How Hollywood stopped making movies in Hollywood

Nothing new. When I was in college down in LA I lived in a very small town founded by stunt people. Probably 80% of the people there were in the stunt business. Every few months they were off to another state or country for filming. Hollywood is just for the studio execs now, everyone else flies to whatever country offers the best tax breaks for them to film.

They go to some pretty incredible lengths too, A friend of mine and his dad own a stunt company that works explicitly with semi-trucks. Pretty much every time you see a semi in a stunt in a movie it's either my friend or his dad driving it. They will ship these semi's to foreign countries instead of film locally because the tax incentives are greater than moving entire production companies around the world.

An interesting read but also feels like the rearranging of the deckchairs on the Titanic given the forthcoming disruption from generative AI in this industry.

I spent some time last month with a relative in the industry (camera operator and producer) and he already uses some very sophisticated AI to map out scenes and shots in gen ai full video before they shoot IRL. It's mostly a cost saving exercise as well as occasionally helping to improve the quality of the deliverable.

He is totally expecting that the next shift will be that gen ai video will become good enough to be considered the master (ie no need to film) and he is already transferring his skills as a camera operator into prompting and AI assisted scene design.

He knows that many different disciplines he works with will all compete for that prompting work and there obviously won't be enough work for everybody to go around.

The first part of this is using human actors in front of 360 video stages like The Volume [0] to display the sets (which was pioneered by The Mandalorian) and then ultimately the actors themselves will be AI rendered.

And at this point it doesn't matter where this is filmed.

I grew up close by to Pinewood Studios 30+years ago - I can't imagine them putting a lot more investment and development into that lot given where this is all going.

[0] https://en.wikipedia.org/wiki/StageCraft

The article repeatedly mentions how production moved to Atlanta due to tax incentives. Even that is a race to the bottom, as Disney moved production of Marvel movies out of Atlanta last year to the UK where they got better tax incentives. Even the undercutting cities are being undercut.

With a very few exceptions, I don’t watch anything made past 2016. Not sure what happened in Hollywood then, but it’s just seems that they are constantly making some sort of public service messages that they need to pay me to watch. Not the other way around. That goes even if I agree with some of the messages.

The cost of housing is probably the #1 reason and, in my opinion, California’s biggest problem.

California as a whole is still doing pretty well but high housing cost is slowly pulling out the rug from under the state.

But the California legislature does know that and has forced many cities to start building housing but there is still a lot work still in flight.

> The quintessential example of this is Broadway, where the cost of living in New York City increases, leading wages to rise, but there remains a fixed set of theaters for Broadway shows to be staged, thereby limiting revenue growth. The end result is economic unsustainability, as these productions either curtail spending by employing fewer people or pass higher costs along to consumers through ticket pricing, often both.

Adding more Broadway (or off-Broadway) theaters to increase revenue wouldn't really address costs; the additional productions would presumably have similar staffing costs as the existing productions, so ticket prices would need to be similar in order to recoup the costs. [1] But viewers would have more options and be less likely to pay the top ticket prices.

[1] Unless you're certain that the show would fail...

> For a major blockbuster, tax incentives equate to tens of millions of dollars, freeing up money for name-brand actors, elaborate set pieces, and unremarkable CGI effects.

Love the dig at the end.

>For studio executives, it means making do with smaller crews, outsourcing production overseas, and, eventually, using AI to replace some human labor.

Ah so this might be how "shorter working hours" looks on the ground. "Leisure and Culture"'s share of the pie has actually shrunk abit:

https://archive.md/2026.06.04-075622/https://www.theguardian...

That's world, not US, so it might also be that foreign production teams are not counted as "leisure and culture" in their own jurisdictions lol

Original pdf here, p11 https://globaljusticeproject.wid.world/www-site/uploads/2026...

I worked in Los Angeles doing animation and VFX software for 33 years, and left 5 years ago as the cost of living there made no sense, and my prospects for work became nomadic global chasing of work now taking place in countries with no or ignored labor laws. (As if labor laws are respected in the US anyway.)

