Nothing new. When I was in college down in LA I lived in a very small town founded by stunt people. Probably 80% of the people there were in the stunt business. Every few months they were off to another state or country for filming. Hollywood is just for the studio execs now, everyone else flies to whatever country offers the best tax breaks for them to film.
They go to some pretty incredible lengths too, A friend of mine and his dad own a stunt company that works explicitly with semi-trucks. Pretty much every time you see a semi in a stunt in a movie it's either my friend or his dad driving it. They will ship these semi's to foreign countries instead of film locally because the tax incentives are greater than moving entire production companies around the world.
A few days ago I visited the little picturesque town of Hope, British Columbia. While driving down the Main Street, I saw a dozen chainsaw carvings of wildlife. I thought, why does that one look like Rambo? Found out the first movie was filmed there in 1982. The movie took place in the fictional town of Hope, Washington. When the movie begins, you see Sylvester Stallone walking into town under the real “Welcome to Hope” sign that was in the Canadian town at that time.
According to this article about 1/3rd as many movies are made in LA since the 90s. They were only making 30% of films in LA in the 90s so your experience still matches with the data but having 2/3rds of the local film production move elsewhere is significant.
This seems inevitable for most industries in the US (car/general manufacturing)
1. City/region becomes a boom-town based on a new high profit-margin industry
2. As that region becomes more wealthy, labor increases in price, thus there is more incentive to seek labor/resources for that industry outside the city/region
3. City/region hollows out of middle-class level jobs for the industry, retains ceremonial labor and executive offices.
Aging myself here but growing up in a "movie set city" (definitely not LA) in the 90's meant getting rerouted on the way to school because The Wire needed our block again. It's funny to see how the article shows this wasn't just a local annoyance back then, but an early sign of a much bigger, long running shift in where and how Hollywood actually makes movies.
NCIS used to use my English department building at University as their Hospital. Star Fleet Academy in one of the Star Trek movies was the front of my school's library.
Considering how much they did there it wasn't nearly as inconvenient as you would think. The school had a good process in place for controlling the chaos. It's still weird watching the movie and seeing my old library in it.
Shooting in Baltimore for a story that is about Baltimore is different than shooting in a different city as a stand-in for the city in the script though. That's just normal location shooting.
An interesting read but also feels like the rearranging of the deckchairs on the Titanic given the forthcoming disruption from generative AI in this industry.
I spent some time last month with a relative in the industry (camera operator and producer) and he already uses some very sophisticated AI to map out scenes and shots in gen ai full video before they shoot IRL. It's mostly a cost saving exercise as well as occasionally helping to improve the quality of the deliverable.
He is totally expecting that the next shift will be that gen ai video will become good enough to be considered the master (ie no need to film) and he is already transferring his skills as a camera operator into prompting and AI assisted scene design.
He knows that many different disciplines he works with will all compete for that prompting work and there obviously won't be enough work for everybody to go around.
The first part of this is using human actors in front of 360 video stages like The Volume [0] to display the sets (which was pioneered by The Mandalorian) and then ultimately the actors themselves will be AI rendered.
And at this point it doesn't matter where this is filmed.
I grew up close by to Pinewood Studios 30+years ago - I can't imagine them putting a lot more investment and development into that lot given where this is all going.
1. Stagecraft/virtual production is a thing, yes, but the backgrounds are not "AI rendered," they're 3D scenes built in Unreal. They have to be, because they need to dynamically react to the camera moving to create parallax.
2. Yes, some people are using AI to plan scenes. With respect to your relative, those people are not the ones getting hired on large projects. When someone is hired in the film industry, they're hired for their specific taste, creative eye, and opinions. That contribution is literally their whole job. Outsourcing that task to AI is, within the industry, seen as an indication that someone is inexperienced or simply bad at their job.
Crews don't want to work for those people, and audiences don't want to watch content created that way.
3. It's easy to "expect" that "one day" AI might become the way movies are captured if you don't actually understand the limitations of AI video generation versus the demands of filmmakers and the expectations of audiences.
Putting aside the obvious stuff like continuity, shot duration, and resolution...GenAI is not color managed, it's not physically accurate, the results can't be copyrighted and it struggles with anything not in its training data (I.E., genuinely new ideas.)
This is NOT to say that this technology has no future in the film industry, obviously it does. But half the movies at the Oscars last year were shot on film, so the notion that all filmmaking is just going to turn into pixel soup being generated from prompts is just hilarious to everyone actually within the industry.
Stagecraft is just one implementation but you don't think that the Unreal 3D worlds that are used behind it are beginning to be generated with AI?
You're right that my relative probably isn't going to be at the top of the list to be hired for that work. He doesn't work in Hollywood level stuff and I also think that he knows he's going to have to fight to stay relevant and compete for the work that's available to him. Fortunately he's at the end of his career and his kids are adults. I think he can see the writing on the wall for his career either way.
Color management and maintaining context across multiple renders is actually the conversation we were talking about and the software that he is using has mechanisms to define context across a rendered shots and even across multiple projects. He just wasn't using them as it's an alien concept to him. My point is all of that is possible and solved and will become easier as the market matures.
I also have a friend who was significantly involved in Odyssey and I think the reason why so many films are made with film at the moment is because the industry is clinging on to what it believes is authentic when being pushed towards a commoditized race to the bottom.
As people stop paying to go to the cinema and Netflix demands tighter and tighter budgets for work, I think we will sadly see the end of this means of production because fewer and fewer people will want to pay for it.
The end goal of all of this is actually customized content where the film that I see and the film that you see is different because it's rendered to our tastes. There's a whole school of thought there around a collective experience versus an individual experience, but the technology will allow it if it's completely digitally created and one would assume that will be where it will go.
In other words, I might want Odyssey but framed as a horror filmed in noir and you might want Odyssey framed as a rom-com and the AI will just generate the version for us based on the original directors prompt. I actually think that's kind of sad, but that doesn't mean that isn't where things are going.
Your last sentence there seems a little too 'high fantasy' for me. People want a shared experience. Talking about the Odyssey and saying "I liked it, but with the rom com lens" is not a unified experience. Also it kind of shits over the director's vision, which they probably won't stand for. The whole point of art is a framing of an idea. If you add these different lenses, you remove the framing; they become distinct things in and of themselves.
> Stagecraft is just one implementation but you don't think that the Unreal 3D worlds that are used behind it are beginning to be generated with AI?
They are not. Source: I have run one of these LED volume studios for 4 years.
> Color management and maintaining context across multiple renders is actually the conversation we were talking about and the software that he is using has mechanisms to define context across a rendered shots and even across multiple projects. He just wasn't using them as it's an alien concept to him. My point is all of that is possible and solved and will become easier as the market matures.
These problems are solved...ACES, DRT, FDL, etc. exist, are open, and AI companies are welcome to utilize them. But for some reason, they don't (or can't.)
> I also have a friend who was significantly involved in Odyssey and I think the reason why so many films are made with film at the moment is because the industry is clinging on to what it believes is authentic when being pushed towards a commoditized race to the bottom.
The reason people are still shooting on film is because it forces you to slow down and think about every decision, because mistakes become very costly. The decision to shoot on film objectively does not make technical sense, and studios would much prefer people shoot on cheaper digital cameras. But filmmakers still use it because of the specific creative mindset it requires of you.
> The end goal of all of this is actually customized content where the film that I see and the film that you see is different because it's rendered to our tastes. There's a whole school of thought there around a collective experience versus an individual experience, but the technology will allow it if it's completely digitally created and one would assume that will be where it will go.
The end goal...for who? Totally fine if this is something you want and interests you, but unless you have a time machine, this is just speculation.
Who cares about Oscars? It's about sales and mind-share. Ticket sales still have not recovered to pre-COVID levels, and they were already in a severe downward trend before the pandemic.
The trend is that increasingly, the entertainment people consume comes from small-time creators. And these small creators have thus far had very little capacity to create truly visually appealing content and take on more ambitious works. And still, they've been taking mindshare from the movie industry.
Increasingly sophisticated experiences are becoming possible for these creators via AI tools. Where do you think this is going? Keep on laughing it up at your award ceremonies, but the audience is moving on.
Sure, but saying that AI is the magic bullet to solve this is completely speculative. If and when a fully GenAI film is released and performs well at the box office, than I'm sure the industry will align itself to the new direction. But pretending like that situation is an inevitability is just wishful thinking...any number of things could, or could not happen.
The future is probably not 100% generated, but probably a mix of generation + animation + motion capture. AI is not going to be able to replicate the deep and affecting performances you get from humans—I fully believe it can recreate some aspects of the visual arts, but no way is it going to get to the point where it will be the best of the best. It may become good enough, which is a thing and will make an impact, but I think creatives will still want that kind of control.
And when we see the edges of that control, people will be interested in seeing things that make it "the old way," part of the reason you see a lot more practical effects these days, and I would include the background-in-unreal backdrops there, because they read as more real than actors in front of a green screen—for reasons that are totally unconscious unless you are highly trained in the differences.
While I do think gen AI is going to change how movies and TV shows get made, anyone telling you it will be a whole hog replacement has not studied the history of multimedia and probably hasn't made anything that required a high-level of vision themselves.
