Now it may face the emigration of another home-grown industry – adult entertainment.

That's the spectre raised by some of the hundreds of pornography producers in LA after voters approved Measure B, which requires performers to wear condoms and establishes a permission system for adult entertainment shoots.

The law was advocated by AIDS activists who said it would protect performers from disease.

But the measure has been widely panned in the industry, which says mandatory actor testing for HIV is effective and that the law's real agenda is to put them out of business.

Although it is unclear how the permit system will work, officials estimate it will cost $300,000 a year to enforce. Industry executives and producers contend that will saddle them with high permit fees and force them to create entertainment for which there is no demand.

"People who enjoy adult films do not want to watch actors using condoms – period. So there's no market for it," said industry veteran Larry Flynt, whose Hustler publishing and adult video empire is based in Beverly Hills. "We won't be doing anything in Los Angeles."

Flynt said he was already planning to shift more production to Mexico, Arizona and Hawaii. Smaller companies may follow.

"The bill will make it too complicated and too expensive to shoot in LA," said director-producer Glenn King, owner of MeanBitch Productions. "We're a small business just like anyone else. If we can't exist under this new law, we'll have to look at other options."

Some porn producers have already threatened to move from the San Fernando Valley to other counties in California, or Las Vegas, Miami or even Budapest in Hungary, Europe's porn production hub.

"These companies are not going to take a chance of losing sales for the sake of complying with Measure B, so they will undoubtedly up and leave," said Alec Helmy, the president and publisher of XBiz, a trade publication for the industry. "There's no shortage of locations when it comes to shooting porn. It doesn't take a lot of equipment and it's not like shooting Jurassic Park."

Christian Mann, the general manager of Evil Angel Video, a distributor of adult entertainment, predicted "a lot of the content we distribute will be shot in Europe or outside of Los Angeles".

Steve Orenstein, the president of Wicked Pictures, whose company has long required performers to use condoms, said Measure B put a further squeeze on a struggling industry.

"They are going to potentially charge thousands of dollars per shoot so they can manage what we've already been doing for 14 years," he said. "This is a bad time to be doing this."

Adult entertainment boomed after the advent of home video in the 1980s. A decade ago, economists estimated the porn industry in the San Fernando Valley generated 10,000 to 20,000 jobs annually and had $US4 billion in annual sales.

But declining DVD sales and the availability of free porn on the internet have hammered the local industry. The number of producers in LA has fallen to about 300, from 500 at its peak in 2005, Helmy said.

Although porn production accounts for less than 5 per cent of all film permits in the county, the industry is an important player in the local entertainment economy.

About 5000 adult films are shot in Los Angeles County each year in warehouses and private homes, according to industry estimates. FilmLA, a non-profit group that handles film permits for the city and the county, issues about 500 permits a year for adult entertainment shoots.

"I don't know how many of the companies will leave but there would be an impact for the region if the adult film industry were to truly pack up and leave California," said the president of FilmLA, Paul Audley.

The films mostly fly under the radar but occasionally cause a backlash. In 2006, residents of a neighbourhood in Encino complained to officials about an onslaught of porn filming, including during the Easter holiday.

The Free Speech Coalition, the adult film lobbying group that has threatened to file a legal challenge against Measure B, estimates its industry generates about $US1 billion a year in economic benefits to Los Angeles County and employs about 10,000 people. Among them are make-up artists, hair stylists, audio engineers, lighting technicians and other crew members, many of whom moonlight on porn shows to supplement their income from conventional film shoots.

"What's kept the adult industry at the technical level it's at is the fact that we've got access to all these people who are working on these big pictures," said Jimmy Broadway, owner of Severe Society Films in LA. "They're going to have to find other work, or be willing to travel."

LOS ANGELES TIMES