Butts II" will contain the most elaborate interactivity of any porn movie made.

"We're trying to make it work a little bit like life," he says. "We're working with the idea that every time you meet someone and have an interaction, it will affect what happens the next time you meet them. In other words, every decision you make changes your own future."

This idea of making a video drama that operates on the same principles as life is the brass ring that many major studios would like to grab. It would represent a huge leap forward for interactivity. That New Machine is making this attempt--rather than Warner Bros. or Disney--underscores the invisible role that porn often plays in developing new technologies. New Machine can afford to experiment because it keeps costs extremely low and because it can depend on the sex market to buy its products.

Inevitably, "Butts II" also will demonstrate the downside of such experiments. Namely, the concepts, however clever, often do not get fully realized. The low budget that allows the experiment to occur also handicaps the production. Most likely "Butts II" will materialize into an interesting near-miss, much like another of the company's ambitious productions, an item known as "The Dream Machine," concocted by Miller and Phillips.

"The Dream Machine" promised to tailor its sexual escapades to the taste of each viewer. At the beginning of the disc, a young woman coyly interviews the user about his reactions to some of the first scenes. Does he want something saucier? More demure? Does he like girls in uniforms? In groups, maybe? After the viewer indicates his answers, the woman beams her approval and promises--albeit with some ambiguity--to deliver the requested goods. Unfortunately, it never happens. "The Dream Machine" simply does not have the wherewithal--the sheer number of different frolics or young women--in its memory bank to make anything more than a crude response to the viewer's desires.

Still, in seeing "The Dream Machine," you get the idea. You can have fun with it. And it has sold enough copies to make the experiment profitable. Eventually, the idea probably will be copied, adapted and expanded by someone with the resources to deliver on the potential of tailored characters.

These days, the company employs 40 people and bustles day and night. Otherwise, little seems to have changed from the crash-pad days in Hik's home. Everyone still picks at bags of food, and a few catch naps in odd corners. On the wall, an old poster from Halloween hangs in the gloom, announcing a party where, it says, the founders will drink to excess. The party is called the "Hollow Weenie." Rolle himself still works late into the night, along with many others at the company. But understand that Richard Rolle is not this young man's real name. He agreed to talk only on condition that a pseudonym be used. That request for anonymity symbolizes something that has, indeed, changed since the days of "Nightwatch." Somewhere along the way, the partners have learned how to find girls who will take off their clothes, how to sell X-rated goods, how to make money off smut. And in so doing, they have also acquired a certain sense of shame.

Rolle does not want his real name used because he does not want it associated with the work he does. Put another way, he doesn't want to be fingered as a pornographer. Rolle is tall, blonde, clean cut. His sentences come out clipped and short. He looks like a weekend surfer, which he is. He simply never believed he would end up sitting at a computer, dreaming up ways to portray sexual intercourse.

As he talks, you can sense the discomfort. Rolle often uses polite language to describe the action in New Machine's productions, referring to "adult entertainment" and "oral pleasure," as if language could neutralize the hard-core banging that takes place on the screen.

Like his partners, he also indulges in some extended rationalizing. "I mean," he says at one point, "these other (CD-ROM) companies can do very cool things on the environment or biology, stuff that gets them written up in magazines and whatever. But how many discs do they sell? Enough to keep them going?" Rolle shakes his head. "We sell more copies in a month than some of these other places have sold in their whole history."

At one point, in a final expression of expiation, he notes, "my interest was never in pornography."

No, not interested in pornography. It is a phrase that has become a kind of mantra at New Machine. To hear them talk, no one at the company is interested in pornography. They just happen to make it. Of the four partners, only Miller will allow his name and face to be publicly associated with the company's products.

Still, Rolle offers to let me hang out with him on a day's shoot of "Butts II." A certain countervailing pride goes along with the shame. The shoot is a no-penetration day, meaning the girls will take off their clothes and be fondled a bit but no one will engage in outright sex. Mainly, Rolle will be working out a few of the interactive sequences.

The shoot takes place in a gated house that sprawls across an expansive hillside lot in Encino. The sun is shining, birds singing. It could be a set for "The Brady Bunch." But no. The house happens to be the domicile of the film's screenwriter, co-director and star, Seymore Butts himself. Inside, it is adorned with wet bars and not-so-real leopard-skin sofas.

In "Butts II," Seymore broods over a challenge issued by his girlfriend. She has flown to Canada and left him a message asking him to join her. "Seymore really wants to go, but problem is, he doesn't have the money for the ticket," Rolle says. "How's he going to get it and live happily ever after with his girlfriend? That's the core of the story."

