▲ 225 points
back
254 comments
Nothing new. When I was in college down in LA I lived in a very small town founded by stunt people. Probably 80% of the people there were in the stunt business. Every few months they were off to another state or country for filming. Hollywood is just for the studio execs now, everyone else flies to whatever country offers the best tax breaks for them to film.
They go to some pretty incredible lengths too, A friend of mine and his dad own a stunt company that works explicitly with semi-trucks. Pretty much every time you see a semi in a stunt in a movie it's either my friend or his dad driving it. They will ship these semi's to foreign countries instead of film locally because the tax incentives are greater than moving entire production companies around the world.
A few days ago I visited the little picturesque town of Hope, British Columbia. While driving down the Main Street, I saw a dozen chainsaw carvings of wildlife. I thought, why does that one look like Rambo? Found out the first movie was filmed there in 1982. The movie took place in the fictional town of Hope, Washington. When the movie begins, you see Sylvester Stallone walking into town under the real “Welcome to Hope” sign that was in the Canadian town at that time.
I used to have a number of Hollywood studio clients and worked at a studio-adjacent company for a bit.
It's all about the tax incentives.
Georgia started the race by offering very generous (at the time) tax credits to pull production away from LA and NYC. It worked for a while, and Disney filmed most of its blockbusters there for 15 years. But the talent was unwilling to move to Atlanta, so the actual cost savings weren't that great. This meant Georgia had a U-shaped movie distribution: very low-budget straight-to-streaming-back-catalog crap using entirely local cast and crew, or really big budget movies. Very few middle-tier movies shot in Georgia.
Then London decided to get in on the act, and offered a ridiculously generous film tax incentive that applies to almost all film costs, not just the "below the line" costs (those related to actual production expenses, like crew, equipment, etc). The only catch was that the studio had to publicly disclose the movie's budget, but the incentive was so generous that studios were willing to play along. LA survived the initial blow, until the dual writer and actor strikes drew attention to the UK's non-existent labor protections, but Georgia was destroyed by London's incentive because its tax incentive was the only reason for Hollywood to film there (and filming in Georgia is down over 80% from its peak).
So then California decided to make its film incentive competitive again, nearly matching London's film incentive. But the geniuses in the state legislature wanted to spread the love, so the most competitive credit is only available outside of LA. Epic Fail #1. Worse, there's a fixed and relatively low annual cap for the film tax incentive, so only a handful of productions qualify each year. Epic fail #2. As a result, productions that don't qualify for the CA film tax credit generally go to London (for the incentive) or Vancouver (because everything is cheaper there even without incentives).
P.S. I was part of the downturn-related layoffs, so I no longer work in film or anything film-adjacent anymore.
According to this article about 1/3rd as many movies are made in LA since the 90s. They were only making 30% of films in LA in the 90s so your experience still matches with the data but having 2/3rds of the local film production move elsewhere is significant.
This seems inevitable for most industries in the US (car/general manufacturing)
1. City/region becomes a boom-town based on a new high profit-margin industry
2. As that region becomes more wealthy, labor increases in price, thus there is more incentive to seek labor/resources for that industry outside the city/region
3. City/region hollows out of middle-class level jobs for the industry, retains ceremonial labor and executive offices.
>everyone else flies to whatever country offers the best tax breaks for them to film
once people are arranging plane tickets/charters, then they fly to the best place financially.
But LA/Hollywood.gov priced themselves out of the market first.
Is this Pioneertown, CA?
Aging myself here but growing up in a "movie set city" (definitely not LA) in the 90's meant getting rerouted on the way to school because The Wire needed our block again. It's funny to see how the article shows this wasn't just a local annoyance back then, but an early sign of a much bigger, long running shift in where and how Hollywood actually makes movies.
Tangential to this, I worked in Hollywood for a while. The studio I worked at had a gaggle of unpaid interns. There was a mix of normal kids and the sons/daughters of prominent Hollywood execs.
I would agree, in many respects, that unpaid internships are glorified daycare. It isn't like a tech internship. No one gets a project to own. The reason these roles existed at all was because it didn't cost anything. Paying them would've required justifying the cost, and there was no way to justify these kids.
I'd say interns were productive maybe 15% of the time. They just hung out and if you needed something done you didn't want to do, you could pull one to do it. Usually physical tasks (track down a wig) or internet research. Yes, they'd occassionally do coffee/lunch runs.
In my experience, I found the nepo babies to be the least entitled workers. They never balked at what you asked them to do, and understood the assignment quickly. They had a great attitude. They often went beyond what you asked. By contrast, other interns usually had some kind of attitude about it or required way more hand holding. I was pretty surprised; common wisdom would lead you to expect the opposite.