Interesting in relation to the article, the author describes working out of the empty Warner Bros. lot; I lived across the street, right next to "The Starlite" (the author will recognize.)

Los Angeles and the entertainment industry's economics are brutal. My wife is exponentially more successful than I, a film she was the VFX producer for won an Oscar, she's an industry player, and still LA is too expensive.

My take on the problems including cost sickness:

1) Supply/demand. There's actually a shortage of quality movies relative to what the market will bear, one need only look at the occasional breakout hit like Obsession to see that it's possible to make a ton of money if you understand the demand signals.

2) Demand signals. Median age of someone with greenlight authority is ~62. In the 80s, there were 30-year-olds running entire studios. No disrespect to Boomers, but this business is about marketing cultural products and they have no idea about the culture. This also creates significant demographic headwinds in the job market.

3) Costs. Wages/COL are a part of it, as are unions, star power demand, and how companies like AAPL/AMZN can do streaming as a loss-leaders, which creates a lot of downward pressure. The biggest one is that in theatrical CAC > LTV. You can spend 2x your production budget on marketing and that investment evaporates the first week of showing – there's no real brand loyalty to studios/streamers, especially now that they've commoditized their IP and put it on rotation through the online platforms.

4) Originality. Franchises, sequels, and remakes were roughly three-quarters of 2025, and nine of top ten 2024 worldwide grossers were sequels. This is a result of local minima/risk arbitrage in the studio's portfolios, the bottom line is that people will still show up for a Spiderman movie even if its crappy b/c of the pre-aware IP and there's nothing better out there. There are wonderful exceptions to this of course, like Christopher Nolan and many indie films.

5) Politics. Hard to not deal with politics amidst the outrage cycle, but the easiest way to achieve that is to have a plurality of viewpoints – which you can get if you stop trying to bend beloved IP to contemporary politics and just make new shit!

Video game industry analysts are predicting the same is going to happen to their (my) industry. Contract out more and more work to SEA/China/Poland et.al. It's extra painful because games are relatively cheap to localize (fantasy is universal, it's just translating text and words), so studios based in cheaper parts of the world already have an advantage and they have access to the west markets. Global competition can be brutal.

It really breaks the illusion for me when a movie is shot where it isn't set. I'm like, "What? They don't have pine trees in Austin."

Blockbusters and tax credits started the trend, but green-screen filming sure accelerated it. Now that so many movies are almost entirely CG, it really doesn't matter where the green screen studio physically exists.

The silver lining (for Americans) is that Hollywood movies are still very Hollywood. Canadian actors, Canadian crews, and Canadian filming facilities all combine to make utterly American films. If real locations are used, they're carefully chosen so that Vancouver stands in for New York, Calgary for Minnesota, etc.. Canadian references, accents, and values are all carefully erased.

The one thing that seems to stay stubbornly American is the money people.

Explains why I have slowly stopped watching live action. I can't stand the cognitive dissociation that needs to happen for me watch.

Simple one light is different in NYC and Toronto.

When corporations grow to a certain size, they become banks.

The same thing kind of happens to industries when they get dominated by a few large players. The large players are banks. The core of the industry becomes a form of finance.

Hollywood is now the financial capital of the film industry, not where films are made. Hollywood finances films.

I absolutely don’t want to imply there’s any one reason that he led us to where we are. This comment isn’t to try to undercut or malign some great data and investigation. But an article on this topic that literally does not include the word union in the entire text is not painting a full picture.

You can fairly point out that unions still exist in Georgia, and that the UK and other European locations have robust worker protections - this isn’t a situation of union work vs. non-union work. But the extent to which unions in California have a stranglehold on the movie industry is absolutely part of the story here.

>"If this has all drifted into bummertown, it’s because many of Hollywood’s problems can be traced back to a single economic theory of everything: the rent is too damn high. From there, everything else starts to unravel."

