A coalition of entertainment unions has revealed a steep decline in U.S .-based production spending over the last quarter-century. This trend has prompted urgent calls for federal tax credits to combat the loss of thousands of industry jobs.
The Drop from 74 Percent to 42 Percent in Film Spending
The American film industry is witnessing a systemic reallocation of capital that favors international hubs over domestic studios. According to a report released by a coalition including the International Alliance of Theatrical Stage Employees (IATSE), the Directors Guild of America (DGA), and SAG-AFTRA, spending on motion picture production within the United States has plummeted from 74 percent to just 42 percent over the last 25 years.
This decline in domestic share occurred even as the total amount of money studios spent on films surged from 3 billion dollars to 7 billion dollars. The data suggests that while the industry is growing in terms of raw capital, the benefits of that growth are increasingly being exported to foreign territories.
How Streaming Pushed TV Spending to $8.4 Billion
The rise of streaming platforms has fundamentally altered the economics of television, inflating budgets while simultaneously offshoring the labor. As the union report detailed, total television production spending exploded from 933 million dollars to 8.4 billion dollars over the same 25-year window. However, the domestic share of that spending dropped from 94 percent to 64 percent.
This shift reflects a broader trend where high-budget projects—specifically television episodes costing at least 1 million dollars for short formats or 1.7 million dollars for longer episodes—are increasingly filmed abroad. The concentration of wealth in a few massive blockbuster projects means that the growth in total spending does not translate to a stable domestic workforce.
Senator Schiff's Warning on 42,000 Lost Industry Jobs
The human cost of this production exodus is substantial, with Senator Schiff highlighting that over 42,000 jobs have been lost as a result of this migration. Senator Schiff argues that American entertainment projects are being lured away by foreign governments that invest aggressively in their own film infrastructures to attract international business.
While some states, such as California, have implemented local incentive programs to keep productions at home, Senator Schiff asserts that these measures are insufficient. he is calling for a comprehensive federal tax credit, claiming that state-level efforts cannot compete with the aggressive financial lures and federal-level incentives offered by competing nations.
The United Kingdom's Rise as a Hollywood Magnet
The United Kingdom has emerged as a primary beneficiary of the U.S. production decline, leveraging expanded film incentives and cutting-edge facilities to attract major projects. This competitive pressure is evident in the rapid acceleration of offshoring; last year, approximately 45 percent of all U.S. films and scripted television shows were filmed outside the country, a sharp increase from the 33 percent recorded in 2022.
This migration of labor and capital threatens to hollow out the local infrastructure of the American film industry. As the United Kingdom continues to develop its workforce and facilities, the barrier to returning productions to U.S. soil becomes higher and more expensive for studios.
The Mystery Behind the 20 Percent Spending Decline
Despite leading the world in total production spending last year with 12.15 billion dollars, the United States is seeing its lead slip. As reported by the union coalition, this figure actually represents a 20 percent decline from 2024, raising questions about the sustainability of the current U.S. model.
Crucial details remain missing from the report, specifically regarding which "foreign governments" are currently the most aggressive in their poaching efforts beyond the United Kingdom. Furthermore, the report does not specify whether the 20 percent decline in spending is a temporary market correction or a permanent shift in studio strategy.
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