The California film and television industry is facing a significant economic shift as production companies increasingly move projects to other states and countries, citing the high costs associated with filming in Los Angeles. This migration of “runaway production” has prompted concerns among local labor unions and industry stakeholders regarding the long-term sustainability of the entertainment economy in Southern California, which has historically served as the global hub for motion picture production.
According to the 2024 report from the Milken Institute, California’s share of major film and television production has seen a sustained decline over the past two decades as competing jurisdictions offer aggressive tax incentives and lower operational costs. While Los Angeles remains a center for post-production and creative development, the physical act of filming—which drives significant spending on local crews, catering, transportation, and equipment rentals—is increasingly being outsourced to regions like Georgia, Canada, and the United Kingdom, which provide competitive production tax credits.
The Economic Impact of Production Migration
The decision to film outside of California is largely driven by fiscal necessity, as studios and independent producers seek to maximize budgets in an era of rising labor and production costs. The California Film Commission administers the Film & Television Tax Credit Program, which was expanded by the state legislature in 2020 through Assembly Bill 1447. Despite these efforts to keep productions in-state, the sheer scale of incentives offered by competing jurisdictions often outweighs the local benefits, according to data provided by the California Film Commission.
When a production leaves Los Angeles, the ripple effect is felt across the local economy. A report by the Otis College of Art and Design highlights that the entertainment industry supports thousands of small businesses, ranging from lumber yards and prop houses to local restaurants and dry cleaners. When a major series or film moves its base of operations to a state like Georgia—which has seen explosive growth due to its Georgia Entertainment Industry Investment Act—the local Los Angeles vendors lose out on contracts that have traditionally sustained the regional infrastructure.
Labor Unions and the Future of Local Jobs
For the thousands of members of IATSE (International Alliance of Theatrical Stage Employees) and other industry guilds, the exodus of productions represents a direct threat to employment stability. As production schedules become increasingly mobile, crews are often forced to choose between relocating to follow work or facing extended periods of unemployment. The shift has intensified negotiations regarding working conditions, as union leaders advocate for measures that incentivize domestic production.
In recent years, industry leaders have lobbied for further reforms to the California tax credit system, arguing that the current structure is insufficient to compete with the global landscape. As noted by the SAG-AFTRA leadership, the stability of the entertainment workforce depends on a healthy, localized production ecosystem. The challenge lies in balancing the state’s fiscal constraints with the need to remain a viable environment for the high-budget tentpole films that define the Hollywood brand.
Navigating a Global Production Market
The competition is no longer limited to other U.S. states; international markets have become formidable rivals. Countries such as Canada, Australia, and various European nations provide not only tax rebates but also state-of-the-art studio facilities and favorable currency exchange rates. This globalized model of filmmaking means that even blockbuster franchises, which were once synonymous with Los Angeles soundstages, are now routinely filmed across international borders to leverage these economic advantages.
Industry analysts point out that while Los Angeles will likely remain the creative “brain” of the industry, the “body” of the industry—the physical labor and construction—is undergoing a permanent transformation. The reliance on digital effects and virtual production, which can be performed remotely, further decouples the creative process from the physical location of the shoot. This technological evolution, combined with the financial pressures of modern studio management, continues to reshape the landscape of professional filmmaking.
The next major checkpoint for the California industry involves upcoming legislative reviews of the state’s tax incentive programs, which are expected to be debated in the next session of the California State Legislature. Stakeholders are encouraged to monitor the California Film Commission’s official updates for information regarding future policy changes or legislative hearings. We invite readers to share their thoughts on the shifting economics of Hollywood in the comments section below.