Hollywood’s Shift in Production Spending
A recent report indicates that Hollywood studios are now allocating only 42 percent of production budgets within the United States, a significant decline from 74 percent recorded 25 years ago.
This analysis, conducted by a coalition of Hollywood unions—including IATSE, the DGA, and SAG-AFTRA—reveals a marked reduction in domestic spending on film and television over the past quarter-century. Specifically, spending on film production budgets has plummeted from 74 percent to 42 percent, while television production has seen a drop from 94 percent to 64 percent.
The report focused on major films and TV episodes that carry significant production costs, defining movies as those with budgets of at least $5 million and TV episodes costing at least $1 million for shorter segments, and $1.7 million for longer ones, based on 2025 dollar values. The New York Post noted these figures in its coverage.
In terms of overall investment, it was found that expenditures by major studios jumped from $3 billion to $7 billion over this period, with television spending rising even more steeply—from $933 million to $8.4 billion.
Despite this increase, the report acknowledged that the emergence of streaming services has contributed to higher production costs. However, it didn’t delve into the reasons behind the trend of productions relocating overseas.
The changes in the industry have fundamentally transformed the scope of production, budgets, and release strategies, leading to disparities in how television series can be compared over time. Additionally, it was observed that the significant budgets are largely focused on a small number of films.
California Senator Adam Schiff highlighted during a city hall meeting in Burbank earlier this year that about 45 percent of U.S. films and scripted shows are now shot outside the country. He pointed out that over 42,000 jobs have been lost due to this trend, as foreign governments aggressively invest in their own film industries to attract productions.
The senator noted that the percentage of U.S. films and scripted shows filmed abroad jumped from 33 percent in 2022 to 45 percent last year. Although he recognized some state incentive programs meant to retain production in California, he advocated for a federal tax credit, emphasizing that state-level incentives are insufficient to combat the global competition for film projects.
However, according to the Los Angeles Times, while the U.S. still maintains a stronghold on large budget productions, its share in this category is decreasing. Last year, the country led globally with $12.15 billion in production spending, but that figure marked a 20 percent decline from 2024. The United Kingdom has increasingly attracted Hollywood productions recently, thanks to its enhanced film incentives, skilled crews, and modern facilities.
