Fake account

It depends. Who is her intended recipient in this alleged blackmail scheme? Are you married? Is she threatening to mail the video to your wife/girlfriend; priest; national press; etc...?

If you're not married and/or a public figure (or expect to be one of the mentioned in the near future) then she really has nothing against you. One sexual transgression (even documented) isn't the end of the world.

If you are married and/or a public figure then notify the legal authorities and tell them this person is committing the crime of blackmail against you. Doing this takes all of the power away from the woman in question though you will have to deal with the social consequences thereafter. If you are married and/or a public figure you must have already known the consequences of such tryst on said position. Grin and bear it. Charge head long and accept the consequences now. Don't let her dictate what happens to you.

There is nothing to stop her from revealing the details of said encounter if you try and pay her extortion money. So don't even consider that.

When dealing with women, ALWAYS keep copies of hot stuff they've said to you, so that if they try to cause trouble later you've got evidence that they led you on..
For example I've kept an old letter from a ladyfriend I used to know in which she says "she likes being a naughty girl"..