With a few notable exceptions (James Cameron) the film industry is largely unconcerned with "possibility." I think this is often why there is such a big misunderstanding from tech folks about how movies are made, since tech is very feature and tool driven whereas filmmaking is very much process-driven.
The Odyssey was shot on IMAX cameras half the size of a car that weighed 400lbs. It's easy to call that out as being ridiculous, surely a much smaller camera system could have achieved 99% the same results, etc. but that totally misses the point. Nolan could have shot it on anything he wanted, and he chose the less convenient way, because that is his process. If he was forced to use a more reasonable camera, it would not have been a Christopher Nolan film.
Sure, I'm down with that mix of generation + animation + mocap workflow. But at some point, people will going to look around at all the equipment, the people in mocap suits, the thousands of hours of generation and the millions of dollars of compute, and just wonder...wouldn't it be easier to just film someone with a real camera?
> half the movies at the Oscars last year were shot on film, so the notion that all filmmaking is just going to turn into pixel soup being generated from prompts
> audiences don't want to watch content created that way.
I want to point out a couple things. Not that I'd assert that you're wrong in basically your whole post. But...
Filmed movies and normal television programs aren't competing only with other content coming from (so-called) 'Hollywood studios.' They're competing for audience attention with all content, and to be thorough with any other activity people might get up to. The potential damage to (so-called) Hollywood is equal in these two scenarios:
1. 50% of films and TV shows shift production to AI-first: They use no real shots, they just motion capture a few actors and use AI and Unreal sets built primarily with AI and put the whole thing together digitally.
2. Of the time per week that people today spend watching films and TV, people shift 50% of that time to watching cheap, often-AI-produced junk on TikTok. Or for that matter, it doesn't even need to be AI-produced junk - it could just be influencers screwing around / ranting / doing sponsored content / etc.
Either way we lost 50% of the jobs. As for whether audiences want to watch that content, I'm starting to be concerned that we (human consumers) have lost most of our control here. Most people today consume content in a few ways:
1. Algorithmic feeds show us content, one item at a time, decided by a platform owner (Meta, Google/YouTube).
2. Streaming services. Again, algorithmic. You have to scroll like 12 sections down to get to "Resume Watching" - past 11 other carousels of What Platform Owner Wants You To See
Distant third: Movie theaters, but people usually go specifically to see a certain film. What movies you even know about hinges on either a platform owner deciding to show you a video discussing a movie, or ad spend. And some people block ads, and most others try their best to skip them - this is a far cry from the 90s, when movie ads were a staple of every commercial break. I used to at least know of every film in an 8-screen theater at all times, able to give a brief synopsis of the premise, just based on the linear TV advertising I saw.
Anyway just a long-winded way to say, don't underestimate the power of platform owners to force-feed us AI garbage and artificially generate "demand" if they decide that it's in their interest to - and this is exactly their playbook due to the cost savings potential. Same reason Spotify started padding their first-party playlists with AI slop.
A lot of people, especially left leaning and young people, are very against any AI use and especially for AI pictures or video. For them it's very cringe-worthy. So that would all need to change somehow.
Remember that a lot of the people driving opinions on stuff are the artists that would be displaced by this technology.
Also... Actors aren't hired based on acting skill. AI can't replace the notoriety part of why studios hire actors.
I was at a Brazilian restaurant in the US that had TVs showing a well-known Brazilian singer/guitarist performing, and the middle-school-aged kids at the table next to me were discussing whether it was AI. It was clearly not, to me, but it seems to be getting hard for the next generation to tell it apart. I think they will be craving authentic experiences, but also willing to accept inauthentic ones when they do not have the money for the real thing.
I think you're right. I think there will be a giant "tock" back to real experiences. I'm 37, and the internet was new and novel during my formative years, so we flocked to it. Now, as it's becoming the old new thing, internet fatigue will lead to more and more "offline experiences." At least, it already has started to for me.
Things change, and people forget why they were ever any other way. There are definitely resistance forces, but when the overton window flips, people just accept the status quo again.
Once it’s good enough no one will care. A green room in Atlanta can become Venice Beach.
Actors will still be in demand, at least leads and most speaking roles. 3000 extras, that’s going to be AI.
My hope would be this allows for hyper small budget shows to rival what takes millions today. Maybe we can actually get some creative stories instead of Marvel slop fest 43
> My hope would be this allows for hyper small budget shows to rival what takes millions today.
No way. Small creatives will go elsewhere. Unless the structural "winner takes all" economy changes, small players will have no chance, especially when they have to use monopoly expensive tech.
Good writing already left hollywood, hollywood is already repetitive reboot factory.
> YouTube starts shoving AI generated shorts into my feed every time I login
> Accidentally click every once in a while or out of perverse curiosity
Tech Industry logic: revealed preference shows that despite user's "legacy content preference signals" via ad partners, AI slop clickthrough has increased 500% this month, increase recommendations to 3/4 of timeline surface accordingly. Their hypocrisy has also been noted.
> AI can't replace the notoriety part of why studios hire actors.
I mean it probably can if a few famous actors license their likeness to be used in AI films. And it's probably only a matter of time until fully AI actors get marketed and licensed for use in AI films. I don't see a fundamental reason why AI actors couldn't build the same kind of notoriety and following.
As someone who originally comes from a field that cannot be consumed by AI anytime soon (food service. AI can't actually be eaten) it's insane watching tech-dorks think "nobody actually cares about what they buy, which is why they will suck down all this slop because ultimately they just want output".
Some of us remember the story of the Luddites and hope that this time might be different with 200 years of social progress.
Honestly I don't really see use of AI in films or music any worse than use in say programming. Actually even less so. Output is fixed and much easier to verify. So if it is reasonable and it sell why not go for it instead of expensive way things are now done.
I hope you’re right because I like the film industry a lot. But I worry this will be a repeat of the model versus cgi thing where many of the purists were converted by the cost to get the picture they can seen in their minds get made and seen by the masses.
> He is totally expecting that the next shift will be that gen ai video will become good enough to be considered the master (ie no need to film) and he is already transferring his skills as a camera operator into prompting and AI assisted scene design.
Yes. Asian drama is already there.[1] The first AI-generated Asian vertical-format drama was released in November 2025. Now, about 400 new ones are released each day. The tools are online, and you can sign up for a few dollars a month.
Quality varies widely. The visuals are now quite good, but chatbots used to generate screenplays still have trouble holding the plot together. Much of this stuff looks like fan fiction authors are at the controls. When someone competent is driving, the results are quite good. Cost is about 10% of live action.
Hollywood probably has less than three years to live.
Can you link to a high quality example of a short drama?
The article mentions ShortMax's "Too Late! The Daughter of Olympus Forsakes You" and NetShort's "One Move God Mode". I found something on YouTube for both, but there's zero chance what I saw was Hollywood level quality (unless you really hate Hollywood movies!)
I still don't understand why there's such a race to the bottom.
If they don't want to make a movie properly, why make it at all? The corner cutting across the board has become so bad that these movies are unwatchable.
This isn't even a new problem. A lot of traditional CGI can still be bad enough to ruin the illusion when it's the state of the art and a lot of attention to detail went into it. We've been circling the drain for decades. I suspect this is why everything became superheroes for a while. The illusion doesn't have to be good to meet that low of a bar.
If the goal is to be as cheap as possible, you might as well release the story as a picture book written by AI.
> If they don't want to make a movie properly, why make it at all?
Hollywood moves have little to do with art or even entrainment for that matter. They are simply revenue generating machines. Rich people invest in a movie production and expect a return. Hollywood moves don't take artistic risks anymore which is why franchises have become such a big thing. If it make money before, it will probably make money again. Even if it's bad, fans of the last movie will buy a ticket just to see. If it's bad, well, you have their money already!
It's pretty similar to Silicon valley these days. The technology is just a vehicle to produce a return on VC money.
It's the same forces driving software quality to the bottom. Simply put, enshittification has become the expected norm and there is more money to be made pushing out barely acceptable slop than the higher effort(and cost) of better made stuff.
Also, it's not exactly that the higher effort, better quality stuff is gone as it's been drowned out by the slop. Higher quality things are still being made(e.g. The Odyssey which uses minimal CGI), just much smaller as a percentage of overall.
Earlier unit economics of slop were roughly comparable to higher effort output. It was cheaper, but not dramatically so to push out crap code, so the volume of slop was a bit lower. Now, low effort slop is genuinely low effort due to AI, so the economics work out even accounting for the lower adoption and higher complaints from the users.
Time will tell if this is a temporary phase, or the new, bleak normal.
We've had low effort fraud for all of human history. We absolutely need to revise our definition of fraud to include AI slop. People need to wake the fuck up.
Nobody would accept a low quality product under any other circumstances, so why is AI different? We only have this large scale fascination with it because so many people are completely uneducated in computer science and have no clue how it works or what the limitations are.
What will probably happen is that they'll buy the rights to use faces of famous people (actors or not) and use AI (or cheap actors) to do the real scenes.
Expensive movies are liked because they look impressive much more so than cheap movies. Say Titanic in past. Or Lord of The Rings. If AI can do the same they don't actually care if it was expensive or not.
