Run from him, yes. Is he a terrible guy, yes. But I doubt he wanted it to put on the internet. The internet is over run with crappy video the way it is and I doubt anything that may have been film is that great. Embarrassing, yes, violating, yes, but worthwhile to see on the internet, no. Can it be used against her in the future, yes.
Yes, run from this guy. But visions of this guy making money with this video on the net, not likely. He is a jerk and will blackmail her and show it to his friends. Again, he is a low life. (even though I don't know him or all the facts, but it seems kinda obvious)