As Seymore sets out on his quest, the viewer goes with him. At one point, the phone rings in the house and Seymore asks the viewer to answer it. To get to the phone, the viewer must navigate through the house using the CD's direction buttons. But wait. Even as the viewer works his way to the phone, someone knocks at the door. Does the viewer answer the phone or the door? He can't do both. If he goes to the phone, the story line will move in one direction. If he answers the door, it will move in another.

And so it goes. Either way, as it turns out, Seymore will encounter many beautiful girls during his quest. Friendly, pneumatic, hormone-pumped girls. They seem so available that Seymore hits upon an idea. Why not arrange dates between these women and his friends? "The guys would pay Seymore a little money for the favor," says Rolle. "Sort of a dating service except, you know, things happen, and Seymore uses the money to see his girlfriend. A happy ending."

Happy and sordid. To get the money, Seymore must persuade each woman to go on a blind date and put out with the friend. In truth, he's acting like a pimp. In any case, how to do it? Seymore asks the viewer for help with each encounter, and together they develop a strategy. If they succeed, the action proceeds to the date and some serious hanky-panky gets shown. If they don't, Seymore and the viewer learn valuable lessons for the future.

"The viewer never knows which girl's going to be difficult and which one's going to be easy," says Rolle. "He just has to watch the action and make a judgment, and then see if it works or not."

At midday, the shoot begins. Seymore tries to entice a character played by a young actress introduced only as "Lisa." Seymore marches onto the set and begins to flirt with Lisa. Then Seymore says, "Pardon me, what do you think about masturbation?" Lisa hops up in indignation and slaps him. The scene ends.

"OK. Let's do it again," says Rolle. "Slap him harder this time."

Lisa does. Slap. Then they repeat the exercise again, only this time Lisa is told to coo in response. Seymore asks his dirty questions and Lisa acts as if she was just waiting for some guy to walk up and talk masturbation to her. Seymore has scored.

On and on it goes. Slaps and coos, slaps and coos. Each response eventually will be fed onto the disc. Some of the young women waiting for their scene get bored and start to compare navel rings. A boyfriend of one begins to introduce a snake that is wrapped around his neck.

Watching it unfold, it's hard to believe anything of redeeming value could be salvaged from this scene of bored sordidness. But time will tell. After all, if a standard movie contains one narrative thread, this one will encompass dozens. Ideally, the tracks will merge so the viewer feels as though he has played an integral part in the outcome. Perhaps a studio movie-maker could do it better. But the point is, the movie-makers aren't doing it. Rolle is doing it.

*

Most likely, New Machine could keep making films like "Butts II" indefinitely, toying with the medium and collecting the money by the bucketful. But it appears the partners meant what they said. They have decided that porn will not be their life's work. A few days after the "Butts II" shoot, Miller suggests we meet for lunch. He has some news.

We meet at a neighborhood restaurant. Miller orders a veggie burger. These young flesh peddlers appear to dislike the taste of red meat. They are dainty pornographers. Miller gets down to the news. For some time, he says, he and his partners have been discussing the idea of leaving the porn business and going legitimate. Now, he says, they have begun the transition.

Already, Miller says, they have resurrected their original name--Electromedia Productions--to carry forward the new banner. Miller himself is creating an electronic magazine called Go Digital. Other projects will develop interactive television programs and a series of games called Virtual Vegas that will allow people to play blackjack while they surf the net.

The trickiness, Miller says, comes from the likes of venture capitalists and banks who might shy away from 27-year-old entrepreneurs getting a lot of ink for operating as big-time porn producers. I point out that big-time porn producers is exactly what the partners have become. Miller nods. It's a matter of emphasis, he says.

Since that lunch, Miller and the other partners faded into oblivion for the duration of the transition. Presumably, the new corporate persona is shedding its old skin, trying to emerge in a different guise. A risky undertaking for any company, much less one that is 2 years old.

They may pull it off. They may not. Either way, the legacy of their days at New Machine will remain. "Nightwatch" and "Dream Machine" will have served their purpose as explorers of the new medium, illuminating its potential. As ever with porn, those contributions likely will be ignored, but they will have been made, just the same.

And Miller, Phillips, Herschman and Rolle will move on with their lives. They will settle down, raise families and worry about smut peddlers twisting the minds of the young, including their own. They will have completed the circle.

By that time, of course, CD-ROMs will have faded from the scene and a new technology will have come along. A new technology better than anything the world has seen. And somewhere out there, some kid who is hungry enough and clever enough will teach himself the basics of the technology and then ask the eternal and essential question: I wonder what sex would look like on this thing?

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