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How Hollywood stopped making movies in Hollywood

https://www.statsignificant.com/p/how-hollywood-stopped-making-movies
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.

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According to this article about 1/3rd as many movies are made in LA since the 90s. They were only making 30% of films in LA in the 90s so your experience still matches with the data but having 2/3rds of the local film production move elsewhere is significant.
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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.
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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.

[0] https://en.wikipedia.org/wiki/StageCraft

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The cost of housing is probably the #1 reason and, in my opinion, California’s biggest problem.

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.

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> 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.

Love the dig at the end.

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>For studio executives, it means making do with smaller crews, outsourcing production overseas, and, eventually, using AI to replace some human labor.

Ah 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...

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.

My state, like many others, offers rather large tax credits to make films inside this state.

> the entertainment industry's economics are brutal

A large part of those economics are self-inflicted. The money is "loaned" to the production company at credit card rates with repayment from the receipts from theater viewing years later. Depending on how "big" the movie is, 95-100% of the box office receipts for the first 2 weeks of a theater run go back to the studio (so the movie theater survives on selling popcorn and stuff). This tapers down until the theaters get 100% of ticket sales about 2 months later. The last movie that theaters made profits from displaying was The Full Monty - it got a small release in 1997 but those theaters played the movie for months.

I worked with some guys who did special effects for movies & TV shows.

Super interesting, do you feel this is death by 1000 cuts or can you point at the economics no longer working as small handful of causes (i.e. rise of cost of living in LA, move towards direct to streaming rather than theater releases, AI workflows)?
I think the economics of a global entertainment and wealthy persons' playground is what is "ruining" Los Angeles. Earlier in my time there, I spent time in an uber-wealthy circle and basically encountered Epstein-class people doing what they do with the children of their own staff, and that is when I noped out of that entire social circle. There is not much that can be done when you see such wealth pursuing such agendas and you also see them with celebrities, as well as senior city and state officials. Such people are untouchable as far as the law is concerned. Los Angeles is sick with treating others as disposable, with sexual aspects included. And it is not "Los Angeles", this is human nature without boundaries.
yeah this is what I heard from pretty much everyone in the business down there. since production has gone international LA can't compete with, say, Romania. You can ship out your must-haves and rely on locals for the rest, the savings are enormous.

There's some stuff you can still do in LA but a huge amount of actual shoot days are in countries with lower costs and fewer labor restrictions.

I'm a screenwriter/producer attempting to working on a new kind of film studio. I love movies think they are the apotheosis of storytelling. Here's my analysis of the problems, as best I can.

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!

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Explains why I have slowly stopped watching live action. I can't stand the cognitive dissociation that needs to happen for me watch.

Simple one light is different in NYC and Toronto.

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.

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.

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>"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.

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In the next decade, AI will be gutting every industry associated with hollywood other than nvidia and tmsc.
Lots of things like this have happened.

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.

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I wonder if this will change as Hollywood is eyeing three $1B+ box office earners back to back to back this summer
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I mean, kind of good maybe?

As someone not in the USA who loves movies, it is too easy to get sick of LA and desert locations everywhere.

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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.