I looked them up recently, and many of them are doing small film stuff shooting in LA.
My guess is that they had a better understanding of the social aspect of the industry (or work in general).
They were there make a good impression and build connections
Maybe those nepos actually were interested in the craft and came there by active choice?
Pretty clear, the Nepo babies don't understand the value of money. The interns who did realised they were being scammed being expected to work for free would of course would be hostile to doing anything other than the bare minimum to get something on their resume.
You referred to them an entitled but clearly they were not entitled to any financial compensation so who is really entitled here the workers or Hollywood expecting free Labour ?
The article repeatedly mentions how production moved to Atlanta due to tax incentives. Even that is a race to the bottom, as Disney moved production of Marvel movies out of Atlanta last year to the UK where they got better tax incentives. Even the undercutting cities are being undercut.
An interesting read but also feels like the rearranging of the deckchairs on the Titanic given the forthcoming disruption from generative AI in this industry.
I spent some time last month with a relative in the industry (camera operator and producer) and he already uses some very sophisticated AI to map out scenes and shots in gen ai full video before they shoot IRL. It's mostly a cost saving exercise as well as occasionally helping to improve the quality of the deliverable.
He is totally expecting that the next shift will be that gen ai video will become good enough to be considered the master (ie no need to film) and he is already transferring his skills as a camera operator into prompting and AI assisted scene design.
He knows that many different disciplines he works with will all compete for that prompting work and there obviously won't be enough work for everybody to go around.
The first part of this is using human actors in front of 360 video stages like The Volume [0] to display the sets (which was pioneered by The Mandalorian) and then ultimately the actors themselves will be AI rendered.
And at this point it doesn't matter where this is filmed.
I grew up close by to Pinewood Studios 30+years ago - I can't imagine them putting a lot more investment and development into that lot given where this is all going.
>"If this has all drifted into bummertown, it’s because many of Hollywood’s problems can be traced back to a single economic theory of everything: the rent is too damn high. From there, everything else starts to unravel."
It's really understated just how much this is behind absolutely everything today. The only reason it became normal for SV software companies to pay 100k+ salaries to interns in the 2010s is because half of that had to be handed over to a landlord every month just to have people physically able to show up to your office. This is why Europe and Asia have completely dominated production of all the great AAA games over the last decade; when creative people can afford to live somewhere, all of the sudden you have the resources to truly focus on a product.
The cost of housing is probably the #1 reason and, in my opinion, California’s biggest problem.
California as a whole is still doing pretty well but high housing cost is slowly pulling out the rug from under the state.
But the California legislature does know that and has forced many cities to start building housing but there is still a lot work still in flight.
I absolutely don’t want to imply there’s any one reason that he led us to where we are. This comment isn’t to try to undercut or malign some great data and investigation. But an article on this topic that literally does not include the word union in the entire text is not painting a full picture.
You can fairly point out that unions still exist in Georgia, and that the UK and other European locations have robust worker protections - this isn’t a situation of union work vs. non-union work. But the extent to which unions in California have a stranglehold on the movie industry is absolutely part of the story here.
With a very few exceptions, I don’t watch anything made past 2016. Not sure what happened in Hollywood then, but it’s just seems that they are constantly making some sort of public service messages that they need to pay me to watch. Not the other way around. That goes even if I agree with some of the messages.
When corporations grow to a certain size, they become banks.
The same thing kind of happens to industries when they get dominated by a few large players. The large players are banks. The core of the industry becomes a form of finance.
Hollywood is now the financial capital of the film industry, not where films are made. Hollywood finances films.
> For a major blockbuster, tax incentives equate to tens of millions of dollars, freeing up money for name-brand actors, elaborate set pieces, and unremarkable CGI effects.
Love the dig at the end.
Video game industry analysts are predicting the same is going to happen to their (my) industry. Contract out more and more work to SEA/China/Poland et.al. It's extra painful because games are relatively cheap to localize (fantasy is universal, it's just translating text and words), so studios based in cheaper parts of the world already have an advantage and they have access to the west markets. Global competition can be brutal.
A good question to ask is why did Hollywood, as a centralized thing, ever exist in the first place?
Cameras and equipment was expensive and not terribly mobile. Having a few studios and lots with the cameras and lights and rigs and so on gave you a huge advantage. From that a lot of the industry moved to an area, so it also had the network effect. People start getting lazy and want to commute to their latest project, so the whole #FilmInLA is compelling.
