Movie and television production firms are increasingly doing business outside the United States, prompting top entertainment hubs like Los Angeles to try to add high-tech soundstages and ramp up incentives to lure back studios.
The five leading locations where producers plan on filming projects in the next year are outside America, based on what 150 executives told industry tracking service ProdPro and interviews with industry professionals by CoStar News. California — the nation’s highest-ranking location on the list — placed sixth among regions where productions are set for the 2025-2026 filming season, followed by Georgia, New Jersey and New York.
The most preferred locations are Toronto, the United Kingdom, Vancouver, Central Europe and Australia, areas that offer the most production subsidies. Australia, for example, offers to pay up to 40% of expenses for big-budget productions, while Canada pays roughly 36%, outpacing the subsidies that are offered in the United States.
Los Angeles’ status as the world's entertainment capital has eroded in recent years as a result of the pandemic, strikes and growing global competition. Between 2017 and 2024, incentive programs — from tax credits to other subsidies — increased 39% across the globe, with a number of cities touting cheaper filming conditions to lure production out of California.
These days, 120 jurisdictions around the world offer production incentives, many of which are larger, more efficient and easier to use than California's program, according to Joseph Chianese, senior vice president of production incentives at Entertainment Partners. That Los Angeles-based company provides digital production management and finance services to the entertainment industry.
"Despite California’s unmatched workforce, iconic locations, and century-long industry leadership, it faces increasing competition from states and countries offering more robust incentives," said Chianese, a member of the California Production Coalition of entertainment industry stakeholders that recently formed to help attract more business to the state.
Los Angeles is among several United States cities implementing new and improved discounts and programs to ramp up production. California, meanwhile, plans to double its tax incentive this summer in a move expected to funnel some $3.75 billion in credits to the local film and television industry over five years.
What's more, developers are building several billion dollars of production real estate, from soundstages to offices, across Los Angeles to tempt productions with space more conducive to modern methods of filmmaking than existing older facilities.
Stay in LA
Diminished film and television production activity has affected the Los Angeles real estate market, with soundstage occupancy down 3 percentage points to 90% in 2022, prior to the devastating writers' and actors' strikes in 2023, according to Film LA. Declines in activity have also pushed entertainment companies out of Los Angeles office space, contributing to the region's current historic vacancy rate of 16%, up from 15% a year ago.
And now the most destructive wildfires in Los Angeles history have displaced thousands, including a number of film crew members. With housing costs rising and production work declining, many are questioning whether they can afford to stay in the city at all.
Local industry groups have launched Stay in LA, a campaign aimed at boosting planned film and television tax incentives. They are asking studios like Netflix and Paramount to increase local production as much as 10% to help Los Angeles recover from economic blows it suffered, a move that would increase demand for soundstages and other facilities. They're also asking Governor Gavin Newsom to revamp the proposed doubling of the California tax credit to include more kinds of productions.
"California must continue to invest in the future of one of our state’s signature industries to remain the entertainment capital of the world,” said Hackman Capital Partners Zach Sokoloff in a statement supporting the state's proposed tax credit increase.
The Los Angeles City Council unanimously approved his company's $1 billion planned transformation of the historic Television City studio property in Beverly/Fairfax last month.
Elsewhere in Los Angeles, Warner Brothers is spending $500 million to upgrade the 320,000 square feet of office and 16 sound stages at its Ranch Lot in Burbank.
And Echelon Studios, under construction in Hollywood, will be the first purpose-built studio complex in the city in over 20 years. The campus will feature four 18,000-square-foot sound stages. Construction is expected to finish by mid-2026.
California's planned boost in tax incentives might not generate enough activity to fill this new space. Among the faults producers find in California's plan, even with the proposed changes, are a relatively low 20% to 25% tax credit rate compared to the global average of 30% and caps on eligible expenses at $100 million, limiting the ability to attract blockbuster productions.
International appeal
The weak Canadian dollar compared to the United States dollar is making Canada one of the world's most cost-effective places to film. If proposed United States tariffs push the Canadian dollar lower, production costs could become even more attractive to American firms, according to analysts.
Film and television production spending in Canada was $5.4 billion in 2024, up 2.8% from 2022, according to ProdPro. British Columbia recently added a 2% bonus on high-budget productions spending $200 million or more in the province.
Vancouver-based Bridge Studios is building 20 new sound stages at Lake City Studios in Burnaby, British Columbia.
“With 36 sound stages up and operating by the summer of 2025, the Vancouver region of British Columbia will be an undisputed leader for filming outside of Hollywood,” said Ron Hrynuik, general manager at Bridge Studios, in a statement provided to CoStar, crediting exchange rates, synced time zone with Los Angeles, and bankable tax credits for the region's popularity.
The United Kingdom, meanwhile, saw its highest spending levels on entertainment production last year since the onset of the pandemic. Total spending on film and TV production hit $7 billion last year, up 31% from 2023, according to the British Film Institute. "Wicked," the top grossing film of 2024, was filmed in the United Kingdom, while productions from the "Harry Potter," "Supergirl" and "Masters of the Universe" series will film across the country in 2025.
Major United States studio and streamer-backed productions have fueled the United Kingdom's growth, with 65% of all film production spending in the country coming from the five major American studios and the country's three dominant streamers. Companies like Netflix, Apple, and Amazon increased spending on productions in the United Kingdom by 49% year-over-year in 2024, according to ProdPro.
The world is competing for film and television business as producers are focusing on quality over quantity.
The number of global TV and film production starts still lag pre-strike levels of 2022 by 11%, according to ProdPro.
Global spending on film and television content creation will increase 0.4% from 2024 to 2025, reaching a total of $248 billion, slower than the 2% growth from 2023 to 2024 when the actors and writers strikes ended, according to industry researcher Ampere.