In the film industry’s roughly 100–year history, Hollywood has thrived as one of its dominant hubs. Whether it is the apocryphal tale of Cecil DeMille’s The Squaw Man or the bog–standard Intro to Film class, it is generally acknowledged that for most of the industry’s existence, Hollywood has played a major role in its development, both in America and abroad.
This was, and continues to be, largely possible due to Los Angeles’ uncanny quality of producing cinematic trendsetters through such avenues as its globally ranked film schools—think of the University of South California’s School of Cinematic Arts or the American Film Institute and their stacks of influential alumni, as well as rival institutions UCLA and CalArts. All of these schools hold a top 10 position in TheWrap’s statistics–driven ranking of the nation’s top 50 film schools, and operate as high–quality factories that continually feed the film and entertainment industry.
Modern history has seen the City of Angels thrive as a filmic engine. It houses the headquarters of many production houses and studio lots, and hosts heaps of talent—from A listers to undiscovered waiters bussing tables, waiting for their breakout gig.
So what happens when this all starts to disappear?
It is for a multitude of reasons that Los Angeles is slowly starting to lose its reputation as a “place–to–be” in the film world. The city’s economic state isn’t great. The costs of basic necessities are creeping into unsustainable amounts for residents, having risen by more than 20% between 2018 and 2021. The COVID–19 pandemic exacerbated present issues, especially for businesses. For film studios, the impact was significant, as shoots were downsized or completely shut down. This provided a partial incentive to explore opportunities in less dense areas, who were willing to comply with the rise in business by providing hefty tax incentives.
The stressors of American life currently do not foster a condition that encourages creativity, something other nations provide. The World Happiness Report ranks the United States as the 24th happiest country in the world, a sharp decline from its position of 11th in 2011, and the second consecutive year of a record–breaking low. We cannot expect our creatives to, well, create, in a country becoming less creatively resonant.
In the wake of the rising popularity of global co–productions, America’s financial deterrents have made foreign locations a lot more viable, a situation massively attractive for casts, crews, and studios. Why shoot in the struggling metropolitan bustle of Los Angeles or the studio–swarmed Atlanta when the beaches of Southern America and Europe, or the flora and fauna of Asia and Africa are willing, available, and more cost friendly?
California and the nation at large face steep foreign competition, including Britain, Australia, and Canada, who continue to offer more aggressive financial incentives in light of growing concerns of complacency in the United States. These efforts have caused their film industry projections to stand in stark contrast to the United States, seeing some of their most impactful opportunities and profit margins over recent years. The United States has dropped down to the 4th in the ranking for film production activity, with India, China, and Japan occupying the top 3. Among emerging economies, countries like the Dominican Republic and North Macedonia have gained popularity, breaking into the top 20 per capita producers, showing the increasing capacity for emerging economies to create commercially competitive products.
As a consequence of the changing state of the film industry and America’s place in it, the film and television industries are experiencing a mass downsizing. Film production is generally expected to grow globally, so it is of note to see the United States, a long–time forerunner in the industry, experience the complete opposite.
The re–election of the 45th (now 47th) president of the United States of America , Donald Trump (W ‘68), has also placed a unique pressure on the industry, with his early slate of executive orders and subsequent federal prioritizations leading to globally consequential political change in foreign relations for the United States. In a specific response to the film industry’s issues, Trump announced plans to impose a 100% tax on foreign films in early May.
The news was met with confusion, mostly as a result of the fact that the president did not provide any logistics to illustrate how this tax would be imposed. The nature of the film industry calls certain forms of filmmaking and distribution into question: would streaming be affected as well? Which particular types of companies would be taxed as a result of this? Who ultimately fronts this bill? How does this tax affect the consumer?
Politicians like Rep. Lauren Friedman, a congresswomen who boasts years of film experience, and LA Gov. Gavin Newsom have vocalized their concern over the plan, specifically calling out the unnecessary vagueness, and have urged Trump to back policies promoting increases in tax credit incentives, something they believe would be less detrimental.
In an event of such rare magnitude, the state of film is shifting again, and the country seems late on the uptake. A great indicator would be the Oscars. Of its 10 nominees, this year’s Best Picture award featured two international films—Oscar–winning films I’m Still Here and Emilia Pérez—testaments to the increasing viewership of foreign films and a statement to American filmmakers’ willingness to work elsewhere.
Not all hope is lost though. This announcement by Trump has called attention to recent calls for higher film incentive and an ease of logistics within the national industry. The Los Angeles City Council has begun efforts to make LA a more filmmaker–friendly place to shoot, and Karen Bass, the LA mayor, has also pledged a large funding increase to the state’s film tax credit program in a vocalized effort to fight against a potential exodus of filmmaking activity to other states and nations.
New York, also a popular American film city, has announced concrete plans to increase film tax credit caps by more than 100%, historic highs for the state. Lesser known, but still fairly consistent presences like Georgia and New Jersey are facilitating nationally leading figures with their film tax credit programs. The United States is still the hotbed of film, and the world knows it, with an Oscar still being widely regarded as the most prestigious award a film, or individual, could receive.
The rise in foreign attractiveness for both individuals and businesses is apparent, but the United States does look to be left behind just yet. The industry is trying to save itself and avoid a fate similar to Detroit, when it suffered a fall from the heights of the automotive industry to being the largest U.S. city to apply for bankruptcy. And maybe these actions call to a more important consideration.
The film industry has become one decided by studio executives, individuals who seem to be out of touch with the sensibilities of American film (The Studio, created by Seth Rogan, uses this long–standing phenomenon as a plot point for its earlier episodes). But this mass migration of creatives calls to a general dissatisfaction with the American offer of a life in cinema studies. There are constant threats to cinematic jobs, with the latest strikes on the controversial use of AI by studios being largely met with criticism.
There’s still hope for those invested in filmmaking to be etched into its history here. Yet the rising popularity and appeal of other film industries are simply undeniable. We can only continue to create and observe in the ways—and places—that make the most sense for us, whether that be as a creative decision, or as a consequence of cost.