The article repeatedly mentions how production moved to Atlanta due to tax incentives. Even that is a race to the bottom, as Disney moved production of Marvel movies out of Atlanta last year to the UK where they got better tax incentives. Even the undercutting cities are being undercut.
The whole tax incentive business is a big race to the bottom. Sports teams also abandon their taxpayer funded stadiums once somebody else offers a better deal.
Sports teams are an interesting one because often times these things go on the ballot and people vote for that. So it looks like people and municipalities have varying reasons for keeping a team. That said sometimes it just doesn’t make business sense for a team to stay and other times a municipality decides it’s not worth the cost to keep a pro team.
In the case of the Chiefs, Jackson Co., MO voters voted not to fund a new stadium.
The reasoning was pretty simple: the Hunt family is worth $25 billion [0]. They could likely pay for any sort of improvements to Arrowhead, or to replace it altogether, without taxpayer funds, which comes from people in a metro area where the average income is on the lower side of things in a time when costs for everything keep going up.
On the other side of the state line, Kansas lawmakers specifically targeted the goal of moving two professional sports teams to the state using public funds called STAR bonds.
The end result is that the Kansas City metropolitan area will be spending, in total, about $3-4 billion to give the Hunt family a new place for their sports team to play, likely far away from the city center, and that Arrowhead needs to be torn down, which will cost at least tens of millions of dollars, once again, at taxpayer expense.
$3 billion could probably build out a real public transit system for the KC metro.
The crazy thing is that the best case is that the city will hopefully break even i all the promised benefits materialize. In most cases they don't. I bet if they hired a good VC to invest the same money into maybe 50 startups they would have a much higher change of a good ROI. But then the same people who accept sales tax increases for the sports team would probably be complaining about the tax burden.
I also don’t like subsidizing sports teams. To me it doesn’t make too much sense. Yes I know fans can be pretty loyal and sometimes that team is sort of like a pet dog. They love it through highs and lows. It’s something that can provide some identity to some as well as live vicariously through them. I get it but I feel sometimes you gotta let boyhood ideas and dreams go.
But hey sometimes people vote for their teams to stay despite the negative monetary ROI.
We have funny examples a little bit like "imagine FC Barça moving to Madrid" in the US. Used for comedy (but these are all real examples) from the opening monologue of the film BASEketball
> The Minneapolis Lakers moved to Los Angeles, where there are no lakes; the [Houston] Oilers moved to Tennessee, where there is no oil. The [New Orleans] Jazz moved to Salt Lake City, where they don't allow music.
Other names like that are
- the Baltimore Colts (named for Maryland's thoroughbred racing tradition) moving to Indianapolis (more known for open wheel auto racing),
- the Vancouver Grizzlies moving to Memphis, Tennessee (which never had Grizzlies even in the post-glacial period)
- the Brooklyn (Streetcar) Dodgers moving to Los Angeles in 1958 right when the LAMTA took over the few remaining street car lines before replacing them with buses in 1963.
The closest thing I can think of in European sports, and it's a stretch, is cycling teams. I picked this teams as the first example I could think of, not because it's some egregious example:
The parallel is that the name changes make tracking that team a real ship of Theseus problem: if the name, sponsors, riders, and staff turn over, is it worth calling it the same team? Similarly, if a football team changes cities, names, personnel, and owners, is it worth calling it the same team (Houston Oilers, Tennessee Oilers, Tennessee Titans)?
It's a little weird but the teams and the sports leagues are basically just corporations that engage in show business. They have no real connection to where they are located.
I just saw the new Spider-Man movie and there were a ton of notices about Canada-based film credits and from various provinces, too. I'm not sure how these credits work, but maybe spreading the work out to various tax incentivized areas is the current play.
I mean, the VFX part of the Film industry (and actual location shooting to some degree) has been chasing subsidies / tax credits since around 2002 with the Harry Potter movies that mostly were shot and produced (and more specifically the VFX were done in London, rather than in California) in the UK.
Since then Canada and the UK in particular (and NZ and Australia) have had various different fluctuations in subsidies for various parts of filming / doing post-production of movies over the intervening years.
What has yet to be mentioned is why Hollywood, in the first place?
Out of the many reasons, one is quite simple: daylight. This used to be really important with film.
Historically, this was why efforts to move filming to somewhere like 'Scunthorpe, UK' didn't really work, despite tax fiddles, because you need light and some places just don't have it.
But this doesn't matter now, because film has moved on, there is no need to have a massive glowing unshielded nuclear fusion reactor, 93 million miles directly overhead, just to get some lens focused on some bits of silver halide.
My understanding is that an important consideration at the time was that it is very far from New Jersey.
Edison had a lot of early patents for film, and wanted to monopolize the industry.
Film makers in California were far enough away that it was inconvenient for Edison to sue them, both because it required sending people there in person, and because the district courts were favorable.
The irony here being that Netflix is currently in a massive layout to build a studio in NJ (like, 20 minutes from the old Bell Labs). Almost feels like giving that troll the finger!
Much of the VFX and CGI industry is already in India.
Movies and shows like Inception, Interstellar, Ex Machina, Tenet, Dune 1&2, Odyssey, Chernobyl, Foundation, and The Last of Us were VFXed in large part by Indian companies like Prime Focus, Makuta, Phanton, and their subsidiaries.
A number of these overlap with HPC and Distributed Systems with a number of major players in the space coming out of the GPU design space like Raja Koduri (AMD, Apple, Intel). Nvidia, AMD, Intel, Apple, and others having dedicated GPU design teams in India since the early 2000s also helped.
Tax incentives these days include transferable tax credits. Even if your net tax rate was 0%, you can sell the credit to someone else, typically a bank. IOW, states and countries give you money, not simply give you a tax rate break.
Hollywood accounting rules are regular accounting rules (GAAP). The only reason “Hollywood accounting” is a thing is because of a bunch of actors who didn’t know the difference between “gross” and “net” points got screwed over.
Everyone involved still pays their taxes, but the special purpose vehicle used to organize the production is essentially a passthrough entity.
If you’re not a name, you’re not getting gross points. There’s a wide swathe of participants (actors, writers, directors…) who need to demonstrate risk by taking net points to get signed, and they are routinely screwed by tactics like artificially inflated self-dealing distribution fees that cause the “production” itself to show a paper loss while the IP has generated hundreds of millions of dollars more than has been invested into it.
Movie Money
Understanding Hollywood's (creative) Accounting Practices
9781879505865
This is THE book on the subject.
There's a lot more to it than that. Sometimes productions get creatively charged by the studios costs that may not be directly related to shift losses. Sometimes contracts redefine common terms so your points structure is completely misleading.
I presume that what happens is if a movie is too profitable, other business expenses are shifted to the ledger to reduce the profits. This works because a movie is not a separate accounting entity.
There's also a separate LLC for the parent production company. The production company LLC can also send invoices to the individual movie LLC for services. People can get creative with production companies "overcharging" for various expenses back to the movie's LLC but whatever creative accounting they want to do still needs to ultimately satisfy IRS scrutiny if there's an audit. There are entertainment attorneys that specialize in movie LLCs.
Why would that matter if it's all still a subsidiary of Apple/Amazon/Disney/Comcast/Netflix/Sony?
The relevant taxing authorities would be concerned with the parent companies' financials, not the subsidiaries. Moving money from right hand to left hand doesn't change one's tax liabilities.
"Hollywood accounting" only refers to civil disputes due to insufficiently defined contracts between two businesses (usually actors and producers).
The benefit of “Hollywood accounting” isn’t necessarily tax avoidance; that’s what the tax credits are for. Rather, “Hollywood accounting” provides a way to avoid paying profit-based compensation.
With a very few exceptions, I don’t watch anything made past 2016. Not sure what happened in Hollywood then, but it’s just seems that they are constantly making some sort of public service messages that they need to pay me to watch. Not the other way around. That goes even if I agree with some of the messages.
There’s definitely didactic art made post 2016, but I wouldn’t write everything off beyond that date forever. Online review aggregators are less reliable for recent movies, so you might want to find individuals that you trust for >2016 recs, instead of algorithmic scores.
I actually view 2012-2020 as peak “PSA messaging” era more, which a lot of people would probably coincide with the liberal optimism from Obama and course-correcting anxiety of Trump term 1. I think since covid Hollywood has “toned it down”, because the US has by and large
moved on from that social phenomenon.
I’ve been in Los Angeles for over a decade, and I disagree with the premise that Hollywood has some overarching plan to shape how we think— more people watch TikToks than movies and network TV. I view Hollywood, and the creators/writers/producers of films themselves, moreso holding up a mirror reflecting the current circumstances we’re in rather than manufacturing it out of nowhere.
I'd say it is the size of the population, far far too many people try to make it in Los Angeles without any specialized educations, so the car washers have 40 people that dry your windows, and the wait staff jobs are exponentially Orwellian. When I finally moved away, I was living over an hour away from Santa Monica, paying $4K a month for rent, and the entire neighborhood lights up every night like a gangsters' paradise. Street racing, graffiti everywhere, sidewalk food vendors everywhere, the local high school kids are covered in tattoos, including their faces. No thank you.
