Gene sez: I had a chat last week with Stoney Curtis on this very subject. Seems someone had their ear to the wall

Porn Valley- They aggressively pushed the VHS videocassette, led the change to DVDs, and were among the first to make money off the Internet.

No one could say that the adult film industry has shied away from new technology.

Nor should they have. Each new technology made it easier for porn companies to make and distribute films, first through home video and then via the Internet.

As a result, hundreds of sex film companies have popped up over the last decade, driving an estimated $4.3 billion in sales in the United States last year and making household names out of starlets like Asia Carrera and Jenna Jameson.

Adult filmmakers are once again grappling with the latest technology-high-definition DVDs. But HD video is so confusing and expensive to most sex film producers that some industry insiders suggest the technology could actually prompt a much-needed shakeout in an industry that has for decades only known robust growth.

“There will be fewer companies, fewer small budget films, and less of the riffraff operators,” predicted Peter Warren, associate editor of Adult Video News, the industry’s leading trade publication.

Much of the confusion has centered on the looming format war between Sony’s Blu-ray standard and Toshiba’s HD-DVD technology. The two companies have been unable to agree on a common standard and are independently forging ahead in hopes they will emerge victorious in the marketplace.

That has forced many consumer electronics makers, computer companies, and Hollywood studios to pick sides, a scenario eerily reminiscent of the battle between VHS and Betamax. Some studios, like Paramount Pictures and Warner Bros., have opted to hedge their bets and back both formats.

The porn industry is just as confused about which format will win. Adult filmmakers would like to exploit the extra-storage available on Blu-ray discs, but they are wary about the price of Blu-ray DVD players and the high cost of Blu-ray discs.

The industry has been unwilling to push one format over the other, leaving most producers with little choice other than to adopt a “wait and see” attitude.

“Confusion is pervasive in the adult film industry,” said Tom Funk, a former IT consultant turned porn film maker. “They don’t necessarily understand the technology, and then there’s the format war.”

This transition could not have come at a worse time for many in “Porn Valley,” the area of the San Fernando Valley north of Los Angeles that has become the epicenter of the U.S. sex film industry.

Hundreds of small operators have flooded the market with low-budget films, stepping up competition and eating into profits across the board.

Given the current climate, few production companies can afford to switch. Creating true high-definition films is a complex process requiring special HD cameras that cost up to $80,000 apiece.

After filming, the material must be encoded and formatted on machines that cost as much as $20,000, equipment not needed for current DVDs. Then the film must be replicated, which can cost at least twice as much per unit as standard discs.

Not everyone is complaining. Deep-pocketed production companies like Vivid Entertainment, the industry’s largest producer, have been shooting with high-definition cameras for more than a year.

Vivid is preparing to release its first title HD title-Kink, starring Stefani Morgan-in October. Like some major Hollywood studios, Vivid will release its high-definition titles in both formats until a clear leader emerges.

Industry observers predict smaller production houses that film scenes with so-called “pro-sumer” cameras will find it increasingly difficult to compete, as high-definition becomes the norm.

With the overwhelming majority of XXX films today barely selling 1,000 copies, most filmmakers will not be able to cover the cost of switching to high definition.

“We usually are pioneers, but the last thing the industry needs is a switch to another format,” said Paul Ward, managing partner at Major Video Concepts, an adult film producer and distributor. “It would be insanity.”

Mr. Hirsch recalls that it took about five years for the market to shift from VHS to DVD. The shift to high-definition DVDs will probably take much longer, he said, and the porn industry is not likely to be leading the way this time.