That's disappearing. Rapidly. The idea that one place is where movies are made is comically obsolete.
Talent is around the globe. Handheld cameras provide extraordinary quality and can work off the lighting of a candle.
And honestly, Los Angeles is a stunningly boring city. And if the movie is invariably some navel gazing about it by its residents (always, always featuring long shots of people on highways or driving around, because every LA film has to jerkoff about driving), why should a film be filmed there? I'd infinitely prefer London, Paris, Toronto, Miami, Vancouver, Berlin, NYC, Chicago, rural areas, Rome, and so on.
The world would be a better place if this sort of backwards, historic centralization was obliterated.
>For studio executives, it means making do with smaller crews, outsourcing production overseas, and, eventually, using AI to replace some human labor.
Ah so this might be how "shorter working hours" looks on the ground. "Leisure and Culture"'s share of the pie has actually shrunk abit:
https://archive.md/2026.06.04-075622/https://www.theguardian...
That's world, not US, so it might also be that foreign production teams are not counted as "leisure and culture" in their own jurisdictions lol
Original pdf here, p11 https://globaljusticeproject.wid.world/www-site/uploads/2026...
To be fair: the quality of movies produced by Hollywood has gone rapidly downhill already in the 1990s. You only need to compare the movies Quentin Tarantino makes; now personally I think Pulp Fiction is still by far his best work, but I concede that the movies he created lateron were above average (though I would not go as far as many others, who'd rate these in the 8 to 10 point ranges; I'd go more between 6 to 7 or 7.5, largely because there are a few smaller issues cropping up and I always notice these when I compare them with Pulp Fiction, which was really good; actually really well-made).
I noticed this in the 1990s in many movies. For instance, Independence Day - the computer animation pissed me off. I found them bad. Even Terminator 2, where evidently many people say it was great, I was nowhere near as convinced; I found the first terminator better and more "logical" and more consistent, too. But things decayed quickly in the 1990s really. Even movies such as Avatar I find total garbage. And while I am not totally against superhero comic/marvel adaptations (I liked xmen and in particular Hugh Jackman as wolverine), these are always the same formula. Tons of CGI, big fights where nobody knows what is going on, very little thought elsewhere in that formula. There are exceptions, but by and large these things keep on happening. Individual directors manage to break out of the mold (Chris Nolan) but by and large movies really SUCK now compared to the "oldschool days". And while some of this may be due to me becoming more critical, the production quality just sunk. Take movies such as Megalopolis - this captures what is going wrong. It seems as if the whole movie industry has partially collapsed in the last +25 years and they don't really know what to do to change this. The same has happened to games, by the way. It is almost as if only one formula exists only now.
Something interesting to note, is that while "Hollywood" is fast losing its status as the nexus of the traditional film / tv industries, LA in the broader sense is already very well established as the global (Well at least "Western") hub of the content creator economy. Literally thousands of wannabe / up and coming YouTubers, Tik Tokers and "Influencers" of all sorts are packing up their lives and moving to LA every year in order to be closer to each other, and to the talent pool of cast-off film and tv folks that live in LA.
The "Cost disease" seemingly hasn't yet infected that industry at least (Or the infection is still in its early incubating stage) though I think that's in large part due to the fact most of the content creators aren't working within the established industry framework, but rather are intentionally trying to work outside of it, in order to avoid paying union rates.
My take on the problems including cost sickness:
1) Supply/demand. There's actually a shortage of quality movies relative to what the market will bear, one need only look at the occasional breakout hit like Obsession to see that it's possible to make a ton of money if you understand the demand signals.
2) Demand signals. Median age of someone with greenlight authority is ~62. In the 80s, there were 30-year-olds running entire studios. No disrespect to Boomers, but this business is about marketing cultural products and they have no idea about the culture. This also creates significant demographic headwinds in the job market.
3) Costs. Wages/COL are a part of it, as are unions, star power demand, and how companies like AAPL/AMZN can do streaming as a loss-leaders, which creates a lot of downward pressure. The biggest one is that in theatrical CAC > LTV. You can spend 2x your production budget on marketing and that investment evaporates the first week of showing – there's no real brand loyalty to studios/streamers, especially now that they've commoditized their IP and put it on rotation through the online platforms.
4) Originality. Franchises, sequels, and remakes were roughly three-quarters of 2025, and nine of top ten 2024 worldwide grossers were sequels. This is a result of local minima/risk arbitrage in the studio's portfolios, the bottom line is that people will still show up for a Spiderman movie even if its crappy b/c of the pre-aware IP and there's nothing better out there. There are wonderful exceptions to this of course, like Christopher Nolan and many indie films.
