Film Industry Shifts: California Incentives Spark Production Boom, But Gains Are Uneven
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California is betting big on Hollywood’s return, but a complex picture is emerging as film and television production landscapes shift across the U.S. and beyond. Governor Gavin Newsom doubled the state’s tax incentives for film and TV projects to $750 million annually in July, and early data suggests a 10 percent increase in shoots during the third quarter, according to industry tracker ProdPro. though, this uptick doesn’t tell the whole story.
The Incentive Race & Shifting Spend
While California aims to reverse a years-long “filming exodus,” most of its competitors are also experiencing growth. Critically, California’s overall production spend actually fell 10 percent year-over-year to $1.5 billion in the third quarter. ProdPro attributes this decline to a surge in independent film projects, wich typically have smaller budgets and employ fewer crew members than big-budget studio productions.
This trend is evident in the latest round of incentive recipients: 42 of the 52 projects awarded funding were independent, with 32 boasting budgets under $10 million. Blockbusters like Heat 2 and the next Jumanji movie were among the only 10 big-budget titles to receive support.
Los Angeles: Indie Growth, TV Decline
The shift toward independent productions is especially noticeable in Los Angeles, where feature film shoots increased by roughly 10 percent.Though,this growth was offset by a concerning 20 percent drop in episodic television shoots. “These numbers show early signs of these incentives having their desired effect,” noted a filmla vice president in October, acknowledging the impact of tax credits, but also the broader industry forces at play. The decline in television production is linked to fewer episode orders from major studios.
Beyond California: A National & Global View
California isn’t alone in navigating these changes. Several states are vying for production dollars, with varying degrees of success:
- New York: Experienced a 17 percent year-over-year increase in shoots, but production spend fell 32 percent to $849 million. New York’s incentive program is capped at $800 million annually, slightly exceeding California’s.
- New Mexico: home to netflix’s ABQ Studios, saw a 25 percent jump in shoot count but a 37 percent decrease in production spend to $62 million. The state’s $130 million incentive cap is significantly lower than California’s.
- Illinois: A rising production hub, soared 63 percent in shoot counts and 12 percent in spend to $198 million, fueled in part by shows like the Chicago franchise.
- New Jersey: Is rapidly becoming a major player, with a 100 percent increase in filming counts and a 170 percent surge in spend to $400 million. Netflix and Paramount are both planning major production hubs in the state, set to open in 2028.In 2024 alone, New Jersey saw a record $833 million in production spend.
- Georgia: A former powerhouse, experienced a meaningful downturn, with a 33 percent decline in both shoot count and spend, falling to $351 million. Disney’s decision to move Marvel Studios productions to the U.K. contributed to this decline.
Globally, the U.S. saw a 15 percent rise in film shoots in the third quarter, while the U.K., Canada, and Australia all experienced declines.
A Cautious Outlook for 2025
Despite the competitive landscape and shifting production patterns, the overall outlook for 2025 is cautious. ProdPro estimates total global production spend will reach $41.6 billion, a 7 percent decrease from the previous year. While Disney and Paramount have increased their content spending forecasts for 2026, it remains uncertain how much of that investment will flow into traditional film and television projects versus sports and international content.
This story appeared in the Nov. 19 issue of the Hollywood Reporter magazine.