Over an hour away and paying $4k for that? I'm guessing you were renting an entire house. If we were talking 1br apartments you could be in santa monica for about half that today.
I don't think you can argue that California is significantly worse off in terms of housing than London, which is where a large number of productions go due to tax incentives.
Yeah, that's fine too. If it weren't fine, there wouldn't be increasing demand. If it became too lopsided and thus expensive to live there, it'd become less desirable. CA has plenty of cheaper cities too.
> For a major blockbuster, tax incentives equate to tens of millions of dollars, freeing up money for name-brand actors, elaborate set pieces, and unremarkable CGI effects.
> The quintessential example of this is Broadway, where the cost of living in New York City increases, leading wages to rise, but there remains a fixed set of theaters for Broadway shows to be staged, thereby limiting revenue growth. The end result is economic unsustainability, as these productions either curtail spending by employing fewer people or pass higher costs along to consumers through ticket pricing, often both.
Adding more Broadway (or off-Broadway) theaters to increase revenue wouldn't really address costs; the additional productions would presumably have similar staffing costs as the existing productions, so ticket prices would need to be similar in order to recoup the costs. [1] But viewers would have more options and be less likely to pay the top ticket prices.
[1] Unless you're certain that the show would fail...
I worked in Los Angeles doing animation and VFX software for 33 years, and left 5 years ago as the cost of living there made no sense, and my prospects for work became nomadic global chasing of work now taking place in countries with no or ignored labor laws. (As if labor laws are respected in the US anyway.)
Interesting in relation to the article, the author describes working out of the empty Warner Bros. lot; I lived across the street, right next to "The Starlite" (the author will recognize.)
Los Angeles and the entertainment industry's economics are brutal. My wife is exponentially more successful than I, a film she was the VFX producer for won an Oscar, she's an industry player, and still LA is too expensive.
My state, like many others, offers rather large tax credits to make films inside this state.
> the entertainment industry's economics are brutal
A large part of those economics are self-inflicted. The money is "loaned" to the production company at credit card rates with repayment from the receipts from theater viewing years later. Depending on how "big" the movie is, 95-100% of the box office receipts for the first 2 weeks of a theater run go back to the studio (so the movie theater survives on selling popcorn and stuff). This tapers down until the theaters get 100% of ticket sales about 2 months later. The last movie that theaters made profits from displaying was The Full Monty - it got a small release in 1997 but those theaters played the movie for months.
I worked with some guys who did special effects for movies & TV shows.
This sounds like the "360 contracts" that record companies require bands to sign. When bands are touring and getting an audience, they frequently sell CDs and T-shirts. The "360 contracts" require the band to give a percentage of that income to the record company and frequently require them to purchase CDs from the company at a higher-than-wholesale prices.
Super interesting, do you feel this is death by 1000 cuts or can you point at the economics no longer working as small handful of causes (i.e. rise of cost of living in LA, move towards direct to streaming rather than theater releases, AI workflows)?
I think the economics of a global entertainment and wealthy persons' playground is what is "ruining" Los Angeles. Earlier in my time there, I spent time in an uber-wealthy circle and basically encountered Epstein-class people doing what they do with the children of their own staff, and that is when I noped out of that entire social circle. There is not much that can be done when you see such wealth pursuing such agendas and you also see them with celebrities, as well as senior city and state officials. Such people are untouchable as far as the law is concerned. Los Angeles is sick with treating others as disposable, with sexual aspects included. And it is not "Los Angeles", this is human nature without boundaries.
yeah this is what I heard from pretty much everyone in the business down there. since production has gone international LA can't compete with, say, Romania. You can ship out your must-haves and rely on locals for the rest, the savings are enormous.
There's some stuff you can still do in LA but a huge amount of actual shoot days are in countries with lower costs and fewer labor restrictions.
1) Supply/demand. There's actually a shortage of quality movies relative to what the market will bear, one need only look at the occasional breakout hit like Obsession to see that it's possible to make a ton of money if you understand the demand signals.
2) Demand signals. Median age of someone with greenlight authority is ~62. In the 80s, there were 30-year-olds running entire studios. No disrespect to Boomers, but this business is about marketing cultural products and they have no idea about the culture. This also creates significant demographic headwinds in the job market.
3) Costs. Wages/COL are a part of it, as are unions, star power demand, and how companies like AAPL/AMZN can do streaming as a loss-leaders, which creates a lot of downward pressure. The biggest one is that in theatrical CAC > LTV. You can spend 2x your production budget on marketing and that investment evaporates the first week of showing – there's no real brand loyalty to studios/streamers, especially now that they've commoditized their IP and put it on rotation through the online platforms.
4) Originality. Franchises, sequels, and remakes were roughly three-quarters of 2025, and nine of top ten 2024 worldwide grossers were sequels. This is a result of local minima/risk arbitrage in the studio's portfolios, the bottom line is that people will still show up for a Spiderman movie even if its crappy b/c of the pre-aware IP and there's nothing better out there. There are wonderful exceptions to this of course, like Christopher Nolan and many indie films.
5) Politics. Hard to not deal with politics amidst the outrage cycle, but the easiest way to achieve that is to have a plurality of viewpoints – which you can get if you stop trying to bend beloved IP to contemporary politics and just make new shit!
Ad 2.) 30 years old are on the youtube. They do their own thing.
And it is also actually ok to do entertainment for older people, including boomers. People act as if there was something shameful about over 40 existing and have entertainment for them. It is as ok as enrertainment for young.
Video game industry analysts are predicting the same is going to happen to their (my) industry. Contract out more and more work to SEA/China/Poland et.al. It's extra painful because games are relatively cheap to localize (fantasy is universal, it's just translating text and words), so studios based in cheaper parts of the world already have an advantage and they have access to the west markets. Global competition can be brutal.
As an aside, there are large portions of the US where coastal folks dont want to live. These places are 2-4x cheaper (compared to costal game industry hubs) and could be cost competitive.. but it's probably not going to happen.
I was watching a terrible movie, Wolverine, and the titular character is driving through Canada, we're told, and I found myself thinking that "huh, that bit of Canada looks a lot like New Zealand, interesting."
Then he drives across a one-way bridge, and tracking shot above the car captures the big arrow New Zealand paints on the exit lane indicating you should drive in the *left* lane (started doing this after few too many tired tourists from RHD countries reverted to habit upon leaving a one-way bridge causing a head-on collision further down the road). They could've edited the arrow out, surely.
TL;DR thought Canada in a movie looked like New Zealand, it was New Zealand.
Blockbusters and tax credits started the trend, but green-screen filming sure accelerated it. Now that so many movies are almost entirely CG, it really doesn't matter where the green screen studio physically exists.
The silver lining (for Americans) is that Hollywood movies are still very Hollywood. Canadian actors, Canadian crews, and Canadian filming facilities all combine to make utterly American films. If real locations are used, they're carefully chosen so that Vancouver stands in for New York, Calgary for Minnesota, etc.. Canadian references, accents, and values are all carefully erased.
The one thing that seems to stay stubbornly American is the money people.
When corporations grow to a certain size, they become banks.
The same thing kind of happens to industries when they get dominated by a few large players. The large players are banks. The core of the industry becomes a form of finance.
Hollywood is now the financial capital of the film industry, not where films are made. Hollywood finances films.
I absolutely don’t want to imply there’s any one reason that he led us to where we are. This comment isn’t to try to undercut or malign some great data and investigation. But an article on this topic that literally does not include the word union in the entire text is not painting a full picture.
You can fairly point out that unions still exist in Georgia, and that the UK and other European locations have robust worker protections - this isn’t a situation of union work vs. non-union work. But the extent to which unions in California have a stranglehold on the movie industry is absolutely part of the story here.
Given that New Zealand actually changed its laws to prevent unionisation in order to ensure The Hobbit was made there, I think unions are definitely a factor.
I have no idea how strong the unions related to film are in the UK. It varies a lot between industries.
>"If this has all drifted into bummertown, it’s because many of Hollywood’s problems can be traced back to a single economic theory of everything: the rent is too damn high. From there, everything else starts to unravel."
It's really understated just how much this is behind absolutely everything today. The only reason it became normal for SV software companies to pay 100k+ salaries to interns in the 2010s is because half of that had to be handed over to a landlord every month just to have people physically able to show up to your office. This is why Europe and Asia have completely dominated production of all the great AAA games over the last decade; when creative people can afford to live somewhere, all of the sudden you have the resources to truly focus on a product.
Also, a lot of real estate is owned by the Hollywood investors or their close friends, so this is a circular economy where they get rich, then buy property in that place and get even richer with real estate increasing in value. The same thing happened in Silicon Valley, Wall Street, and many other places.
That rent is simply a tax (tribute) paid from people (peasants) to property owners (lords.) It's why people who own capital are the wealthiest that they've ever been in history despite producing nothing and increasingly being of severely subnormal intelligence.
The distraction is that a lot of people think that they are property owners who are not. The bank owns your property, you're a tax farmer. The people who own the bank are your bosses. They are granted the right by the state to loan you the money to buy an overvalued property, without actually having the money to loan you, and on the condition that the property that you bought is theirs if you miss a repayment on the money that they loaned you that that they didn't have.