5) Politics. Hard to not deal with politics amidst the outrage cycle, but the easiest way to achieve that is to have a plurality of viewpoints – which you can get if you stop trying to bend beloved IP to contemporary politics and just make new shit!
I worked in Los Angeles doing animation and VFX software for 33 years, and left 5 years ago as the cost of living there made no sense, and my prospects for work became nomadic global chasing of work now taking place in countries with no or ignored labor laws. (As if labor laws are respected in the US anyway.)
Interesting in relation to the article, the author describes working out of the empty Warner Bros. lot; I lived across the street, right next to "The Starlite" (the author will recognize.)
Los Angeles and the entertainment industry's economics are brutal. My wife is exponentially more successful than I, a film she was the VFX producer for won an Oscar, she's an industry player, and still LA is too expensive.
> The quintessential example of this is Broadway, where the cost of living in New York City increases, leading wages to rise, but there remains a fixed set of theaters for Broadway shows to be staged, thereby limiting revenue growth. The end result is economic unsustainability, as these productions either curtail spending by employing fewer people or pass higher costs along to consumers through ticket pricing, often both.
Adding more Broadway (or off-Broadway) theaters to increase revenue wouldn't really address costs; the additional productions would presumably have similar staffing costs as the existing productions, so ticket prices would need to be similar in order to recoup the costs. [1] But viewers would have more options and be less likely to pay the top ticket prices.
[1] Unless you're certain that the show would fail...
"The end result is a peculiar version of Hollywood: a place increasingly devoid of physical production, populated instead by executives, AI art, and unpaid interns drag-racing golf carts through empty studio streets..."
With the correct writer, that could be a cool indie movie, right there.
It really breaks the illusion for me when a movie is shot where it isn't set. I'm like, "What? They don't have pine trees in Austin."
I wonder if this will change as Hollywood is eyeing three $1B+ box office earners back to back to back this summer
I was talking to a guy who did hollywood financing- when you get a 40% tax credit from the national level plus a 3 mil tax break at the state level producers will gladly shift production especially when the financial realities of film are pretty tough
Explains why I have slowly stopped watching live action. I can't stand the cognitive dissociation that needs to happen for me watch.
Simple one light is different in NYC and Toronto.
Lots of things like this have happened.
Silicon Valley stopped making computers, or any kind of manufacturing. Who knows, maybe some black projects exist.
But I was told that some underground utilities in the area were non-standard, not just water, power, sewer, but also nitrogen or more.
In the next decade, AI will be gutting every industry associated with hollywood other than nvidia and tmsc.
All change is mourned. This is nothing but market logic pursuing low costs, extracting work from gradients of wealth. In Hollywood the gradient is low compared to other “exotic” locations such as Toronto, Prague or Florida.
This exodus will remain until production costs in LA fall below the costs in other places, or LA can offer a measurable benefit compared to other locations.
Capitalism is a double edged sword - it allocates labor very efficiently, but when you are providing the labor, you don’t want to have that labor extracted from you too efficiently.
Nowadays, we see movies being made deep on the heart of Texas!
Blockbusters and tax credits started the trend, but green-screen filming sure accelerated it. Now that so many movies are almost entirely CG, it really doesn't matter where the green screen studio physically exists.
The silver lining (for Americans) is that Hollywood movies are still very Hollywood. Canadian actors, Canadian crews, and Canadian filming facilities all combine to make utterly American films. If real locations are used, they're carefully chosen so that Vancouver stands in for New York, Calgary for Minnesota, etc.. Canadian references, accents, and values are all carefully erased.
The one thing that seems to stay stubbornly American is the money people.
I saw a Trump clip not long after his inauguration where he said he was unhappy about Hollywood moving overseas due to tax cuts but so far nothing.
Like with manufacturing in China, allowing your competitor countries to build up expertise means at some point it become difficult to regain top place. And whilst bulk of the profits may flow back to the USA at present, may not always be the case.
It’s not like it’s been hidden, all USA needs to do is reduce the gap so financially there is no incentive to go abroad.
Great for other countries though.
> Perhaps I have gone to great lengths to prove something studio executives already know: the average viewer is not scrutinizing every frame for telltale glimpses of the Toronto skyline.
Or you know, even knows what the toronto skyline looks like.
