California’s film and TV industry is hemorrhaging projects as studios chase cheaper production, tax incentives, and remote workflows, and the exodus is reshaping where American entertainment actually gets made. This piece examines the causes behind the migration, how strikes and AI factored in, and what that means for Hollywood’s future without repeating or restating the same central theme.
I was listening to an episode of the Rob Lowe podcast Literally! featuring Adam Scott and was struck by a simple line that highlights a larger trend in production decisions. Scott revealed that Fox’s game show The Floor is filmed entirely in Dublin, which sounds odd until you hear the logic behind it. “It is cheaper to bring 100 American people to Ireland than to walk across the lot at Fox, and do it there.”
The detail about Dublin is telling because it points to a bigger shift: major productions are leaving Southern California in search of cost savings and incentives. After the pandemic shutdown in 2020, production briefly bounced back, but since 2023 work in the Los Angeles region has declined sharply. The region’s entertainment output is now at pandemic-era levels despite businesses being open again.
Studios are weighing bottom-line realities against long-standing public commitments from industry figures and unions, and their wallets are winning. A mix of generous foreign and domestic tax credits, remote-capable workflows, and the rising cost of stateside production has pushed executives to relocate shoots. The result: soundstages near traditional lots sit quiet while crews and content flow elsewhere.
The 2023 strike and subsequent negotiations altered production economics and accelerated change. New pay structures and contract terms introduced during that period made overseas shooting and third-party locations more attractive from a financial standpoint. At the same time, the pandemic permanently demonstrated that many parts of production—editing, animation, sound design, post—can be done remotely with lower overhead.
Streaming platforms also pushed studios into tough choices by demanding vast amounts of content while struggling with profitability. Outside of one or two giants, streamers have operated at heavy losses for years, which tightened budgets and prompted a search for cheaper production hubs. That financial pressure dovetailed with tax incentives in places like Georgia, New Mexico, New Jersey, and emerging markets in Texas and North Carolina.
The industry’s public political posture has not always matched these business choices, and that contrast matters in how insiders and the public perceive Hollywood. Many high-profile entertainers and executives champion left-leaning causes and policies, yet when the cost math favors leaving California, projects move. That contradiction is part of why the shift feels so stark to observers and locals alike.
Artificial intelligence became the most contentious bargaining point when unions and studios finished many other strike negotiations. Actors, writers, and voice artists sought protections against unregulated AI use, but studios quickly began experimenting with the technology to reduce costs and speed production. That technical fix offers savings, but it also threatens to democratize content creation and undercut traditional studio control.
Studios have already faced legal fights over AI and copyrighted materials and have begun making strategic licensing deals to protect their libraries. Meanwhile, negotiations over AI protections exposed a hard truth: the industry must adapt contractually and operationally while balancing creators’ rights and companies’ survival strategies. The choices made now will shape what work looks like and where it gets done.
There are proposals floated to reverse the trend, including tariffs on overseas production, but those ideas raise complex questions about who bears the cost and how mixed-location projects would be handled. For producers and studios, calculating liability and pricing across multinational shoots would complicate an already difficult business. Lawmakers and industry leaders would need clear formulas and enforcement mechanisms to make such measures practical.
Right now Hollywood faces a long list of interwoven challenges: tax competition from other states and countries, changes in labor costs and contracts, technology-driven workflow shifts, and the financial realities of streaming. No single fix stands out, and the industry will have to confront multiple issues at once to keep work rooted in traditional centers. The outcome will determine not just where movies and shows are made, but who benefits from the jobs they create.
Editor’s Note: California is the poster child for everything that is wrong with the Democrat Party and the “progressive” movement.
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