This is also why building more housing does not work in the long term to lower rents. We have a surplus of housing, just like we have a surplus of commercial property. But we have arbitrarily changed expectations for the margins of finance capital. The tax farmers (most landlords) are a distraction so that their tiny margins can be pointed at - because the money was made from the property when they purchased it. Now they're behind the 8-ball trying to make the payments, until they lose their job to a better tax farmer.
If you build 9000 shitty units at the site of a grocery store, you can raise all of the rents around them because the 9000 shitty units are now an escape valve against displacement and dislocation. The next step is to raise the rents on the 9000 shitty units, by any means necessary, even if it means keeping half of them empty for a decade, and using them to write off your taxes on other properties you own.
The fact that there's no grocery store and no parking for 9000 units? Your problem.
YIMBY activism is entirely financed by these people, which is why it's so loud.
> It's really understated just how much this is behind absolutely everything today. The only reason it became normal for SV software companies to pay 100k+ salaries to interns in the 2010s is because half of that had to be handed over to a landlord every month just to have people physically able to show up to your office.
Well, it became normal because there were people (sometimes, but not always, the same people with significant holdings in the software companies) who held a lot of real estate and knew if they wanted that real estate to be more valuable, they'd need to force people to use it, meaning show up to work every day.
SV is the failure it is today because it concentrated all of the talent in one place needlessly. Something the rest of the country explicitly worked to not see happen.
I saw a Trump clip not long after his inauguration where he said he was unhappy about Hollywood moving overseas due to tax cuts but so far nothing.
Like with manufacturing in China, allowing your competitor countries to build up expertise means at some point it become difficult to regain top place. And whilst bulk of the profits may flow back to the USA at present, may not always be the case.
It’s not like it’s been hidden, all USA needs to do is reduce the gap so financially there is no incentive to go abroad.
Something interesting to note, is that while "Hollywood" is fast losing its status as the nexus of the traditional film / tv industries, LA in the broader sense is already very well established as the global (Well at least "Western") hub of the content creator economy. Literally thousands of wannabe / up and coming YouTubers, Tik Tokers and "Influencers" of all sorts are packing up their lives and moving to LA every year in order to be closer to each other, and to the talent pool of cast-off film and tv folks that live in LA.
The "Cost disease" seemingly hasn't yet infected that industry at least (Or the infection is still in its early incubating stage) though I think that's in large part due to the fact most of the content creators aren't working within the established industry framework, but rather are intentionally trying to work outside of it, in order to avoid paying union rates.
To be fair: the quality of movies produced by Hollywood has gone rapidly downhill already in the 1990s. You only need to compare the movies Quentin Tarantino makes; now personally I think Pulp Fiction is still by far his best work, but I concede that the movies he created lateron were above average (though I would not go as far as many others, who'd rate these in the 8 to 10 point ranges; I'd go more between 6 to 7 or 7.5, largely because there are a few smaller issues cropping up and I always notice these when I compare them with Pulp Fiction, which was really good; actually really well-made).
I noticed this in the 1990s in many movies. For instance, Independence Day - the computer animation pissed me off. I found them bad. Even Terminator 2, where evidently many people say it was great, I was nowhere near as convinced; I found the first terminator better and more "logical" and more consistent, too. But things decayed quickly in the 1990s really. Even movies such as Avatar I find total garbage. And while I am not totally against superhero comic/marvel adaptations (I liked xmen and in particular Hugh Jackman as wolverine), these are always the same formula. Tons of CGI, big fights where nobody knows what is going on, very little thought elsewhere in that formula. There are exceptions, but by and large these things keep on happening. Individual directors manage to break out of the mold (Chris Nolan) but by and large movies really SUCK now compared to the "oldschool days". And while some of this may be due to me becoming more critical, the production quality just sunk. Take movies such as Megalopolis - this captures what is going wrong. It seems as if the whole movie industry has partially collapsed in the last +25 years and they don't really know what to do to change this. The same has happened to games, by the way. It is almost as if only one formula exists only now.
Investment-driven development. When it's no longer about creating something compelling, but about convincing the investors that banking the production means a fairly safe ROI, you stop getting creative works by auteurs and you start getting sequels, remakes, and low-stake, inoffensive, mediocre, forgettable, bland sludge. At the upper end, investors give directors checklists and guidelines to limit their authorial voice. That's why it doesn't matter who the directors of the MCU movies have been. They're just Disney-produced movies. A film student could have directed them and it wouldn't make a difference.
But weren't they all made outside of Hollywood? Emeryville, around Europe and the UK, and then the UK for Toy Story 5, Odyssey, and Spiderman respectively?
Which is cool, but also likely an outlier due to Christopher Nolan's usage of practical effects vs CGI. His clout probably helped with the funding of that tbh.
Hollywood makes slop now, the last movie I saw was some iteration of Mission Impossible where the genius agent defeats the all powerful AI and that just felt like lack of imagination.
Nothing new. When I was in college down in LA I lived in a very small town founded by stunt people. Probably 80% of the people there were in the stunt business. Every few months they were off to another state or country for filming. Hollywood is just for the studio execs now, everyone else flies to whatever country offers the best tax breaks for them to film.
They go to some pretty incredible lengths too, A friend of mine and his dad own a stunt company that works explicitly with semi-trucks. Pretty much every time you see a semi in a stunt in a movie it's either my friend or his dad driving it. They will ship these semi's to foreign countries instead of film locally because the tax incentives are greater than moving entire production companies around the world.
A few days ago I visited the little picturesque town of Hope, British Columbia. While driving down the Main Street, I saw a dozen chainsaw carvings of wildlife. I thought, why does that one look like Rambo? Found out the first movie was filmed there in 1982. The movie took place in the fictional town of Hope, Washington. When the movie begins, you see Sylvester Stallone walking into town under the real “Welcome to Hope” sign that was in the Canadian town at that time.
A staggering amount of film and TV is shot in Canada.
According to this article about 1/3rd as many movies are made in LA since the 90s. They were only making 30% of films in LA in the 90s so your experience still matches with the data but having 2/3rds of the local film production move elsewhere is significant.
Before the 1990s CGI did not exist yet. You really had to film stuff outside.
This seems inevitable for most industries in the US (car/general manufacturing)
1. City/region becomes a boom-town based on a new high profit-margin industry
2. As that region becomes more wealthy, labor increases in price, thus there is more incentive to seek labor/resources for that industry outside the city/region
3. City/region hollows out of middle-class level jobs for the industry, retains ceremonial labor and executive offices.
>everyone else flies to whatever country offers the best tax breaks for them to film
once people are arranging plane tickets/charters, then they fly to the best place financially.
But LA/Hollywood.gov priced themselves out of the market first.
Aging myself here but growing up in a "movie set city" (definitely not LA) in the 90's meant getting rerouted on the way to school because The Wire needed our block again. It's funny to see how the article shows this wasn't just a local annoyance back then, but an early sign of a much bigger, long running shift in where and how Hollywood actually makes movies.
NCIS used to use my English department building at University as their Hospital. Star Fleet Academy in one of the Star Trek movies was the front of my school's library.
Considering how much they did there it wasn't nearly as inconvenient as you would think. The school had a good process in place for controlling the chaos. It's still weird watching the movie and seeing my old library in it.
Shooting in Baltimore for a story that is about Baltimore is different than shooting in a different city as a stand-in for the city in the script though. That's just normal location shooting.
An interesting read but also feels like the rearranging of the deckchairs on the Titanic given the forthcoming disruption from generative AI in this industry.
I spent some time last month with a relative in the industry (camera operator and producer) and he already uses some very sophisticated AI to map out scenes and shots in gen ai full video before they shoot IRL. It's mostly a cost saving exercise as well as occasionally helping to improve the quality of the deliverable.
He is totally expecting that the next shift will be that gen ai video will become good enough to be considered the master (ie no need to film) and he is already transferring his skills as a camera operator into prompting and AI assisted scene design.
He knows that many different disciplines he works with will all compete for that prompting work and there obviously won't be enough work for everybody to go around.
The first part of this is using human actors in front of 360 video stages like The Volume [0] to display the sets (which was pioneered by The Mandalorian) and then ultimately the actors themselves will be AI rendered.
And at this point it doesn't matter where this is filmed.
I grew up close by to Pinewood Studios 30+years ago - I can't imagine them putting a lot more investment and development into that lot given where this is all going.
[0] https://en.wikipedia.org/wiki/StageCraft
Man, this is so misguided....
1. Stagecraft/virtual production is a thing, yes, but the backgrounds are not "AI rendered," they're 3D scenes built in Unreal. They have to be, because they need to dynamically react to the camera moving to create parallax.
2. Yes, some people are using AI to plan scenes. With respect to your relative, those people are not the ones getting hired on large projects. When someone is hired in the film industry, they're hired for their specific taste, creative eye, and opinions. That contribution is literally their whole job. Outsourcing that task to AI is, within the industry, seen as an indication that someone is inexperienced or simply bad at their job. Crews don't want to work for those people, and audiences don't want to watch content created that way.
