As Film Industry Looks Beyond Hollywood, Los Angeles Feels More Like Detroit. What Went Wrong?

Los Angeles recently got another gut punch. FilmLA, the region’s official film permitting office ,reported in July that on-location production fell another 12 percent in the second quarter of 2026 compared with a year earlier, even as the state’s newly supercharged tax credit program funneled money into 170 productions.Only 4,711 shoot days were logged from April through June, down from 5,394 during the same stretch in 2025 and some 36 percent below the five-year average. California promised help was coming, but the numbers suggest otherwise.The collapse has been building for years; however, its scale is now impossible to ignore.Shoot days in greater Los Angeles have fallen to just 19,694 in 2025 from nearly 36,800 in 2022, a decline of almost 47 percent in three years. Roughly 41,000 entertainment workers left the industry between 2022 and 2024 alone, and Los Angeles County’s motion picture and sound recording jobs slid to around 100,000 from about 142,000 over that same window, according to Bureau of Labor Statistics data.Los Angeles risks becoming the entertainment industry’s answer to Detroit — a company town whose headquarters stayed put while the actual work moved somewhere cheaper. So, how did the industry that built modern Los Angeles end up hollowing out the city that gave it a name?The most glaring problem, according to one crisis-communications veteran, is that Hollywood has effectively priced itself out of its own business.“Los Angeles has become extraordinarily expensive and difficult to produce in. A $750 million incentive sounds enormous, but businesses look at the entire equation — labor, locations, permitting, insurance, regulation, housing and taxes,” the chief executive officer of 5WPR, Ronn Torossian, tells The New York Sun. “Ultimately, business goes where the economics make sense.”A Jobs Bloodbath Behind the CameraIt’s not just actors and directors feeling this. Grips, editors, sound mixers, caterers, and post-production houses have all watched the work dry up as shoot days evaporate. At a congressional field hearing in Burbank this spring organized by Senator Adam Schiff, “The Pitt” star and executive producer, Noah Wyle, attributed the downturn to the combined toll of production fleeing the state, the pandemic, and last year’s devastating wildfires.“It’s a near-cratering of our once-thriving industry,” Mr. Wyle said at the hearing.Representative Laura Friedman, a California Democrat and former film producer, has told colleagues that the industry still supports more than 680,000 jobs and contributes over $115 billion a year to the regional economy. But this base shrinks a little more each quarter. Soundstage occupancy in Los Angeles, once above 90 percent, has dropped to roughly 62 percent, according to figures cited at the hearing.Scoring stages, a small but telling barometer of a healthy production ecosystem, paint a similarly painful picture.Bookings for musicians recording film and television scores at Los Angeles fell to just 11 days in 2025, down from 127 days in 2022, industry trackers say. Mid-career crew members are leaving the business altogether or relocating to cheaper cities, and the industry’s unemployment rate has run more than double the national average over the past year.Where the Work WentThe lost production is not all going to a single rival. Georgia, New Mexico, Louisiana, and Illinois have all built up incentive programs and infrastructure aimed squarely at poaching California’s business, while New York has held up comparatively well.Overseas, the exodus is sharper still. Britain, Canada, Ireland, and Romania have all poured money into new soundstages and richer tax incentives. The United Kingdom and Ontario have more than doubled their soundstage footprint over the past five years, according to figures presented at the Schiff hearing.Several jurisdictions, including Georgia, Ontario, and the United Kingdom, place no cap on their subsidies while California’s program, even after its expansion, still does.California has, at least on paper, tried to close the gap.Governor Gavin Newsom pushed through a doubling of California’s Film and Television Tax Credit Program, raising the total available funding from $330 million to $750 million per year, while lifting the credit available to any individual project to 35 percent of basic production costs from 20 percent.The expanded program has now backed 170 projects, including television dramas such as “The Pitt” and reboots of “Baywatch” and “Prison Break.” FilmLA’s own research shows incentivized productions accounted for nearly 40 percent of television shoot days in the second quarter of 2026, evidence the credit is doing something.State estimates put the expansion’s job gains at just 4,400 to 5,500, a fraction of the roughly 40,000 jobs the industry has lost over the past two years, according to Bureau of Labor Statistics data cited by industry analysts.The credit itself is part of the problem.