US unions sound alarm on production exodus amid federal tax credit push

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A new report commissioned by American unions and guilds has laid bare how runaway production has chipped away at Hollywood’s position at the epicentre of the entertainment business over the past 25 years.

The report, conducted by research firm EY, examined American TV and film production in three categories: primarily filmed in the US; primarily filmed outside the US; and partially filmed in the US. On the TV side, the report looks at episodes of 40 minutes or less that cost more than US$1m, or US$1.7m for longer episodes.

On the TV side, US studios have gone from making almost all of their TV production domestically at the turn of the millennium to taking 36% of their production spend outside the US, the report claimed.

In 1999-2001, 94% of the production budget for TV episodes from US studios was associated with significant US-based production. By 2022-24, that had fallen to 64%.

Over the same time frame, the share of US TV episodes produced primarily in America fell from 96% to 70%, while the number of TV episodes produced abroad rose from 4% to 30%.

In terms of the cast and crew working on those US shows, the number fell from 86% in 1999-2001 to 58% in 2022-2024.

The report does not specifically discuss the reasons why series and films have looked abroad, but the primary cause has been the generous tax credits and other incentives provided by jurisdictions including the UK, Canada, Australia and other European countries. As well, streaming services, led by Netflix, have over the past decade accelerated their commissioning of local-language shows and movies.

The report comes as the unions and studios, which were at war three years ago amid the writer and actor strikes, find themselves on the same page as they rally behind the introduction of a federal tax credit for film and TV.

For that reason, it is unsurprising to see both pulling in the same direction as they look to put further momentum behind the Motion Picture, Television, and Entertainment Revitalization Act, which was introduced in Congress last month. The bill, in its current form, calls for a 20% credit on US labour, with additional add-ons that climb to 30%.

The Motion Picture Association, which represents the streamers, also recently published a report claiming the federal incentive could double US production spending to US$38bn by 2035. The same report also said US production would remain stagnant, and actually decline slightly, over the next nine years in the absence of a federal incentive.

This latest report was conducted by EY on behalf of the International Alliance of Theatrical Stage Employees (IATSE), the Directors Guild of America (DGA), actors’ union SAG-AFTRA, the Teamsters, the Laborers International Union of North America (LiUNA!) and the Writers Guild of America.

On the film front, the EY study paints an even more dramatic production exodus. The share of major films produced in the US dropped from 75% in 1999-2001 to 36% in 2022-2024. Over a 25-year period, the amount of US film production has fallen 32 percentage points, according to the report, while the UK has increased 14 percentage points and Australia has grown by three percentage points. Canada was not included in this case study, said the report, because it saw a decrease in its filming budget share.

The analysis in the report focused on TV and film production and did not include animation, advertisements, news, live events, sports, reality programming and gameshows.