3. It's easy to "expect" that "one day" AI might become the way movies are captured if you don't actually understand the limitations of AI video generation versus the demands of filmmakers and the expectations of audiences. Putting aside the obvious stuff like continuity, shot duration, and resolution...GenAI is not color managed, it's not physically accurate, the results can't be copyrighted and it struggles with anything not in its training data (I.E., genuinely new ideas.)
This is NOT to say that this technology has no future in the film industry, obviously it does. But half the movies at the Oscars last year were shot on film, so the notion that all filmmaking is just going to turn into pixel soup being generated from prompts is just hilarious to everyone actually within the industry.
Stagecraft is just one implementation but you don't think that the Unreal 3D worlds that are used behind it are beginning to be generated with AI?
You're right that my relative probably isn't going to be at the top of the list to be hired for that work. He doesn't work in Hollywood level stuff and I also think that he knows he's going to have to fight to stay relevant and compete for the work that's available to him. Fortunately he's at the end of his career and his kids are adults. I think he can see the writing on the wall for his career either way.
Color management and maintaining context across multiple renders is actually the conversation we were talking about and the software that he is using has mechanisms to define context across a rendered shots and even across multiple projects. He just wasn't using them as it's an alien concept to him. My point is all of that is possible and solved and will become easier as the market matures.
I also have a friend who was significantly involved in Odyssey and I think the reason why so many films are made with film at the moment is because the industry is clinging on to what it believes is authentic when being pushed towards a commoditized race to the bottom.
As people stop paying to go to the cinema and Netflix demands tighter and tighter budgets for work, I think we will sadly see the end of this means of production because fewer and fewer people will want to pay for it.
The end goal of all of this is actually customized content where the film that I see and the film that you see is different because it's rendered to our tastes. There's a whole school of thought there around a collective experience versus an individual experience, but the technology will allow it if it's completely digitally created and one would assume that will be where it will go.
In other words, I might want Odyssey but framed as a horror filmed in noir and you might want Odyssey framed as a rom-com and the AI will just generate the version for us based on the original directors prompt. I actually think that's kind of sad, but that doesn't mean that isn't where things are going.
Your last sentence there seems a little too 'high fantasy' for me. People want a shared experience. Talking about the Odyssey and saying "I liked it, but with the rom com lens" is not a unified experience. Also it kind of shits over the director's vision, which they probably won't stand for. The whole point of art is a framing of an idea. If you add these different lenses, you remove the framing; they become distinct things in and of themselves.
> Stagecraft is just one implementation but you don't think that the Unreal 3D worlds that are used behind it are beginning to be generated with AI?
They are not. Source: I have run one of these LED volume studios for 4 years.
> Color management and maintaining context across multiple renders is actually the conversation we were talking about and the software that he is using has mechanisms to define context across a rendered shots and even across multiple projects. He just wasn't using them as it's an alien concept to him. My point is all of that is possible and solved and will become easier as the market matures.
These problems are solved...ACES, DRT, FDL, etc. exist, are open, and AI companies are welcome to utilize them. But for some reason, they don't (or can't.)
> I also have a friend who was significantly involved in Odyssey and I think the reason why so many films are made with film at the moment is because the industry is clinging on to what it believes is authentic when being pushed towards a commoditized race to the bottom.
The reason people are still shooting on film is because it forces you to slow down and think about every decision, because mistakes become very costly. The decision to shoot on film objectively does not make technical sense, and studios would much prefer people shoot on cheaper digital cameras. But filmmakers still use it because of the specific creative mindset it requires of you.
> The end goal of all of this is actually customized content where the film that I see and the film that you see is different because it's rendered to our tastes. There's a whole school of thought there around a collective experience versus an individual experience, but the technology will allow it if it's completely digitally created and one would assume that will be where it will go.
The end goal...for who? Totally fine if this is something you want and interests you, but unless you have a time machine, this is just speculation.
Who cares about Oscars? It's about sales and mind-share. Ticket sales still have not recovered to pre-COVID levels, and they were already in a severe downward trend before the pandemic.
The trend is that increasingly, the entertainment people consume comes from small-time creators. And these small creators have thus far had very little capacity to create truly visually appealing content and take on more ambitious works. And still, they've been taking mindshare from the movie industry.
Increasingly sophisticated experiences are becoming possible for these creators via AI tools. Where do you think this is going? Keep on laughing it up at your award ceremonies, but the audience is moving on.
Your information about ticket sales is out of date. This year is on track to outsell pre Covid years.
Adjusted for inflation and population?
Sure, but saying that AI is the magic bullet to solve this is completely speculative. If and when a fully GenAI film is released and performs well at the box office, than I'm sure the industry will align itself to the new direction. But pretending like that situation is an inevitability is just wishful thinking...any number of things could, or could not happen.
The future is probably not 100% generated, but probably a mix of generation + animation + motion capture. AI is not going to be able to replicate the deep and affecting performances you get from humans—I fully believe it can recreate some aspects of the visual arts, but no way is it going to get to the point where it will be the best of the best. It may become good enough, which is a thing and will make an impact, but I think creatives will still want that kind of control.
And when we see the edges of that control, people will be interested in seeing things that make it "the old way," part of the reason you see a lot more practical effects these days, and I would include the background-in-unreal backdrops there, because they read as more real than actors in front of a green screen—for reasons that are totally unconscious unless you are highly trained in the differences.
While I do think gen AI is going to change how movies and TV shows get made, anyone telling you it will be a whole hog replacement has not studied the history of multimedia and probably hasn't made anything that required a high-level of vision themselves.
With a few notable exceptions (James Cameron) the film industry is largely unconcerned with "possibility." I think this is often why there is such a big misunderstanding from tech folks about how movies are made, since tech is very feature and tool driven whereas filmmaking is very much process-driven.
The Odyssey was shot on IMAX cameras half the size of a car that weighed 400lbs. It's easy to call that out as being ridiculous, surely a much smaller camera system could have achieved 99% the same results, etc. but that totally misses the point. Nolan could have shot it on anything he wanted, and he chose the less convenient way, because that is his process. If he was forced to use a more reasonable camera, it would not have been a Christopher Nolan film.
Sure, I'm down with that mix of generation + animation + mocap workflow. But at some point, people will going to look around at all the equipment, the people in mocap suits, the thousands of hours of generation and the millions of dollars of compute, and just wonder...wouldn't it be easier to just film someone with a real camera?
> half the size of a car that weighed 400lbs
Link please - saw nothing like that from a quick search
https://www.reddit.com/r/cinematography/comments/1p2exyx/che...
> half the movies at the Oscars last year were shot on film, so the notion that all filmmaking is just going to turn into pixel soup being generated from prompts
> audiences don't want to watch content created that way.
I want to point out a couple things. Not that I'd assert that you're wrong in basically your whole post. But...
Filmed movies and normal television programs aren't competing only with other content coming from (so-called) 'Hollywood studios.' They're competing for audience attention with all content, and to be thorough with any other activity people might get up to. The potential damage to (so-called) Hollywood is equal in these two scenarios:
1. 50% of films and TV shows shift production to AI-first: They use no real shots, they just motion capture a few actors and use AI and Unreal sets built primarily with AI and put the whole thing together digitally.
2. Of the time per week that people today spend watching films and TV, people shift 50% of that time to watching cheap, often-AI-produced junk on TikTok. Or for that matter, it doesn't even need to be AI-produced junk - it could just be influencers screwing around / ranting / doing sponsored content / etc.
Either way we lost 50% of the jobs. As for whether audiences want to watch that content, I'm starting to be concerned that we (human consumers) have lost most of our control here. Most people today consume content in a few ways:
1. Algorithmic feeds show us content, one item at a time, decided by a platform owner (Meta, Google/YouTube).
2. Streaming services. Again, algorithmic. You have to scroll like 12 sections down to get to "Resume Watching" - past 11 other carousels of What Platform Owner Wants You To See
Distant third: Movie theaters, but people usually go specifically to see a certain film. What movies you even know about hinges on either a platform owner deciding to show you a video discussing a movie, or ad spend. And some people block ads, and most others try their best to skip them - this is a far cry from the 90s, when movie ads were a staple of every commercial break. I used to at least know of every film in an 8-screen theater at all times, able to give a brief synopsis of the premise, just based on the linear TV advertising I saw.
Anyway just a long-winded way to say, don't underestimate the power of platform owners to force-feed us AI garbage and artificially generate "demand" if they decide that it's in their interest to - and this is exactly their playbook due to the cost savings potential. Same reason Spotify started padding their first-party playlists with AI slop.
A lot of people, especially left leaning and young people, are very against any AI use and especially for AI pictures or video. For them it's very cringe-worthy. So that would all need to change somehow.
Remember that a lot of the people driving opinions on stuff are the artists that would be displaced by this technology.
Also... Actors aren't hired based on acting skill. AI can't replace the notoriety part of why studios hire actors.
I was at a Brazilian restaurant in the US that had TVs showing a well-known Brazilian singer/guitarist performing, and the middle-school-aged kids at the table next to me were discussing whether it was AI. It was clearly not, to me, but it seems to be getting hard for the next generation to tell it apart. I think they will be craving authentic experiences, but also willing to accept inauthentic ones when they do not have the money for the real thing.
