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SÃO PAULO, SP (FOLHAPRESS) – Hollywood may be the mecca of cinema, but much of what we see on screens today was not born in the studios that make up Los Angeles’ landscape. Big blockbusters, such as “Jurassic World: Dominion,” which premieres this Thursday, and smaller productions, like “Queer,” have been leaving the city for destinations offering better filming conditions—the United Kingdom and Italy, in these cases.
Whether due to the ease of finding more suitable settings for stories, cheaper labor, or attractive tax incentives, the fact is that Hollywood is currently experiencing an exodus. The trend has become a joke in the newly released season of “Hacks” and has not gone unnoticed by Donald Trump.
In an attempt to control the outflow of film production sets from the United States, the Republican gave the green light, two months ago, for the government to assess tariffs on films shot overseas, which could reach up to 100%. The measure would affect both American productions, funded by domestic studios, and international ones.
Details and deadlines were not disclosed, and it’s possible the tax will never take effect, judging by the president’s erratic behavior. Yet many saw the measure as a sort of punishment from Trump toward a class that largely opposed his re-election—something akin to what occurred in Jair Bolsonaro’s Brazil, which lost its Ministry of Culture and witnessed a witch hunt targeting cultural funding programs.
Preventing the export of films and series from the United States through taxation, however, is not a measure viewed favorably by the Hollywood community—Wes Anderson and Spike Lee are among the filmmakers who criticized it at the last Cannes Film Festival. After all, many productions have left the country in an effort to reduce their budgets, at a time when major studios are accumulating debt.
It is a measure that conflicts with what American researcher Paula Landry calls the “collaborative nature of audiovisual production.” Author of the book “The Business of Film,” which dissects the step-by-step process of filmmaking as a business, she emphasizes the importance of diversity on a film set, inhabited by workers from different places and sectors.
Beyond the creative aspect, sometimes you need five producers from five different countries to access certain incentive programs and reach the budget a film requires. You can’t slice up a film to determine whether it’s more from one country or another. This makes the debate over tariffs almost absurd. From a financial standpoint, it becomes nearly impossible.
In addition to the American audiovisual industry being more mindful of its spending, the pandemic also played a role in this exodus. According to Lee Thomas, director of the Georgia Film Office, the quarantines from five years ago forced many workers to leave Los Angeles. And while California was stricter in reopening its film sets, other states moved ahead—expanding the studios’ horizons.
“Many of the talents do not want to return to the city,” she says, referring to the film agency of Georgia, which a decade ago surpassed California as the American state where the most films and series are shot. Since the end of the pandemic, the government has invested about $2.5 billion in this industry.
Among the measures adopted by Georgia and other American states are tax credits and reimbursement of production expenses, attracting companies looking for a home for their studios, partnerships with universities and technical schools to train specialized labor, streamlining the issuance of filming permits, and even paying a fee for movies and TV shows to display the “made in Georgia” logo in the credits.
Add to that factors influencing a producer’s choices, but which are beyond their control, such as declining cinema ticket sales and the growing proximity of many studios to Silicon Valley, home to platforms like Amazon Prime Video and Apple TV+—and six hours away from Los Angeles by car.
Netflix, which focuses its business on audiovisual content but was not born in the shadow of the Hollywood sign, will build a $1 billion complex in New Jersey and, last week, announced plans to turn a temporary studio in Surrey, United Kingdom, into a permanent one.
Other American states such as Louisiana, Texas, and New Mexico have approved aggressive tax incentives. New York, another state that has been losing ground due to high local costs and the iconic filming locations of shows like “And Just Like That” and “Only Murders in the Building,” increased its subsidies to $800 million last year.
“Hollywood is unfortunately today a romanticized idea. Everything changes, and we are seeing Hollywood cease to be our major production hub and instead become merely remembered as the cradle of our cinema,” states Landry.
In response to this, California struck back last Friday when its governor, Gavin Newsom, long pressured by the situation, announced that he will increase tax incentives for films and series from $330 million to $750 million annually.
The measure aims not only to anchor productions in California, but throughout the United States. A favorite with both audiences and critics, “Wicked” is an intrinsically American production—whether because of its ties to L. Frank Baum’s book, the film “The Wizard of Oz,” or the Broadway hit musical—but chose to hire hundreds of British workers and film its two parts in the outskirts of London.
Smaller-scale projects, such as commercials and reality shows, also contribute to the migratory flow beyond borders. According to The New York Times, the game show The Floor left Los Angeles heading for Dublin, Ireland, because taxes paid in California exceeded the costs of sending its host and contestants across the Atlantic.
But these planes do not carry camera operators or sound technicians. The workforce used is local, which has left many workers in Los Angeles without contracts for long periods. “It’s a mass extinction,” Beau Flynn told the newspaper. He is the producer of “San Andreas,” a disaster movie set in California, although it was filmed in Australia.
According to FilmLA, the audiovisual promotion and regulation department of Los Angeles, recordings in the city have dropped by about one-third over the past decade, mainly driven by the relocation of reality show settings.
About 18,000 audiovisual jobs have disappeared in the country over the past three years, according to the union representing workers who perform technical roles on film sets.
Among the countries that are receiving more and more American productions are Canada—the home of “The Last of Us,” which is a good option due to its proximity to studio headquarters—United Kingdom, Hungary, Australia, and Romania, where “Barbie,” “Dune,” “Thor: Love and Thunder,” and “Wednesday” were filmed, respectively.
Many of them allow productions to include residuals – additional payments for reruns or distribution beyond movie theaters – and actors’, directors’ and producers’ salaries – those who receive the largest share of the payroll – in budgets eligible for tax credits, unlike the American standard.
Another extremely high cost in the United States is the medical plans for professionals. In a country without a public healthcare system, such as this one, the cost of hiring an employee can be seven times higher than in Hungary.
To complicate the American scenario, the actors’ and writers’ strike from two years ago led many studios to plan ahead and build infrastructure to record abroad.
Thus, there are several factors shaping tomorrow’s cinematic hubs, but none is as important as technology, believes Paula Landry, the researcher. In an industry that incorporates artificial intelligence into more and more stages of production, the paths to the future will likely be paved by robots, increasing the dystopian atmosphere in this new Hollywood.