What's Happening?
California, traditionally the hub of film and TV production, is experiencing a decline despite recent efforts to bolster its industry through increased tax incentives. Governor Gavin Newsom's initiative
to double the state's tax incentives from $330 million to $750 million annually was intended to retain Hollywood productions. However, recent data from industry tracker ProdPro indicates a 20% decrease in projects and a 22% drop in production spending in California during the fourth quarter of 2025. Meanwhile, New York, New Jersey, and Illinois are emerging as significant competitors. New York saw a 31% increase in filming and a 23% rise in production spending, while New Jersey and Illinois reported substantial growth in filming counts and production spending. New Jersey's growth is particularly notable as it prepares to host major studio projects, including Netflix's $1 billion investment in soundstages. Illinois is also gaining traction, with significant increases in film count and production spending, driven by popular TV series filmed in the state.
Why It's Important?
The shift in film and TV production locations has significant implications for the U.S. entertainment industry and local economies. California's decline suggests that even with increased incentives, other states are becoming more attractive due to their competitive tax credits and emerging infrastructure. This trend could lead to a redistribution of economic benefits traditionally associated with Hollywood, impacting jobs, local businesses, and state revenues. States like New Jersey and Illinois stand to gain economically from increased production activity, potentially boosting local employment and attracting further investments. The competition among states to attract productions highlights the importance of strategic incentives and infrastructure development in maintaining a vibrant entertainment industry.
What's Next?
As states like New Jersey and Illinois continue to develop their production capabilities, California may need to reassess its strategies to retain its status as the leading destination for film and TV projects. The completion of new studio facilities in New Jersey and ongoing investments in Illinois could further shift production dynamics. Stakeholders in California might push for additional measures to enhance the state's appeal, such as further tax incentives or infrastructure improvements. The evolving landscape may also prompt producers to explore international locations, as indicated by growth in production activity in the United Kingdom and Canada.