I think you're right. I think there will be a giant "tock" back to real experiences. I'm 37, and the internet was new and novel during my formative years, so we flocked to it. Now, as it's becoming the old new thing, internet fatigue will lead to more and more "offline experiences." At least, it already has started to for me.
Things change, and people forget why they were ever any other way. There are definitely resistance forces, but when the overton window flips, people just accept the status quo again.
Once it’s good enough no one will care. A green room in Atlanta can become Venice Beach.
Actors will still be in demand, at least leads and most speaking roles. 3000 extras, that’s going to be AI.
My hope would be this allows for hyper small budget shows to rival what takes millions today. Maybe we can actually get some creative stories instead of Marvel slop fest 43
> My hope would be this allows for hyper small budget shows to rival what takes millions today.
No way. Small creatives will go elsewhere. Unless the structural "winner takes all" economy changes, small players will have no chance, especially when they have to use monopoly expensive tech.
Good writing already left hollywood, hollywood is already repetitive reboot factory.
Actions matter more than words. Sure, they're complaining about AI, but consuming AI content more and more.
It's a bit like people who complain that everything on the news is always bad. Everyone hates it, yet it's what everyone consumes.
> AI can't replace the notoriety part of why studios hire actors.
I mean it probably can if a few famous actors license their likeness to be used in AI films. And it's probably only a matter of time until fully AI actors get marketed and licensed for use in AI films. I don't see a fundamental reason why AI actors couldn't build the same kind of notoriety and following.
> I don't see a fundamental reason why AI actors couldn't build the same kind of notoriety and following.
Can AI's trash a room at Hotel Marmont? Dump their girlfriends when said girlfriends turn 25? Become Scientologists?
As someone who originally comes from a field that cannot be consumed by AI anytime soon (food service. AI can't actually be eaten) it's insane watching tech-dorks think "nobody actually cares about what they buy, which is why they will suck down all this slop because ultimately they just want output".
Some of us remember the story of the Luddites and hope that this time might be different with 200 years of social progress.
> As someone who originally comes from a field that cannot be consumed by AI anytime soon (food service)...
That's a cost problem, not a technology problem.[1]
[1] https://www.youtube.com/watch?v=1Xop9py8zBY
>food service
>nobody actually cares about what they buy, which is why they will suck down all this slop
McDonald's exists?
Honestly I don't really see use of AI in films or music any worse than use in say programming. Actually even less so. Output is fixed and much easier to verify. So if it is reasonable and it sell why not go for it instead of expensive way things are now done.
I hope you’re right because I like the film industry a lot. But I worry this will be a repeat of the model versus cgi thing where many of the purists were converted by the cost to get the picture they can seen in their minds get made and seen by the masses.
> He is totally expecting that the next shift will be that gen ai video will become good enough to be considered the master (ie no need to film) and he is already transferring his skills as a camera operator into prompting and AI assisted scene design.
Yes. Asian drama is already there.[1] The first AI-generated Asian vertical-format drama was released in November 2025. Now, about 400 new ones are released each day. The tools are online, and you can sign up for a few dollars a month.
Quality varies widely. The visuals are now quite good, but chatbots used to generate screenplays still have trouble holding the plot together. Much of this stuff looks like fan fiction authors are at the controls. When someone competent is driving, the results are quite good. Cost is about 10% of live action.
Hollywood probably has less than three years to live.
[1] https://pinedrama.com/blog/paradigm-shift-ai-short-drama-rev...
Can you link to a high quality example of a short drama?
The article mentions ShortMax's "Too Late! The Daughter of Olympus Forsakes You" and NetShort's "One Move God Mode". I found something on YouTube for both, but there's zero chance what I saw was Hollywood level quality (unless you really hate Hollywood movies!)
This is only going to replace movies that were already using CGI.
If every movie defaulted to CGI over natural settings, you wouldn't have stuff like the Odyssey made...which is setting sales records.
I still don't understand why there's such a race to the bottom.
If they don't want to make a movie properly, why make it at all? The corner cutting across the board has become so bad that these movies are unwatchable.
This isn't even a new problem. A lot of traditional CGI can still be bad enough to ruin the illusion when it's the state of the art and a lot of attention to detail went into it. We've been circling the drain for decades. I suspect this is why everything became superheroes for a while. The illusion doesn't have to be good to meet that low of a bar.
If the goal is to be as cheap as possible, you might as well release the story as a picture book written by AI.
What is "proper movie making?"
> If they don't want to make a movie properly, why make it at all?
Hollywood moves have little to do with art or even entrainment for that matter. They are simply revenue generating machines. Rich people invest in a movie production and expect a return. Hollywood moves don't take artistic risks anymore which is why franchises have become such a big thing. If it make money before, it will probably make money again. Even if it's bad, fans of the last movie will buy a ticket just to see. If it's bad, well, you have their money already!
It's pretty similar to Silicon valley these days. The technology is just a vehicle to produce a return on VC money.
It's the same forces driving software quality to the bottom. Simply put, enshittification has become the expected norm and there is more money to be made pushing out barely acceptable slop than the higher effort(and cost) of better made stuff.
Also, it's not exactly that the higher effort, better quality stuff is gone as it's been drowned out by the slop. Higher quality things are still being made(e.g. The Odyssey which uses minimal CGI), just much smaller as a percentage of overall.
Earlier unit economics of slop were roughly comparable to higher effort output. It was cheaper, but not dramatically so to push out crap code, so the volume of slop was a bit lower. Now, low effort slop is genuinely low effort due to AI, so the economics work out even accounting for the lower adoption and higher complaints from the users.
Time will tell if this is a temporary phase, or the new, bleak normal.
The acceptance of the slop is the problem.
We've had low effort fraud for all of human history. We absolutely need to revise our definition of fraud to include AI slop. People need to wake the fuck up.
Nobody would accept a low quality product under any other circumstances, so why is AI different? We only have this large scale fascination with it because so many people are completely uneducated in computer science and have no clue how it works or what the limitations are.
What will probably happen is that they'll buy the rights to use faces of famous people (actors or not) and use AI (or cheap actors) to do the real scenes.
People want to see expensive effort in movies they have to buy tickets to see and AI is the opposite of effort.
Expensive movies are liked because they look impressive much more so than cheap movies. Say Titanic in past. Or Lord of The Rings. If AI can do the same they don't actually care if it was expensive or not.
The article repeatedly mentions how production moved to Atlanta due to tax incentives. Even that is a race to the bottom, as Disney moved production of Marvel movies out of Atlanta last year to the UK where they got better tax incentives. Even the undercutting cities are being undercut.
The whole tax incentive business is a big race to the bottom. Sports teams also abandon their taxpayer funded stadiums once somebody else offers a better deal.
Yep. See the Kansas City Chiefs.
Clark Hunt is the largest recipient of welfare in the entire region.
Sports teams are an interesting one because often times these things go on the ballot and people vote for that. So it looks like people and municipalities have varying reasons for keeping a team. That said sometimes it just doesn’t make business sense for a team to stay and other times a municipality decides it’s not worth the cost to keep a pro team.
In the case of the Chiefs, Jackson Co., MO voters voted not to fund a new stadium.
The reasoning was pretty simple: the Hunt family is worth $25 billion [0]. They could likely pay for any sort of improvements to Arrowhead, or to replace it altogether, without taxpayer funds, which comes from people in a metro area where the average income is on the lower side of things in a time when costs for everything keep going up.
On the other side of the state line, Kansas lawmakers specifically targeted the goal of moving two professional sports teams to the state using public funds called STAR bonds.
The end result is that the Kansas City metropolitan area will be spending, in total, about $3-4 billion to give the Hunt family a new place for their sports team to play, likely far away from the city center, and that Arrowhead needs to be torn down, which will cost at least tens of millions of dollars, once again, at taxpayer expense.
$3 billion could probably build out a real public transit system for the KC metro.
[0] https://sports.yahoo.com/meet-25-billion-hunt-family-2024104...
The crazy thing is that the best case is that the city will hopefully break even i all the promised benefits materialize. In most cases they don't. I bet if they hired a good VC to invest the same money into maybe 50 startups they would have a much higher change of a good ROI. But then the same people who accept sales tax increases for the sports team would probably be complaining about the tax burden.
I also don’t like subsidizing sports teams. To me it doesn’t make too much sense. Yes I know fans can be pretty loyal and sometimes that team is sort of like a pet dog. They love it through highs and lows. It’s something that can provide some identity to some as well as live vicariously through them. I get it but I feel sometimes you gotta let boyhood ideas and dreams go.
But hey sometimes people vote for their teams to stay despite the negative monetary ROI.
What is weird to me as a European is that sports teams in the US can move. Can you imagine FC Barcelona moving to Madrid?
We have funny examples a little bit like "imagine FC Barça moving to Madrid" in the US. Used for comedy (but these are all real examples) from the opening monologue of the film BASEketball
> The Minneapolis Lakers moved to Los Angeles, where there are no lakes; the [Houston] Oilers moved to Tennessee, where there is no oil. The [New Orleans] Jazz moved to Salt Lake City, where they don't allow music.
