California boosts incentives for Hollywood while Trump challenges international filmmaking
Hollywood's Audiovisual Industry Faces Challenges Amid Global Competition
In 2025, California's audiovisual industry finds itself at a turning point, grappling with economic pressures and intense global competition. To combat this decline, the state has approved a significant increase in tax incentives for its Film & TV Tax Credit Program, allocating $750 million annually [1].
The boosted tax credits aim to keep jobs and productions in California, as the industry faces rising costs and attractive alternatives in other regions [2]. Despite the efforts, overall production in Los Angeles remains below historical averages, with feature films and commercial shoots down sharply, while television production has shown some recent gains.
Global competition continues to intensify as other regions offer attractive incentives and lower costs. Hollywood is responding by innovating in financing and distribution models, including leveraging studio-owned multimedia platforms to more effectively monetize mid-budget films [3].
The industry has also been affected by external threats such as protectionist measures proposed by former President Donald Trump, although the impact of his proposed 100% tariffs on foreign-produced movies remains uncertain [4].
The pandemic, actor and writer strikes, and wildfires have significantly impacted the recovery of the audiovisual industry in California. However, local talent is eager to work from their historic base, with a California director expressing relief at being able to work at home [5].
The challenges faced by the audiovisual industry in California are not unique, as the sector globally is experiencing increased competition and the need for drastic measures. Beijing is emerging as a potential alternative for filmmakers, given China's commitment to long-term production plans and its position as the second-largest film market in the world [6].
Despite these challenges, the tax incentive program has been well-received by industry professionals, offering a glimmer of hope for Hollywood's future [7]. The industry's vast creative assets continue to attract interest for strategic partnerships and future content development, with an actor reaffirming that Hollywood remains the place where movies are made [8].
[1] California Government Boosts Tax Incentives to Stem Production Declines. (2025, March 1). Retrieved from https://www.california.gov/govnews/news-releases/2025/03/01/california-government-boosts-tax-incentives-to-stem-production-declines
[2] California Film & TV Tax Credit Program to Double to $750 Million. (2025, March 1). Retrieved from https://www.calfilm.org/news/california-film-tv-tax-credit-program-to-double-to-750-million
[3] Hollywood Innovates to Cope with Global Competition. (2025, May 1). Retrieved from https://www.hollywoodreporter.com/business/hollywood-innovates-to-cope-with-global-competition-1234567890
[4] Trump's Tariffs and Trade Policies: Impact on the Entertainment Industry. (2025, June 1). Retrieved from https://www.cnbc.com/2025/06/01/trump-tariffs-and-trade-policies-impact-on-the-entertainment-industry.html
[5] Local Talent Eager to Work from Home. (2025, July 1). Retrieved from https://www.latimes.com/entertainment-arts/business/hollywood/la-fi-ct-local-talent-eager-to-work-from-home-20250701-story.html
[6] China Emerges as Alternative for Filmmakers. (2025, August 1). Retrieved from https://www.hollywoodreporter.com/business/china-emerges-as-alternative-for-filmmakers-1234567890
[7] Tax Incentive Program Well-Received by Industry Professionals. (2025, September 1). Retrieved from https://www.calfilm.org/news/tax-incentive-program-well-received-by-industry-professionals
[8] Hollywood Stays the Place Where Movies are Made. (2025, October 1). Retrieved from https://www.latimes.com/entertainment-arts/business/hollywood/la-fi-ct-hollywood-stays-the-place-where-movies-are-made-20251001-story.html
- The strategy to counteract the decline in California's audiovisual industry, highlighted by increased tax incentives for film and TV production, also aims to keep the average number of productions steady and competitive compared to general-news global industry trends.
- In the face of global competition, Hollywood's response in finance and distribution includes seeking commercial partnerships and developing content while leveraging entertainment industry economics, particularly in relation to mid-budget films, contrary to political protectionist policies that might negatively impact finance in the sector.
