In 2023, the UK's film and high-end TV production spend hit a record £6.27 billion, largely fueled by incentives that saw Hollywood blockbusters choosing Pinewood over Burbank, according to the BFI Report. This investment occurred as Los Angeles saw a 10% decline in feature film production days, according to a FilmLA Report. Economic benefits now dictate where major projects film, marking a significant global shift.

Production incentives aim to foster local industry growth. However, they increasingly create a transient, globalized production model prioritizing tax breaks over stable, long-term regional development. This approach risks capital flight and instability for regions heavily invested in temporary projects.

Escalating global competition for film and TV production suggests a 'race to the bottom' in incentive offerings. This could lead to diminishing returns for host regions and increased industry instability, challenging the long-term sustainability of local film industries and impacting traditional production hubs.

The Global Hunt for Production Dollars

Independent producers prioritize incentive programs for projects over $5 million, with 70% citing them as a primary factor, according to the Indie Film Producers Guild. Major studios like Netflix and Disney also increase international production budgets, often due to tax incentives, as noted in their Studio Earnings Calls. This shift has altered traditional production models, moving away from established geographic hubs. Before recent state incentives, 'runaway production' cost California an estimated $3 billion annually, according to the Milken Institute. Financial incentives now primarily determine production location, decentralizing the global film and TV industry from its former hubs.

Billions at Play: The Scale of Incentives

  • 33% — Ireland's Section 481 tax credit offers up to 33% of eligible expenditure, capped at €125 million per project, according to the Irish Film Board.
  • $2.5 billion — Illinois's film tax credit program generated over $2.5 billion in economic activity and supported 20,000 jobs in the last five years, according to the Illinois Film Office.
  • $1.2 billion — Ohio's Motion Picture Tax Credit has attracted 150 projects since its inception, bringing in $1.2 billion in direct spending, according to the Ohio Film Commission.
  • €500 million — Ireland's film industry contributed €500 million to the national economy in 2022, a significant portion driven by international co-productions, according to Screen Ireland.