Feb. 23, 2007  -- Until recently, the business of pornography had been going in only one direction: up.

Last year alone, the industry made almost $13 billion. That's more than the combined revenues of ABC, CBS and NBC.

But after years of exponential growth, there are signs that the business is beginning to stagnate.

Pornography's instinct for survival has been remarkable. From glossy magazines, which are becoming obsolete, to video on demand, the business has displayed a strong appetite for embracing new technology and extending its market reach.

But while last year's figure is huge, the industry grew only at the rate of inflation. And the new technologies that once drove it forward have now left pornographers scrambling.

The No. 1 issue?

"Piracy. That's our No. 1 problem right now," said legendary porn actress Stormy Daniels as she prepared to record her latest movie at a nondescript building in California's San Fernando Valley -- considered the porn capital of the world.

"I've gone down the streets in Mexico and seen one of my movies that they've just taken and literally made their own video and written 'Starring Stormy' in a marker, and they're selling it on the side of the street," Daniels said.

Daniels is signed to Wicked Pictures and picked up the award for best contract star at the Adult Video News awards in Las Vegas last month.

After five years in the industry, she says she's made around $1 million. She's angry that her hard work is often stolen by the unscrupulous and repackaged overseas. That's because, for her, it is the only means of regular income.

"It's one of the businesses that once you make a commitment to do it, there's no going back because there is a stigma in the mainstream and in the media. I'll never be president -- I would make a great president, by the way -- but I'll never be president because of what I've done. There's a lot of things I would not be allowed to do because I have done porn."

But Daniels is also facing a closer threat. Amateur porn stars, armed with cheap cameras and computers, are now selling their wares across the Internet and are chiseling away at the profits of companies like Wicked Pictures.

Celeb Sex Tapes Steal Business

And, of course, there's a highly lucrative market for celebrity sex tapes -- or what Daniels describes as "the sudden arrival of accidental porn stars."

"Who had the highest-selling porn DVD last year? It wasn't me. It wasn't Jenna Jameson. It wasn't Tera Patrick [three of the biggest porn stars in America.]. It was Paris Hilton," she said.

Despite the increasing competition, Daniels is pushing ahead with her porn career. She's writing and directing porn movies, many of which are now shot on high-definition cameras.

But this, in itself, is posing an awkward problem for her and some of her co-stars. That's because HD provides crystal images of everything on set, as porn movie director Brad Armstrong explained.

"Great for football, great for National Geographic. But whenever you are showing the human body, there's flaws in those -- especially when you are naked, and especially when you are in the height of passion, some things just aren't as pretty as they should be."

Daniels agreed that some girls were having trouble taking their clothes off.

"Girls with stretch marks are the most self-conscious. Girls in the industry that may have had a child, or lost a bunch of weight, or gained a bunch of weight. They are definitely the most self-conscious. I have girls who come in the set now, wanting to keep corsets on."

Porn with fully clothed stars? It's a sign of the times.