Hollywood Is Very Screwed

Hollywood—as in the place where physical, dedicated studios have existed since 1911, when Nestor Studios appeared on Sunset Boulevard, and as in the production companies in the business of making movies—is in growing trouble.

Whether this is going to be like Ernest Hemingway described the process of going into bankruptcy in The Sun Also Rises—“gradually, then suddenly”—remains to be seen.

But there are troubles. Serious ones.

Let’s start with the U.S. box office gross.

According to BoxOfficeMojo, in the first quarter of 2025, the take was $1,423,418,251.

But that’s off 11.6 percent during the same period in 2024 ($1,609,310,109) and 2024 was down 6.6 percent from 2023 ($1,722,455,494).

So simply it is $1.7 billion → $1.6 billion → $1.4 billion overall.

Movement in the wrong direction.

Which brings us to the physical state of moviemaking in Hollywood.

FilmLA provides “centralized coordination of multi-jurisdictional on-location filming permits in the world’s highest-volume film production region.” That would be, of course, Greater Los Angeles, which encompasses Hollywood.

As such, the organization monitors activities at both studio soundstages and locations outside of studios. (One of the reasons Hollywood became, well, Hollywood, is because of the consistent weather as well as the various terrain in the area, so outdoor shooting is important to the overall industry.)

FilmLA recently released its “Sound Stage Production Report.”  This report aggregates figures from operations ranging from Fox to Warner Bros., Paramount to Universal.  Seventeen studios in all.

In 2023, the latest it provides figures for, FilmLA calculated that the average soundstage occupancy was 69%.

When seen in context, that’s troubling for the studios: In 2020—the COVID year—the occupancy was 94%. In 2021 down a percentage point to 93%. Down three percent in 2022, to 90%. And then something of a cliff in 2023, a 21 % decline to 69%.

We should note that these figures aren’t for feature films alone, as it also represents TV and commercial productions, as well. However, stages that studios aren’t using also aren’t providing income.

When looked at from the perspective of total “On Stage Shoot Days,” things look dour for the studios: in 2022 there were 10,356 shoot days. Thanks in large part to the strikes the number of days for 2023 declined to 8,671, or a 16 percent drop.

Which takes us outside, to the on-location productions in Greater LA.

Here FilmLA found in Q1 2025 the number of shoot days was 5,295—down from 6,823 shoot days in Q1 2024.

Looked at from a five-year average, the number of on-location shoot days is down 33.8%.

Speaking to this issue, Philip Sokoloski, FilmLA VP of Integrated Communications, said, “California can’t afford to surrender any more work to its competitors.”

Key competitors FilmLA cites include the United Kingdom, New York, Georgia, and Ontario, Canada.

And FilmLA points out there are not only more competitors but the competitors are competing for fewer film, TV and commercial projects in production.

 So how bad is it for Hollywood as a place where movies are made?

Pretty bad.

In Q1 2025 (January 3 through April 3), BoxOfficeMojo has eight films leading the weekly box office (some, like Captain America, multiple weeks).

In chronological order there are:

• Mufasa: The Lion King. Filmed in greater LA? No. Locations included Kenya, Namibia, Botswana, Zambia, Tanzania, and Uganda.
• Den of Thieves: Pantera. The United Kingdom and Spain were main locations.
• Flight Risk. Nevada and Alaska.
• Dog Man. France. And Newark, New Jersey.
• Captain America: New World Order. Atlanta, Georgia and Washington D.C. (Additional fun fact: What studio was the forthcoming Thunderbolts* based at? Trilith Studios, in Georgia, the same place Cap was at.)
• Mickey 17. This is mainly shot at a Warner Bros. studio—the one in Hertfordshire, England. There were also some outside locations—also in the U.K.
• Novocaine. Set in San Diego. Filmed in Cape Town, South Africa.
• Snow White. Pinewood Studios in Buckinghamshire, London and forests in Germany.
• A Working Man. Another win for the U.K.: London and Winnersh Film Studios in Berkshire.

And the movie that is likely to be one of the top performers of 2025, if not the top:

• A Minecraft Movie. Canada (Vancouver, Calgary and Montreal) and New Zealand (Auckland, Huntly, and Helensville).

California governor Gavin Newsom isn’t indifferent to the loss of work being performed in Hollywood. So he’s supporting legislation to increase the tax credits the state provides to production work done in the state, such as increasing the annual cap on tax credits from $330 million per year to $750 million, and increasing the base rate credits for work done in L,A, from 20% to 35%.

Good things, right?

But consider this: Georgia has no annual cap on tax credits.

And California limits tax credits to below-the-line production costs (e.g., crew, equipment, and other operational costs) and exclude above-the-line (ATL) costs—like the salaries for actors, directors and producers.

Georgia doesn’t have an ATL restriction, meaning there’s a 30 percent credit for that, too.

In other words, if you’re producing a movie and want the top talent, that 30 percent ATL credit is very attractive—to say nothing of the fact of your own salary.

So even if Newsom gets the legislation through, doing work in Hollywood will be better, but not best.

FilmLA’s Philip Sokoloski:

“We’re supportive of state leaders’ interest in expanding California’s film incentive program, and we’re engaged in ongoing conversation with City and County partners about ways to improve the local filming environment.”

Sounds like weak tea while Georgia is serving up Southern Comfort.