It's really understated just how much this is behind absolutely everything today. The only reason it became normal for SV software companies to pay 100k+ salaries to interns in the 2010s is because half of that had to be handed over to a landlord every month just to have people physically able to show up to your office. This is why Europe and Asia have completely dominated production of all the great AAA games over the last decade; when creative people can afford to live somewhere, all of the sudden you have the resources to truly focus on a product.

Something interesting to note, is that while "Hollywood" is fast losing its status as the nexus of the traditional film / tv industries, LA in the broader sense is already very well established as the global (Well at least "Western") hub of the content creator economy. Literally thousands of wannabe / up and coming YouTubers, Tik Tokers and "Influencers" of all sorts are packing up their lives and moving to LA every year in order to be closer to each other, and to the talent pool of cast-off film and tv folks that live in LA.

The "Cost disease" seemingly hasn't yet infected that industry at least (Or the infection is still in its early incubating stage) though I think that's in large part due to the fact most of the content creators aren't working within the established industry framework, but rather are intentionally trying to work outside of it, in order to avoid paying union rates.

I saw a Trump clip not long after his inauguration where he said he was unhappy about Hollywood moving overseas due to tax cuts but so far nothing.

Like with manufacturing in China, allowing your competitor countries to build up expertise means at some point it become difficult to regain top place. And whilst bulk of the profits may flow back to the USA at present, may not always be the case.

It’s not like it’s been hidden, all USA needs to do is reduce the gap so financially there is no incentive to go abroad.

Great for other countries though.

In the next decade, AI will be gutting every industry associated with hollywood other than nvidia and tmsc.

Lots of things like this have happened.

Silicon Valley stopped making computers, or any kind of manufacturing. Who knows, maybe some black projects exist.

But I was told that some underground utilities in the area were non-standard, not just water, power, sewer, but also nitrogen or more.

To be fair: the quality of movies produced by Hollywood has gone rapidly downhill already in the 1990s. You only need to compare the movies Quentin Tarantino makes; now personally I think Pulp Fiction is still by far his best work, but I concede that the movies he created lateron were above average (though I would not go as far as many others, who'd rate these in the 8 to 10 point ranges; I'd go more between 6 to 7 or 7.5, largely because there are a few smaller issues cropping up and I always notice these when I compare them with Pulp Fiction, which was really good; actually really well-made).

I noticed this in the 1990s in many movies. For instance, Independence Day - the computer animation pissed me off. I found them bad. Even Terminator 2, where evidently many people say it was great, I was nowhere near as convinced; I found the first terminator better and more "logical" and more consistent, too. But things decayed quickly in the 1990s really. Even movies such as Avatar I find total garbage. And while I am not totally against superhero comic/marvel adaptations (I liked xmen and in particular Hugh Jackman as wolverine), these are always the same formula. Tons of CGI, big fights where nobody knows what is going on, very little thought elsewhere in that formula. There are exceptions, but by and large these things keep on happening. Individual directors manage to break out of the mold (Chris Nolan) but by and large movies really SUCK now compared to the "oldschool days". And while some of this may be due to me becoming more critical, the production quality just sunk. Take movies such as Megalopolis - this captures what is going wrong. It seems as if the whole movie industry has partially collapsed in the last +25 years and they don't really know what to do to change this. The same has happened to games, by the way. It is almost as if only one formula exists only now.

What about the woke movement and movies turning into politics?

Because of financial incentives. And it makes critics sad when films aren’t shot where their story is based. Saved you reading it.

I wonder if this will change as Hollywood is eyeing three $1B+ box office earners back to back to back this summer

I mean, kind of good maybe?

As someone not in the USA who loves movies, it is too easy to get sick of LA and desert locations everywhere.

Hollywood makes slop now, the last movie I saw was some iteration of Mission Impossible where the genius agent defeats the all powerful AI and that just felt like lack of imagination.