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This is an article By Paul Wilborn, Associated Press

In the vast, suburban expanse of the San Fernando Valley, Los Angeles, one of the largest industries thrives quietly inside unmarked warehouses, walled estates and hidden studios. The region is home to most of America's pornography industry - videos, websites, phone sex businesses, adult toys and even the old-fashioned magazine.Though many parts of the U.S. economy have suffered, the past five years have been good for the adult industry, as video and computer technology opened the doors to hundreds of millions of potential customers around the world.

The adult industry doesn't follow the same ups and downs that other businesses do, said Paul Fishbein, publisher of Adult Video News, the trade paper of the adult industry. It still grows every year in terms of sales and rental volume.Although the valley is home to some of the biggest names in the movie business, the north side of the Hollywood Hills also hosts some less famous names in the industry - Vivid Entertainment, VCA, Wicked Pictures, and dozens of other studios churning out X-rated DVDs and videos.Twenty years ago, you had people sneaking into those little theaters. That's all changed with technology, said Bill Asher, president of Vivid Entertainment. We've gone from a market of hundreds of thousands to hundreds of millions. The film, television and Web-based products produced by Vivid alone grossed $1 billion in retail sales last year, he said.A 1998 study by Forrester Research in Cambridge, Mass., estimated that the industry generates $10 billion a year.

But in a business in which few companies are public and new providers continually appear, it's difficult to come up with a dollar figure for the industry, said Michael Goodman, an entertainment industry analyst at the Yankee Group in Boston. But it is a very profitable business and pretty recession-proof.Sales and rentals of adult videos produced by American companies was a $4 billion business last year, Fishbein said, based on a survey of thousands of video stores and overall sales figures from the Video Software Dealers Association.That growth has produced dozens of large and small valley studios producing hundreds of new titles each year and created a star-making machinery much like the old Hollywood studios. Actors like Jenna Jameson, the reigning star of adult films, have big-dollar contracts with filmmakers who promote them on websites, movie display boxes and public appearances.

But adult filmmakers and actors aren't the only ones making money. Mainstream cable companies, satellite providers and hotel chains that offer in-room adult movies are cashing in, too, but like to keep their involvement low-profile.