The film and TV industry's spending habits are shifting, with New York and New Jersey gaining ground on California in the race to attract Hollywood's attention. California, once the clear leader, has doubled its incentives to keep production in-state, and it seems to be working. The Golden State's production spend inched up 5% year-over-year, bucking recent declines, and is seeing a rise in committed spend, indicating a resurgence in filming activity.
New York, meanwhile, has removed the cap on above-the-line qualified spending, fueling a 19% increase in filming count and a 57% surge in total production spend to nearly $1.06 billion in the second quarter. This is significant given the state's investment in soundstage space, with a 43% growth in inventory since 2020 and motion picture employment at 86% of pre-pandemic levels.
New Jersey, on the other hand, saw a decline in total filming activity but a major increase in production spend, attributed to a dip in feature film starts and a rise in episodic TV filming. The state has designated Netflix, Paramount, and Lionsgate as studio partners, offering long-term incentives to produce titles there. Netflix is building its East coast soundstage base in New Jersey, while Paramount signed a 10-year lease for 1888 Studios in Bayonne.
However, not all states are benefiting. Georgia, once a base for Marvel projects, has seen a 40% decline in filming activity and a 43% decline in production spend, slipping below New Jersey in terms of total spend. The state's incentive program, which has been described as competitive, may need to be re-evaluated to remain attractive to producers.
Incentives, according to ProdPro chief Alex LoVerde, are just one factor in a producer's decision. Other factors include experienced crews, infrastructure, great locations, and a place where talent wants to work. However, when productions are choosing between comparable markets, incentives can become the deciding factor. The key to a successful incentive program is offering a meaningful credit, enough funding, easy monetization, fast payment, and consistency from year to year.
As the industry continues to evolve, states will need to adapt their incentive programs to remain competitive. California's success in halting production flight suggests that doubling down on incentives can be effective, but other factors, such as crew experience and infrastructure, are also crucial in attracting Hollywood's attention.
