Hollywood Money Is FLEEING America

Hollywood Sign on hillside framed by trees — Photo: Maks Ershov / Shutterstock

Hollywood’s center of gravity has been sliding away from U.S. soundstages for a quarter century; the numbers now show a structural relocation of big-budget work that reshapes where money is spent, where crews earn, and which jurisdictions compete hardest to host the next tentpole or prestige series.

The Short Version

Major U.S. studios now spend most feature-film budgets outside the United States; domestic share fell from roughly three-quarters in 1999 to under half in 2024.
Television has moved too, with U.S.-filmed spending dropping from the mid-90% range to the mid-60s over the same period.
The shift is most acute at the top end: among the 25 highest-budget films each year, the U.S. share plunged to about one-third.
Incentive competition abroad and among U.S. states has enabled the migration, but research shows subsidies often buy short-term shoots, not durable local industry growth.

What the new study actually shows

An Ernst & Young analysis commissioned by a coalition of Hollywood unions puts hard contours around a trend practitioners have felt for years: where major studios spend to make movies and television has internationalized decisively. For features, the share of production spending filmed partially or primarily in the U.S. fell from 74% in 1999 to 42% in 2024; for television, the share slid from 94% to 64% over the same span. Title counts echo the pattern: the portion of studio films shot at least partly in the U.S. declined from 66% to 54%, and television episodes from 96% to 70%. The drop is steepest at the top of the budget pyramid—among the 25 priciest films in a year, the domestic filming share reportedly collapsed from 74% to 34%.

Two details matter here. First, the EY work covers 1999–2024 and focuses on major U.S. studios, which filters out the noise of microbudget independents and one-off specials and captures the capital-intensive projects that anchor below-the-line employment. Second, the report distinguishes between spending share and title share; both are declining, but spending share is falling faster—meaning not just fewer U.S.-partly-shot titles, but more of the biggest checks being written elsewhere.

How the production geography changed

Film and TV production is unusually mobile. Unlike heavy manufacturing, the assets are people, IP, cameras, and temporary builds; they travel. Three forces encourage movement. First, cost arbitrage: exchange rates, wage differentials, and line-item savings in construction, extras, or VFX can swing millions on a large show. Second, policy: refundable and transferable tax credits, cash rebates, and VAT relief have proliferated across Canada, the U.K., Australia, Eastern Europe, and competitive U.S. states; these can trim 20–30% or more from qualified spend under the right structure. Third, infrastructure and networks: once a hub accumulates stages, crews, vendors, and permitting muscle, it compounds—productions follow reliability.

Economists call this an incentives arms race. States and countries bid to rehome shoots, and productions flow to the richest, most reliable packages—until a bigger or more predictable offer appears somewhere else. The pattern is well documented: incentives do attract productions in the short run, particularly for mid-sized studios across many incentive types and for majors when credits are refundable or transferable; but durable industry growth—permanent jobs, stable wages, and endogenous capacity—often fails to materialize at scale. That disconnect explains why a locale can post record shoot days one year and a lean slate the next when a cap is hit, a program sunsets, or a rival sweetens terms.

What the incentives literature actually says

Across peer-reviewed studies, legislative reviews, and policy syntheses, the consensus tilts toward skepticism about broad public returns from film and TV incentives. A USC research program examining state programs found no meaningful long-term economic benefits commensurate with cost, even as productions arrived to claim credits. A comparative economic geography analysis reported that while incentives shift filming locations, the effect depends on incentive design and studio type; major studios respond mainly to credits that convert into cash-like value, underscoring how financial engineering drives site choice rather than local spillovers. Journalistic and think-tank summaries of two decades of programs converge on similar arithmetic: large aggregate outlays—more than $25 billion across states—against weak tax recapture and transient employment gains.

None of this implies incentives “don’t work” in the narrow sense; they do exactly what they’re designed to do—lower the cost of shooting in a jurisdiction and win bids against competitors. The problem is what happens after wrap. When subsidies buy footloose activity with short time horizons, much of the value is exported to suppliers, above-the-line talent, or parent studios. Unless credits are paired with deeper capacity-building—stages, crew training, predictable multi-year pipelines—the local industry can deflate as quickly as it inflated.

Why the EY findings matter for workers and studios

For labor, location matters most because that is where hours and pensions accrue. A drop from roughly three-quarters to under half of feature spending filmed in the U.S. means fewer big-budget weeks for grips, gaffers, set dressers, and craft services in traditional hubs—and more workdays captured by crews abroad or in newly ascendant states. For studios and streamers, the calculus is fiduciary: in a margin-squeezed, hit-scarce era, a credible 20–30% offset on qualified spend can determine whether a greenlight survives. The EY time horizon, spanning pre-streaming ramp, streaming peak, pandemic, strikes, and the rightsizing of slates, underlines that this is not a blip but a structural recentering toward globalized production finance.

At the top end, the 25-highest-budget cohort is where infrastructure bets pay off—water tanks, large stages, advanced virtual production, and heavy VFX coordination. The sharp U.S. share decline in that bracket shows that once a high-capacity hub—London’s ecosystem, Vancouver’s corridor, Australia’s stage complexes—proves it can shoulder a franchise film end to end, it becomes a default option for future cycles.

Caveats and scope

The EY study, as summarized in industry reporting, centers on major U.S. studios and on projects filmed partially or primarily in specific locations; the metrics mix spending share and title share, which answer different questions. That framing captures the locus of the largest budgets and most employment-intensive shows, but it does not map the entirety of independent or microbudget production.

Implications for policy and strategy

Policymakers face a tradeoff between headline shoot volume and durable industrial base. The research record supports three disciplined moves. First, prioritize program predictability over sporadic generosity. Production planning cycles are long; a reliable, multi-year credit with clear audit rules often beats a richer program subject to annual caps or political churn. Second, tie incentives to capacity-building: fund workforce pipelines in crew crafts and postproduction, condition credits on local hiring tiers, and co-invest in stage infrastructure that survives the trailer trucks. One Milken Institute review of California’s market underscored how structured, efficient incentives in a major city interact with existing talent densities to stabilize work rather than merely chase it. Third, measure net public return rigorously. Independent studies have found weak to negative fiscal returns in many states; if the goal is jobs and tax base, governments should track recapture explicitly and sunset or redesign programs that underperform.

Studios, for their part, should avoid the false economy of pure incentive-chasing when it impairs creative throughput or introduces schedule risk. Financial offsets are one input; production reliability, crew depth, and post/VFX integration are others. The winning strategy blends them—leverage competitive jurisdictions for principal photography while anchoring development, postproduction, and franchise management where institutional knowledge compounds.

The bottom line

The EY-led data series confirms what the industry’s itinerant professionals already know: the locus of U.S. studio production has internationalized, and the heaviest budgets are leading the way. Incentives have been the accelerant, not the foundation. If the United States wants a larger share of tomorrow’s film and television spend, it must compete on more than rebates—on reliability, skilled labor density, infrastructure, and policy that rewards permanence over presence. The alternative is familiar: another year in the arms race, another wrap, and then the work moves on.