I used to live in vancouver, tons of films are shot there. Unless they are pointing the camera at a famous landmark, i probably can't tell. If anything the forest is more of a give away then the city (if it looks like an alien planet in star trek ToS, then its LA. If it looks like an alien planet in stargate then its vancouver)
Corporations want a reproducible formula that can scale. Creating movies (and TV) is an inherently creative process. The people who end up running these businesses hate that but creativity doesn't scale. This is why reputation and track record is so important in getting any project greenlit. So the likes of Steven Spielberg, James Cameron or Christopher Nolan have a lot of freedom. They can't quite make what they want. A studio still has to bankroll the project and they may not like it. This is how Francis Ford Coppola ended up self-funding Megalopolis and, well, the studios were right to pass, let's be reeal.
This is also why we get so many sequeals, remarks and reboots. It's a property with a proven track record. That's so much easier to get greenlit.
The other thing that happens is that corporations (including studios) can only increase profits by cutting costs and raising prices. And this last one has basically killed the ecosystem upon which movies (and TV) depend. Let me explain.
Once upon a time, LA was relativvely cheap to live in. This allowed people to live there and work on getting their break while working flexible, often service jobs. Waittressing, hosting, that sort of thing. It could be anything, really. But it has to be flexible enough to take time off to go to auditions and jobs and whatnot. It is very difficult to make a full-time career out of working in this industry. If you're an actor and you, say, get a principal guest role on a TV series you might make $1000-2000/day but you only end up working 1-2 days on that every 3 months. You can't live on that. Recently there was a piece on the actor who played Sam in Lord of the Rings having to sell his house even though he made $250k for the 3 movies. That was over several years.
This isn't just for acting. Lighting, camera work, production, direction, editing, writing, special effects, costumes, etc etc etc.
What sustained people were residuals and the relatively low cost of living. Residuals for TV basically got killed by streaming. A lot of movie projects became unsustainable when the VHS/DVD/Blu-ray revenue pipeline dried up. Matt Damon spoke about this.
But the other thing streaming killed was the network TV pipeline. A bunch of screenplays would be written (and sold). I'm talking hundreds. A handful of those would be made into pilots. These days that's maybe 10-15 per year. Previously it was 50-100+. A certain number of those went to a half then full series order of 22+ episodes. Getting one job could sustain you for the year.
Streaming came along. The residuals went away. Those 22 episode seasons became 8-12 episode seasons every 2-3 years if you're lucky. There was no syndication money anymore. Working people in the industry relied upon residuals in dry spells to make a living. And suddenly you needed 2-3 jobs a year instead of 1 and that's really difficult to get and, even if you get it, to schedule so they don't conflict.
And then obviously ticket sales in movie theaters were in decline and fell off a cliff with the pandemic. Starting in the 2000s you had the shift to save costs to places like Atlanta, Vancouver and Toronto. Productions started chasing tax credits all over the world and would immediatley leave when they ended.
Let me elaborate on just one example: writing. To get into this field you generally would start as a production assistant ("PA"). This would generally be an unpaid position initially (an "internship"). At some point if you didn't screw up, you might start getting paid. Then you'd be the assistant to a writer. This would give you experience in a writers room. Hopefully whoever you worked for would give you feedback and teach you things. The next step would be to get a staff writer job. Back in the day you'd get paid for 22 episodes. You'd be on set for filming and you'd learn production. Most producers came from a writing background. Eventually, this career would lead you to being a showrunner. Think Shonda Rhimes or Vince Gilligan or Matthew Weiner. Weiner in particular learned his craft and earned street cred as a staff writer on The Sopranos and he tried to sell Mad Men to HBO.
Now what happens if you get hired to write 8 episodes instead of 22 so you'd getting one-third of the pay. Your job is over before shooting starts so none of these young writers are getting experience to become producers and ultimately showrunners.
It's a bit like how some companies stop hiring juniors and just overwork seniors with the threat of layoffs. Well, those seniors used to be juniors. Don't hire and train juniors and eventually there won't be any seniors. Same thing.
I guess the short version is: streaming killed Hollywood.
“many of Hollywood’s problems can be traced back to a single economic theory of everything: the rent is too damn high.”
Because of financial incentives. And it makes critics sad when films aren’t shot where their story is based. Saved you reading it.
What about the woke movement and movies turning into politics?
Just like how Detroit stopped making cars and Silicon Valley no longer manufactures semiconductors. Seems like capitalism always finds a way to outsource those jobs in a race to the bottom for the lowest wages/taxes/regulation.
I mean, kind of good maybe?
As someone not in the USA who loves movies, it is too easy to get sick of LA and desert locations everywhere.
Hollywood makes slop now, the last movie I saw was some iteration of Mission Impossible where the genius agent defeats the all powerful AI and that just felt like lack of imagination.