Is LA Still Hollywood’s Powerhouse?
By Movieguide® Contributor
With Los Angeles still struggling to return to pre-strike norms, many in the industry wonder if California has lost its place as the premiere destination for Hollywood movies.
For decades, L.A. served as the go-to destination to shoot any form of entertainment, from movies to TV shows to unscripted content, like reality TV and documentaries. However, the city’s grip on the entertainment industry has slowly begun to wane as different locations begin to offer better incentives. As with any business, the question of cost is at the forefront of producers’ minds, and more and more, they are finding that California is no longer the cheapest place to shoot.
“Pressure on budgets is at the highest level that it’s been in 10 years,” a production executive at a major studio told The Hollywood Reporter. “We want to be getting as much return as we can. It’s rare we do a show without some question about the incentive aspect, not just in scripted, but all the way down to unscripted and documentaries now.”
In general, productions now find better rates in states that are actively growing their entertainment capabilities such as Texas or Georgia. Earlier this year, Texas allocated $200 million in entertainment grants to grow its presence in the entertainment industry.
“We all want this business to be here,” said Paul Jensen, the executive director of the Texas Media Production Alliance, adding, “We have a really strong crew base that wants to work hard and get the job done. And, while we’re enjoying the success of an enhanced incentive program that’s fully funded, we’re starting to see some real changes in the infrastructure to accommodate big productions.”
READ MORE: TEXAS LOOKS TO EXPAND HOLLYWOOD PRESENCE BY INCREASING ENTERTAINMENT GRANTS BUDGET
Georgia, meanwhile, allows its tax credits to apply to unscripted programming, something that California does not. California, meanwhile, has yet to allocate more of its budget to draw back more productions, causing it to become less and less competitive.
“There’s a very significant difference in California, which has been the hardest hit [and] just hasn’t responded to what’s going on in the world of incentives,” Sony Pictures Entertainment CEO Tony Vinciquerra said. “The cost of doing business in California is so high that it’s very difficult to price out a film.”
The cost of actually shooting in California isn’t the only barrier causing people to leave, but also the general cost of living and operational costs — gas, electricity, etc. — make other places more enticing.
Overall, this has led to a significant decline in production in California, even compared to last year’s numbers which are heavily impacted by the dual strikes. Q3 of this year saw a 5% decline in production days, with little reason to believe a positive change is coming soon.
READ MORE: HOLLYWOOD PRODUCTION CONTINUES TO SLOW
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