Hollywood Film and TV Industry Faces Decline Despite Tax Incentives
The Hollywood film and television industry is experiencing notable challenges, highlighted by a decline in Los Angeles's production activity and broader shifts in the global entertainment landscape. Between early 2024 and early 2025, shooting days in Los Angeles dropped by more than 20%, and the city's share of global film and TV production fell from 21.9% in 2022 to 18.3% in 2024. This decline is reflected locally by the shutdown of businesses such as a North Hollywood costume warehouse, rental houses, and a car-rental service whose demand plummeted from 42 to just 6 vehicles per day.
The industry is also signaling stress for unionized workers, with motion-picture pension contributions decreasing by about one-third over the past three years. The sector's traditional revenue streams and theatrical distribution models are being disrupted by technology platforms like Netflix and Amazon, which have become major producers and distributors. Additionally, fewer than one in five TV shows are now produced in California, down from approximately 30%, as about 120 global production centers become viable alternatives due to technology.
In response to these challenges, the second season of Fallout secured $25 million in state funding to move production to Los Angeles, and the third season obtained $166 million to remain in the city. Governor Gavin Newsom has proposed increasing the film and TV tax credit from $330 million to $750 million to incentivize local production, a move viewed by some as essential but debated by economists. Despite these efforts, analysts caution that tax incentives alone will not resolve the industry's fundamental issues. Some experts suggest stronger intellectual property rights as a necessary measure, while others emphasize Los Angeles's historical centrality to the business and note the cyclical nature of the industry's fortunes.
