Full Breakdown
The Global Shift in Film Production: Analyzing Hollywood's Offshoring Crisis
4/13/2026, 8:58:53 PM
The Decline of U.S. Film Production
Senator Adam Schiff (D-Calif.) recently highlighted the alarming trend of U.S. film and television production moving overseas, resulting in the loss of over 42,000 jobs. At a gathering in Burbank, Schiff emphasized that foreign governments are aggressively investing in their own film industries, luring productions away from the United States. In 2025, 45% of all U.S. films and scripted television shows were shot internationally, a significant increase from 33% in 2022. Despite California and other states enhancing their production incentive programs, Schiff argued that these measures are insufficient without a federal tax credit to create a competitive landscape for domestic production.
The Competitive Landscape
The United Kingdom has emerged as a leading destination for Hollywood productions, with $6.97 billion in production spending in 2025, a 15% increase from the previous year. Major studios, including Walt Disney Co.'s Marvel Studios, have shifted their filming locations to the U.K., attracted by robust tax incentives and a skilled workforce. The British tax credit system offers a 25% refundable tax credit for qualifying productions, with no funding cap, making it particularly appealing compared to California's offerings.
Canada remains a popular choice for U.S. producers, benefiting from a federal incentive of 16% on labor costs, supplemented by provincial tax credits that can exceed 60% in some regions. However, Canada experienced a 13% decline in high-budget production spending in 2025, totaling $4.61 billion.
Eastern Europe, particularly Hungary and Germany, has also seen a surge in production spending, with Hungary reporting a 78% increase to $1.53 billion. Hungary's 30% rebate and purpose-built infrastructure have made it a competitive player in the global market. Germany has responded by increasing its cash rebate from 20% to 30%, further enhancing its attractiveness to filmmakers.
Official Statements & Responses
Industry leaders, including Joe Chianese from Entertainment Partners, have expressed that a federal incentive program in the U.S. could significantly boost domestic production. However, achieving bipartisan support in Congress remains a challenge. Schiff's call for action underscores the urgency of addressing the offshoring crisis to protect American jobs and maintain the country's status as a film production leader.
Criticism & Opposition
Critics argue that the current state of U.S. production incentives is inadequate to compete with international offerings. The lack of a comprehensive federal tax credit has left American filmmakers at a disadvantage, prompting calls for immediate legislative action to reverse the trend of offshoring.
What's Next
As the competition for film production intensifies globally, the U.S. film industry faces critical decisions regarding its future. The potential introduction of a federal tax credit could reshape the landscape, but it will require concerted efforts from lawmakers and industry stakeholders to materialize. The urgency for reform is clear, as the stakes for American jobs and the film industry’s global standing continue to rise.
