> 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.
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.
>"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.
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.
You picked such a commercial movie to make your case. Why not Bugonia, The Odyssey, One Battle After Another, Project Hail Mary, Frankenstein, etc. (all recent)
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.
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.
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.
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.
Los Angeles has mountains/water on all sides so it can't grow in size.
It also utilizes the space extremely inefficiently. Single level single family houses everywhere and the rest is parking space. The few parks are difficult to access by kids arriving by foot/bike.
This is what results in the high rent: Can't grow supply and don't use existing land efficiently.
Look at Google Street maps: LA is a hellscape of concrete and asfalt. Lisbon and Amsterdam are much nicer and greener and they stil have higer density.
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.
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.
Years ago I learned that GM’s financial arm made more money than the car company. The other day I also read that airlines make more money from selling points than from flying people.
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!
Ad 2.) 30 years old are on the youtube. They do their own thing.
And it is also actually ok to do entertainment for older people, including boomers. People act as if there was something shameful about over 40 existing and have entertainment for them. It is as ok as enrertainment for young.
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.
Investment-driven development. When it's no longer about creating something compelling, but about convincing the investors that banking the production means a fairly safe ROI, you stop getting creative works by auteurs and you start getting sequels, remakes, and low-stake, inoffensive, mediocre, forgettable, bland sludge. At the upper end, investors give directors checklists and guidelines to limit their authorial voice. That's why it doesn't matter who the directors of the MCU movies have been. They're just Disney-produced movies. A film student could have directed them and it wouldn't make a difference.
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.
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.
> 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...
I was watching a terrible movie, Wolverine, and the titular character is driving through Canada, we're told, and I found myself thinking that "huh, that bit of Canada looks a lot like New Zealand, interesting."
Then he drives across a one-way bridge, and tracking shot above the car captures the big arrow New Zealand paints on the exit lane indicating you should drive in the *left* lane (started doing this after few too many tired tourists from RHD countries reverted to habit upon leaving a one-way bridge causing a head-on collision further down the road). They could've edited the arrow out, surely.
TL;DR thought Canada in a movie looked like New Zealand, it was New Zealand.
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.
There’s definitely didactic art made post 2016, but I wouldn’t write everything off beyond that date forever. Online review aggregators are less reliable for recent movies, so you might want to find individuals that you trust for >2016 recs, instead of algorithmic scores.
I actually view 2012-2020 as peak “PSA messaging” era more, which a lot of people would probably coincide with the liberal optimism from Obama and course-correcting anxiety of Trump term 1. I think since covid Hollywood has “toned it down”, because the US has by and large
moved on from that social phenomenon.
I’ve been in Los Angeles for over a decade, and I disagree with the premise that Hollywood has some overarching plan to shape how we think— more people watch TikToks than movies and network TV. I view Hollywood, and the creators/writers/producers of films themselves, moreso holding up a mirror reflecting the current circumstances we’re in rather than manufacturing it out of nowhere.
It was Netflix. Only the most milquetoast pablum gets made over there and it’s all shot with the same cameras and settings and it all looks the same and every idea is ripped from either an HBO show if it’s a series, or an older film if it’s a film. They sprayed Marvel content everywhere to my dismay, I can’t think of a less interesting universe or setting than “gritty version of reality except with superheroes”. Netflix hasn’t made a single TV show or film worth watching.
It really killed filmmaking, I’ve only seen ~5 movies released since 2016: Parasite, Backrooms, Once Upon a Time in Hollywood, Get Out, Don’t Look Up. I watch plenty of movies, there are more great movies from the 1940s to 2010s than I’ll ever have time to watch. I hope interesting movies start being made again.
Hollywood also went into sequel overdrive and released very few original properties and milked X-men, Harry Potter, Star Wars, etc. That didn’t help.
Films having a moral lesson for the audience is a weird thing to criticize when it's been done since time immortal—it's exceptional when a story doesn't have one. The fact that your cutoff is 2016 I think says more about what specific messages you're sensitive to rather than media containing more of them. I think cultural context is a big factor as well because you don't necessarily notice or react as strongly emotionally to what would have been considered controversial or on the nose at the time.
So like I think your experience is valid, and you're definitely noticing a real thing but I think it's better explained by you having more media literacy for contemporary topics and so you see the mirror being held up by these works way more obviously. Like I think about post 9/11 beginning of the Iraq war films and they're not even a little bit subtle.
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[ 0.28 ms ] story [ 61.2 ms ] threadAh 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...
Love the dig at the end.
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.
Besides millionaires from Santa Monica and homeless from downtown.
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.
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.
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.
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.
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.
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.
It also utilizes the space extremely inefficiently. Single level single family houses everywhere and the rest is parking space. The few parks are difficult to access by kids arriving by foot/bike.
This is what results in the high rent: Can't grow supply and don't use existing land efficiently.
Density: LA = 8,210/sq mi, Lisbon = 17,040/sq mi, Paris = 10,100/sq mi, Amsterdam = 13,670/sq mi, Copenhagen = 19,195/sq mi. (from wikipedia)
Look at Google Street maps: LA is a hellscape of concrete and asfalt. Lisbon and Amsterdam are much nicer and greener and they stil have higer density.
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.
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.
[0] https://en.wikipedia.org/wiki/StageCraft
If something is not being done using AI now, it's because the results are poor, not because of some sort of reluctance to embrace it.
AI may replace classic CGI
Thanks for the laugh.
As someone not in the USA who loves movies, it is too easy to get sick of LA and desert locations everywhere.
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.
Crazy world.
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!
And it is also actually ok to do entertainment for older people, including boomers. People act as if there was something shameful about over 40 existing and have entertainment for them. It is as ok as enrertainment for young.
Simple one light is different in NYC and Toronto.
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.
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.
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...
Then he drives across a one-way bridge, and tracking shot above the car captures the big arrow New Zealand paints on the exit lane indicating you should drive in the *left* lane (started doing this after few too many tired tourists from RHD countries reverted to habit upon leaving a one-way bridge causing a head-on collision further down the road). They could've edited the arrow out, surely.
TL;DR thought Canada in a movie looked like New Zealand, it was New Zealand.
I’ve been in Los Angeles for over a decade, and I disagree with the premise that Hollywood has some overarching plan to shape how we think— more people watch TikToks than movies and network TV. I view Hollywood, and the creators/writers/producers of films themselves, moreso holding up a mirror reflecting the current circumstances we’re in rather than manufacturing it out of nowhere.
It really killed filmmaking, I’ve only seen ~5 movies released since 2016: Parasite, Backrooms, Once Upon a Time in Hollywood, Get Out, Don’t Look Up. I watch plenty of movies, there are more great movies from the 1940s to 2010s than I’ll ever have time to watch. I hope interesting movies start being made again.
Hollywood also went into sequel overdrive and released very few original properties and milked X-men, Harry Potter, Star Wars, etc. That didn’t help.
So like I think your experience is valid, and you're definitely noticing a real thing but I think it's better explained by you having more media literacy for contemporary topics and so you see the mirror being held up by these works way more obviously. Like I think about post 9/11 beginning of the Iraq war films and they're not even a little bit subtle.