A new ProdPro report has confirmed what many in the industry feared: studio executives are increasingly choosing to film outside of the United States. According to a survey of more than 150 executives, the top five most preferred production locations are Toronto, the U.K., Vancouver, Central Europe, and Australia. The highest-ranking U.S. location—California—came in sixth, followed by Georgia, New Jersey, and New York.
This is more than just a shift in preference; it’s a red flag for Hollywood’s future. The exodus of productions from Los Angeles and other major U.S. hubs comes as studio budgets shrink, tax incentives abroad become more competitive, and industry workers struggle to recover from COVID shutdowns, last year’s strikes, and now the devastating L.A. wildfires.
Why Is the U.S. Losing Productions?
The answer is simple: cost and incentives. Territories like Canada, the U.K., and Australia offer generous tax credits, many of which cover above-the-line talent—something that California’s incentives currently do not. New Jersey is now offering tax breaks of up to 39%, while British Columbia has expanded its annual film tax credit program to $843 million (CA$1.2 billion), far outpacing California’s current incentives.
Meanwhile, U.S. film spending dropped 26% in two years, from $19.6 billion in 2022 to $14.5 billion in 2024. While the U.S. remains the top production country, that lead is shrinking fast.
Hollywood’s Response: Too Little, Too Late?
California Governor Gavin Newsom has proposed raising the state’s tax credit cap from $330 million to $750 million, but with productions fleeing at an alarming rate, many industry insiders worry it’s too little, too late. The “Stay in L.A.” campaign—which has already gained 17,500 signatures from film workers and industry names like Sarah Michelle Gellar, LeVar Burton, Lilly Wachowski, and Alex Winter—is calling for a complete removal of the tax credit cap for three years to help California compete on a global scale.
And it’s not just about jobs—Los Angeles’ entire entertainment infrastructure is at risk. The Palisades and Eaton Fires, which began on January 7, have displaced thousands, including many film crew members. With housing costs rising and production work declining, many are questioning whether they can afford to stay in the city at all.
The Stakes Have Never Been Higher
2025 is a make-or-break year for Hollywood. The streaming boom is over, peak TV is gone, and now studio executives are looking to cut costs wherever possible. If California and other U.S. production hubs don’t step up with bold, aggressive incentives, Hollywood could see its dominance continue to erode.
Studio executives have spoken. The real question is: Will Hollywood listen?
