Los Angeles (LA), California, famous as the birthplace of the movie industry, is losing its reputation. Recently, the U.S. entertainment industry has faced multiple crises such as soaring labor costs, a slowdown in the streaming market, and a shrinking DVD market, leading to large-scale projects in entertainment and film leaving LA to be produced overseas.
According to the New York Times (NYT) on the 20th (local time), Hollywood content that is not 'made in Hollywood' is increasing. Data compiled by Film LA, a nonprofit organization established to promote the Hollywood film industry, shows that programs produced in LA have decreased by more than one-third over the past decade.
In fact, the popular quiz show 'The Floor' season 2, which was released last September, was filmed in a studio in Dublin, Ireland, instead of LA. The disaster blockbuster 'San Andreas,' which is based on the California earthquake, was also filmed in Australia.
The NYT reported that European countries such as Hungary, the Czech Republic, and the United Kingdom are emerging as alternatives to the U.S. Producer Aaron Ryder, who produced films such as 'Arrival' and 'Dumb Money,' noted in an interview with NYT, 'Nowadays, when you go to a bar in Budapest, you can meet more industry people than in LA.'
The reason producers are looking overseas is the lower production expense. European countries have the state covering employees' medical expenses, and their minimum wage levels are lower than in the U.S. Added to that, with tax benefits, they have a much more efficient cost structure than producing in the U.S. Conversely, the U.S. has seen labor costs soar due to several large-scale strikes, worsening the production conditions.
As a result, workers in the film industry are not escaping the impact. According to the International Alliance of Theatrical Stage Employees (IATSE), approximately 18,000 full-time jobs have disappeared in California alone over the past three years. Josh Beers, a 25-year concept artist, stated, 'I participated in three films over six months, but all had their contracts terminated midway due to overseas transfer.'
Some among the workers are reportedly hurrying to get married, disposing of their dwellings, and even considering divorce to make ends meet, according to the NYT.
Industry officials and labor unions are urging a federal government response. In response, California Governor Gavin Newsom proposed an annual tax credit of $750 million (approximately 1.645 trillion won) for film production, and the state legislature is discussing a bill to increase the basic tax rate for film tax credits.
However, this bill has faced criticism for being ineffective, as it excludes actors and directors who receive high appearance fees from tax credits and sets the application period for tax relief too short.
Michael Miller, IATSE vice president, warned, 'If this continues, Hollywood will follow the path of Detroit, which was once the heart of the automobile industry but has now fallen.'