The past few decades have seen film and TV production companies move away from Los Angeles for one reason or another. But earlier this year, California passed a bill that will increase film and TV tax credits by $330 million. The intention is clear: to reinstate Hollywood’s status as the de facto hub of mainstream film and TV production.

Hollywood Isn’t What It Used To Be

Everyone knows that Los Angeles has always been “the place to be” in the world of film and TV — it’s where ambitious young actors flock to, where blockbusters are made, and where the industry’s most prominent superstars call home. 

Los Angeles emerged as the go-to destination for hopeful filmmakers in the early 20th century for its weather, affordable real-estate, and cheap labor. World War I solidified LA’s status as the nucleus of moviemaking as film production halted in Europe. As a result, millions flocked to Hollywood over the next few decades, and it developed into the hub of the entertainment industry. 

 

However, California has since lost some of its appeal. California’s real estate market nowadays is generally costly. Drinking water has been subject to regulation. According to the U.S. Census Bureau in 2020, the state’s functional poverty rate was the highest in the US. 

For one reason or another, the bottom line is that TV and film production in Los Angeles had become more expensive than it was worth for many companies. As a result, radical changes in the industry ensued when these companies received better offers elsewhere.

Movies Moved Out

A few decades ago, other states, and even other countries, offered lucrative deals to convince production companies to move out of California. Louisiana and Georgia, in particular, were at the forefront of this movement. 

Most of these offers were in the form of tax credits. In essence, Hollywood alternatives were offering a significant reduction in taxes to convince companies to produce content in their state instead — in the hopes that these companies would be willing to forego the luxury and prestige associated with Hollywood, in the interest of what drove them there in the first place: money. 

Looking at the top movies in recent years reveals the magnitude of this exodus of production companies from LA. In 2017, just 10 of the 100 best performing feature films were filmed in California, according to a study by FilmLA. By contrast, 15 were filmed in Georgia, 15 more in England, and even 20 in Canada.

California Wants the Old Hollywood Back

Production companies moved away from California. Now, California wants them back — and are employing the same tactic that successfully lured these companies away in the first place: tax credits. 

The bill will increase film and TV tax credits by $330 million. Bypassing any form of subtlety, California Governor Gavin Newsom explained that the tax credits pose “an opportunity for those productions, TV, and others, in places like Georgia, … to consider coming back to the state of California.” 

The tax credits will likely boost the state’s economy via job creation and begin to rekindle the flames of Hollywood’s long and complicated relationship with film and TV production.