(Bloomberg) -- Diego Mariscal, a camera dolly operator who’s worked on films such as The Avengers and The Equalizer, founded a Facebook group called Crew Stories that provides online support for people struggling in the entertainment industry.
The news has been grim for the group’s nearly 100,000 members: One in three posts lament that jobs are leaving Los Angeles, the longtime capital of cinema. A fifth of the people he’s worked with are quitting the business, seeking training in other fields, Mariscal said in an interview.
The same is true across much of the US. Film and TV work is languishing below 2021-22 levels in many of the states where Hollywood has set up shop — such as New York, Georgia and Illinois. Production has recovered faster in places like Canada, Australia and England, leaving Americans to bemoan so-called runaway production or “offshoring.” On Wednesday, 33 businesses and associations in California announced a new coalition to lobby for enhancements to the state’s production tax credit program.
“It’s a changing landscape for people in the film industry, and a lot of people are getting out of it,” said Mariscal, 43, who moved to Los Angeles 25 years ago to establish himself in the profession.
The business began coming under intense pressure in 2020, when Covid-19 shut down work in much of the world and closed theaters for months.
Initially, there was a bright side to the lockdowns: People stuck at home craved new movies and shows to watch on TV, subscriptions to streaming services soared and studios led by Netflix Inc. and Walt Disney Co. poured billions of dollars into programs destined for home viewing. But investors were unwilling to backstop unending financial losses from streaming and soon after media giants were forced to cut production, eliminate jobs and focus instead on profitability.
Strikes by writers and actors in the US last year shut down the industry again for six months. While some workers won higher pay and better job protections, the contracts raised costs for studios looking to make films and TV shows in the US. The entertainment giants used the strikes as an opportunity to further cut spending.
“They just made the pie smaller,” film producer Jason Blum said at the Bloomberg Screentime conference in October.
Stories about Hollywood’s production slump often focus on the rivalry between California and other states. In August, Warner Bros. Discovery Inc. said it planned to commit $8.5 billion on filming in Las Vegas, contingent on Nevada increasing its tax rebates. The reality is film and TV work in California is down about the same percentage as the US as a whole, according to data from the research firm ProdPro.
The stakes are highest in the Golden State, however, where film and TV production supports over 700,000 jobs and nearly $70 billion in wages for in-state workers. Filming in New York City, also a major production center, supports over 185,000 total jobs, accounting for over $18 billion in total wages.
The state of New York offers production support through 20 regional film offices. While its tax credit program offers a base credit of 30%, that number rises to 40% for productions filming in most upstate counties, according to the Empire State Development office.
In Georgia, where movies such as the upcoming Superman as well as TV shows including Stranger Things, Cobra Kai and Will Trent are filmed, production spending this year was down by half, or $2.42 billion, since 2021, according to ProdPro.
“Following tremendous post-pandemic growth, the direct spend numbers from the past two years show the market beginning to adjust to new norms,” Lee Thomas, director of the Georgia Film Office, said in an email. “Georgia has not been immune to the industry reset following the strikes, but we are optimistic about 2025.”
Meanwhile, the rest of the world has seen production spending bounce back to about where it was in 2021. Some countries, including ones that compete for productions with the US — the UK, Australia, Hungary and Spain — have seen their film and TV business climb over the past four years.
Recent examples of productions being yanked out of the US on the promise of lower costs or government assistance are plentiful.
The blockbuster Wicked from Comcast Corp.’s Universal Pictures was filmed in England, as was much of The Batman from Warner Bros. Blade Runner 2099, a spinoff TV series set in Los Angeles, is filming in the Czech Republic at a total cost the Czech Film Commission estimated at $43 million. That’s the equivalent of just two episodes of shows such as Apple Inc.’s Severance, which was filmed in New York and New Jersey.
In the UK, the government introduced film tax relief in 2007, which enables productions to claim back 25% of their qualifying expenditures as a cash rebate with no annual cap. Earlier this year, Japan began offering a rebate of up to 50% of expenditures. In the Czech Republic, the government offers rebates worth up to 20% of eligible costs for projects registered by the end of 2024, which will increase to up to 35% for productions starting in 2025.
“There are a few major productions that have already started pre-production,” Pavlina Zipkova, the head of the Czech Film Commission, said in an email of upcoming projects set to be filmed in the country and to benefit from its incentives. “But the studios are waiting for the uplift to the audiovisual law to come into force.”
Big media companies like Disney, Warner Bros. and Paramount Global are interested in making film and TV shows that appeal to global markets. Netflix is keeping its spending on content steady at an annual $17 billion, but is allocating a growing portion of its US spending toward comedy shows and sports.
There are other reasons to film overseas beside tax credits, according to Larry Kasanoff, producer of films such as True Lies and the Mortal Kombat series. Streaming has allowed the industry to generate revenue from customers all over the world, and many countries have stories that have yet to be exposed to global markets. Plus it’s just plain cheaper to hire film crews or animators in some countries.
“You just have to be willing to get on a plane and go to Uzbekistan,” he said.
Or locations that aren’t so far afield but where production dollars also stretch further. That includes Canada’s Ontario province, where the Oscar-winning film The Shape of Water and popular TV shows such as The Boys, The Handmaid’s Tale and Suits were filmed.
ProdPro’s data shows that spending on movies and TV shows there has bounced back to 2021 levels. The province has been able to maintain a healthy market share of production in spite of the industry’s global contraction, due in part to its studio infrastructure, labor pool and support at all levels of government, according to Jay Cutler, the film commissioner at Ontario Creates.
To combat the decline in California, Governor Gavin Newsom said in October that he wants to more than double assistance for film and TV production to about $750 million. Newsom’s proposal would represent the first major overhaul of California’s incentive program for film and TV projects since 2014, and may slow the exodus.
“It’s way too little and way too late,” said Mariscal, the dolly operator. “Everyone was saying, ‘Survive to 25,’ but what I’m seeing a lot right now is people taking out loans from family members and maxing out credit cards to re-educate themselves and move out of the industry.”
Methodology
ProdPro data track scripted, live-action feature film and TV productions with an estimated production budget of $1M+. That includes English-language productions as well as non-English language productions commissioned by a major US-based distribution platform or channel (such as Netflix, HBO, and Prime Video). Production spend is estimated by in-house experts on an individual basis based on production criteria and attributes known for each title (such as the talent involved, shooting locations and visual effects contracts).
--With assistance from Kyle Kim.
©2024 Bloomberg L.P.