“The $750 million credit has a number of requirements that make it difficult to use. Large studios are capped at $5 million, and films under $1 million cannot use it at all. And the credit can take two years or more to get,” an entertainment and intellectual property attorney based in Los Angeles, Julian Chan, tells the Sun.Mr. Chan argues the industry is being reshaped from within, not just attracted out by rivals.“The industry itself is changing to small content creators, such as podcasters and influencers, away from big productions. And AI has made vertical dramas competitive with traditional long-form content,” he explains. “So it appears that TV production is falling because it is being replaced with other forms of media and entertainment.”Mr. Chan also observes that, from his perspective, the business “won’t come back because it hasn’t left, but rather the form of it has changed from studios to small creators.”Wildfires, Red Tape and Rising CostsThe January 2025 wildfires that tore through the Pacific Palisades and Altadena destroyed roughly 545 filming locations. However, FilmLA has said the direct hit to shoot days was smaller than feared since those neighborhoods hosted only about 1.3 percent of regional filming in recent years.The bigger drag is the everyday cost of doing business: high labor rates, expensive permitting, insurance, housing that pushes crews out of the region — plus streaming-era production models that increasingly treat Los Angeles as one option among many, not the default.Commercial production, which doesn’t qualify for California’s tax incentive at all, has no such cushion. Shoot days fell nearly 22 percent year over year in the most recent quarter.Mayor Karen Bass of Los Angeles has pointed to the incentivized productions now filming as proof the credit is working and has pushed for an uncapped program that would also cover so-called above-the-line costs such as star and director salaries, along with a long-sought federal incentive.City officials have also moved to reopen municipal sites such as the Central Library downtown to production crews and to cut permit fees for smaller and independent filmmakers.The program is not designed to make competition disappear, and nobody should expect it to, according to a spokesperson for the agency that tracks the region’s production numbers.“The projects that California’s Film & Television Jobs Program was specifically designed to attract back are choosing California at greater rates than in the past,” a spokesperson for FilmLA, Philip Sokoloski, tells the Sun. “Not all of the projects that received credit awards in the program’s first year are in production yet, so we haven’t seen the full effect of the $750 million expansion.”He stresses that what the program does not do, and which nobody should expect it to do, is “discourage the competition.” A study published last year by FilmLA showed California holds its position as the No. 1 global production destination.“Nonetheless, 120 other countries, states and cities are investing in film project attraction,” Mr. Sokoloski continues. “It makes sense for them to want this business; creative sector jobs pay well.”An entertainment industry economist and assistant professor at Hong Kong University, Patrick Adler, says that dynamic makes any single fix illusory. “No single state credit wins that permanently,” he tells the Sun, cautioning against taking the Detroit analogy too literally. “Production and shooting are not the same thing. Detroit lost the high-value functions along with the assembly line — headquarters, engineering, design. Los Angeles has kept them.”What’s leaving, he says, is “the most footloose, most cost-sensitive stage of the process.”Mr. Sokoloski also pushes back on the Detroit comparison, even as he acknowledges the losses.“Comparing L.A. to Detroit makes more sense as a wake-up call than a fair economic comparison. Yes, we have lost significant production work to places like the United Kingdom, Georgia, Vancouver, and New York. Work flows to these places not only because they have film incentives but because, like L.A., they have the stage infrastructure, the cast and crew base, and vendor networks to compete at scale,” he says.“Reforms at the state and local level are shifting the conversation to ensure L.A. stays in the business. The work starts with not taking any facet of the industry for granted.”

As Film Industry Looks Beyond Hollywood, Los Angeles Feels More Like Detroit. What Went Wrong?

As Film Industry Looks Beyond Hollywood, Los Angeles Feels More Like Detroit. What Went Wrong?

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