THE American pornography business is growing so fast that for the first time in a decade it is attracting the unwelcome attention of the White House and federal prosecutors.

When George Bush entered the Oval Office in 2001 he accused his predecessor Bill Clinton of being “soft on porn” and vowed to crack down on an industry that was generating $9.8 billion (£5.2 billion) a year. But anti-porn campaigners in Bush’s own party say that since then the president has been distracted by the war on terror and has done little.

Thanks in part to a new generation of “crossover” stars such as Jenna Jameson, who appears in both sex videos and the book charts with her bestseller How to Make Love Like a Porn Star, industry earnings have risen to more than $12 billion a year. Top producers such as the Private Media Group are even listed on the Nasdaq stock exchange.

With an average 40% profit margin on DVD sales, explicit porn is twice as profitable as the music business. Porn revenues in the US are higher than all money generated by the combined professional American football, baseball and basketball franchises.

Production is booming too. According to Adult Video News, 13,500 titles were released last year, compared with 8,000 in 1998 and 1,250 in 1988.

And, as in Hollywood, the top 20 celebrities took the lion’s share of receipts — women like Jameson and stage-named men such as Eric Everhard, Flick Shagwell and Seymore Butts.

Porn has also become high profile, with brands such as Hustler edging towards respectability and established stars such as Sarah Michelle Geller, who made her name as Buffy the Vampire Slayer, playing an x-rated actress in her next film.

Hustler is published by Larry Flynt, who was the subject of a 1996 film The People vs Larry Flynt and has stated his net worth as $400m. His business, built around publishing more explicit videos and photographs than mainstream companies like Playboy, has an annual turnover of around $150m.

It is a very different business from the first “overground” porn hit, Deep Throat, a sex “comedy” that filled cinemas in 1972 after it was financed with mafia money. Since then the business has moved from cinema to video to online sales; many say the development of the internet has been driven by porn.

There are some 4.2m pornographic websites, 12% of the total web content, according to the anti-porn watchdog Internet Filter Review. It says users make 68m pornographic searches every day, a quarter of all search engine requests. And some 40m adults in America admit to being regular users of the sites.

The wider acceptance of hardcore material has hit Playboy’s profits. Playboy magazine, first published in 1953 and perhaps the best known of the company’s products, is one of its biggest loss-makers. In the most recent quarter, Playboy’s publishing business posted a loss of $1.8m.

The company is now looking to licensing of its name and bunny-eared logo to generate new business. It is also seeking growth through its adult TV channel and video-on-demand services.

But a backlash against porn may be brewing. Chris Cannon, a Republican congressman from Utah, where even films such as Titanic are censored by video-rental firms, is promoting a law that would allow states to define pornography and overturn national standards that protect free speech.

In the last three months federal prosecutors have initiated actions against companies in Arizona and California accused of distributing “extreme” DVDs, which lawyers are trying to separate from the so-called “vanilla” porn that Flynt says he sells.

Flynt said he had been approached for financial support by Rob Black, proprietor of a company called Extreme that produces bondage videos, and has been targeted by the authorities. But he refused to help.

“After a time of peace and prosperity he is making it difficult for us all. I hope he will get acquitted, not because of what he does but because otherwise they will come after everyone else. But I don’t think he will,” said the porn and gambling tycoon.

Clay Calvert, communications professor at Pennsylvania State University, said that while films involving children or violence remain beyond the legal pale, “many other genres that we used to call hardcore have gone mainstream in America”.

He suspects the latest crackdown has been motivated by the forthcoming congressional elections — politicians want to “warm up” evangelical voters.

“But no matter how many indictments the government hands down, the genie is out of the bottle and there’s little that can be done to reverse the trend,” said his colleague, Robert Richards, a co-director at the Pennsylvania Center for the First Amendment, which promotes free speech.

There is another problem facing the business: oversupply.

Peter Bart, editor-in-chief of Variety, the Hollywood trade paper, says 13,500 pornographic films represented an unprecedented glut.

“I do not watch porn, but it is clear from the numbers that too many are being made to maintain a quality standard,” he said.

Porn producers agree. According to an editorial in Adult Video News, a shakeout is looming.

“Can you have too many college babes and biker girls? I say no, but the consumer might feel otherwise unless standards are improved and more imagination harnessed to the wheel,” it commented recently.

“But, at the end of the day, people will never grow tired of sex. If they do, it’s the end of the world as we know it.”