Other names like that are
- the Baltimore Colts (named for Maryland's thoroughbred racing tradition) moving to Indianapolis (more known for open wheel auto racing),
- the Vancouver Grizzlies moving to Memphis, Tennessee (which never had Grizzlies even in the post-glacial period)
- the Brooklyn (Streetcar) Dodgers moving to Los Angeles in 1958 right when the LAMTA took over the few remaining street car lines before replacing them with buses in 1963.
The closest thing I can think of in European sports, and it's a stretch, is cycling teams. I picked this teams as the first example I could think of, not because it's some egregious example:
1984–1986 Kwantum–Decosol
1987–1989 Superconfex–Yoko
1990–1992 Buckler–Colnago
1993–1994 WordPerfect
1995 Novell
1996–2012 Rabobank
2013 Blanco
2013–2014 Belkin
2015–2018 LottoNL–Jumbo
2019–2023 Jumbo–Visma
2024– Visma–Lease a Bike
via https://en.wikipedia.org/wiki/Visma%E2%80%93Lease_a_Bike_(me.... Also note that the team was newly formed from a schism in TI–Raleigh, where the other half of the riders went to Panasonic.
The parallel is that the name changes make tracking that team a real ship of Theseus problem: if the name, sponsors, riders, and staff turn over, is it worth calling it the same team? Similarly, if a football team changes cities, names, personnel, and owners, is it worth calling it the same team (Houston Oilers, Tennessee Oilers, Tennessee Titans)?
It's a little weird but the teams and the sports leagues are basically just corporations that engage in show business. They have no real connection to where they are located.
Not that you're wrong, but I could have sworn that Marvel production was always based in the UK.
Post-production is very much still in California though.
https://discoveratlanta.com/stories/things-to-do/atlantas-ma...
Atlanta did a lot of the big ones.
I just saw the new Spider-Man movie and there were a ton of notices about Canada-based film credits and from various provinces, too. I'm not sure how these credits work, but maybe spreading the work out to various tax incentivized areas is the current play.
I mean, the VFX part of the Film industry (and actual location shooting to some degree) has been chasing subsidies / tax credits since around 2002 with the Harry Potter movies that mostly were shot and produced (and more specifically the VFX were done in London, rather than in California) in the UK.
Since then Canada and the UK in particular (and NZ and Australia) have had various different fluctuations in subsidies for various parts of filming / doing post-production of movies over the intervening years.
Film in Atlanta has dropped significantly.
We had a boom from 2010-2022, but post streaming era the gravity has moved to the UK and Eastern Europe.
Nobody really wins in a race to the bottom
What has yet to be mentioned is why Hollywood, in the first place?
Out of the many reasons, one is quite simple: daylight. This used to be really important with film.
Historically, this was why efforts to move filming to somewhere like 'Scunthorpe, UK' didn't really work, despite tax fiddles, because you need light and some places just don't have it.
But this doesn't matter now, because film has moved on, there is no need to have a massive glowing unshielded nuclear fusion reactor, 93 million miles directly overhead, just to get some lens focused on some bits of silver halide.
My understanding is that an important consideration at the time was that it is very far from New Jersey.
Edison had a lot of early patents for film, and wanted to monopolize the industry.
Film makers in California were far enough away that it was inconvenient for Edison to sue them, both because it required sending people there in person, and because the district courts were favorable.
The irony here being that Netflix is currently in a massive layout to build a studio in NJ (like, 20 minutes from the old Bell Labs). Almost feels like giving that troll the finger!
A hundred years ago they were practically giving away land in LA. The real estate value has flipped.
Why Hollywood?
Because Edison and Patents in New York which was the original centre for filmmaking in America.
https://en.wikipedia.org/wiki/Motion_Picture_Patents_Company...
soon they will be filming in mumbai. already setup for movie making.
Much of the VFX and CGI industry is already in India.
Movies and shows like Inception, Interstellar, Ex Machina, Tenet, Dune 1&2, Odyssey, Chernobyl, Foundation, and The Last of Us were VFXed in large part by Indian companies like Prime Focus, Makuta, Phanton, and their subsidiaries.
A number of these overlap with HPC and Distributed Systems with a number of major players in the space coming out of the GPU design space like Raja Koduri (AMD, Apple, Intel). Nvidia, AMD, Intel, Apple, and others having dedicated GPU design teams in India since the early 2000s also helped.
Why though? I thought Hollywood had their own accounting rules which always meant movies made a loss. What are they paying the tax on?
Tax incentives these days include transferable tax credits. Even if your net tax rate was 0%, you can sell the credit to someone else, typically a bank. IOW, states and countries give you money, not simply give you a tax rate break.
What kind of dystopian fuckery is that?
It reminds me of the eBay market in bulk lots of used scratch-offs harvested from the trash:
https://www.forbes.com/sites/robertwood/2016/01/14/powerball...
Hollywood accounting rules are regular accounting rules (GAAP). The only reason “Hollywood accounting” is a thing is because of a bunch of actors who didn’t know the difference between “gross” and “net” points got screwed over.
Everyone involved still pays their taxes, but the special purpose vehicle used to organize the production is essentially a passthrough entity.
If you’re not a name, you’re not getting gross points. There’s a wide swathe of participants (actors, writers, directors…) who need to demonstrate risk by taking net points to get signed, and they are routinely screwed by tactics like artificially inflated self-dealing distribution fees that cause the “production” itself to show a paper loss while the IP has generated hundreds of millions of dollars more than has been invested into it.
Movie Money Understanding Hollywood's (creative) Accounting Practices 9781879505865 This is THE book on the subject. There's a lot more to it than that. Sometimes productions get creatively charged by the studios costs that may not be directly related to shift losses. Sometimes contracts redefine common terms so your points structure is completely misleading.
I presume that what happens is if a movie is too profitable, other business expenses are shifted to the ledger to reduce the profits. This works because a movie is not a separate accounting entity.
>This works because a movie is not a separate accounting entity.
Each movie is set up as a separate legal business entity (LLC). That's the SPV (special purpose vehicle). https://www.google.com/search?q=each+hollywood+movie+is+a+se...
There's also a separate LLC for the parent production company. The production company LLC can also send invoices to the individual movie LLC for services. People can get creative with production companies "overcharging" for various expenses back to the movie's LLC but whatever creative accounting they want to do still needs to ultimately satisfy IRS scrutiny if there's an audit. There are entertainment attorneys that specialize in movie LLCs.
Why would that matter if it's all still a subsidiary of Apple/Amazon/Disney/Comcast/Netflix/Sony?
The relevant taxing authorities would be concerned with the parent companies' financials, not the subsidiaries. Moving money from right hand to left hand doesn't change one's tax liabilities.
"Hollywood accounting" only refers to civil disputes due to insufficiently defined contracts between two businesses (usually actors and producers).
The benefit of “Hollywood accounting” isn’t necessarily tax avoidance; that’s what the tax credits are for. Rather, “Hollywood accounting” provides a way to avoid paying profit-based compensation.
With a very few exceptions, I don’t watch anything made past 2016. Not sure what happened in Hollywood then, but it’s just seems that they are constantly making some sort of public service messages that they need to pay me to watch. Not the other way around. That goes even if I agree with some of the messages.
There’s definitely didactic art made post 2016, but I wouldn’t write everything off beyond that date forever. Online review aggregators are less reliable for recent movies, so you might want to find individuals that you trust for >2016 recs, instead of algorithmic scores.
I actually view 2012-2020 as peak “PSA messaging” era more, which a lot of people would probably coincide with the liberal optimism from Obama and course-correcting anxiety of Trump term 1. I think since covid Hollywood has “toned it down”, because the US has by and large moved on from that social phenomenon.
I’ve been in Los Angeles for over a decade, and I disagree with the premise that Hollywood has some overarching plan to shape how we think— more people watch TikToks than movies and network TV. I view Hollywood, and the creators/writers/producers of films themselves, moreso holding up a mirror reflecting the current circumstances we’re in rather than manufacturing it out of nowhere.
The cost of housing is probably the #1 reason and, in my opinion, California’s biggest problem.
California as a whole is still doing pretty well but high housing cost is slowly pulling out the rug from under the state.
But the California legislature does know that and has forced many cities to start building housing but there is still a lot work still in flight.
I'd say it is the size of the population, far far too many people try to make it in Los Angeles without any specialized educations, so the car washers have 40 people that dry your windows, and the wait staff jobs are exponentially Orwellian. When I finally moved away, I was living over an hour away from Santa Monica, paying $4K a month for rent, and the entire neighborhood lights up every night like a gangsters' paradise. Street racing, graffiti everywhere, sidewalk food vendors everywhere, the local high school kids are covered in tattoos, including their faces. No thank you.
Over an hour away and paying $4k for that? I'm guessing you were renting an entire house. If we were talking 1br apartments you could be in santa monica for about half that today.
4k rent for that environment?
I don't think you can argue that California is significantly worse off in terms of housing than London, which is where a large number of productions go due to tax incentives.
Cities don't need ever-increasing populations to thrive.
Both populations and supply can remain static as demand pushes up prices and swaps lower earners for high net worth people.
Classic supply/demand.
Yeah, that's fine too. If it weren't fine, there wouldn't be increasing demand. If it became too lopsided and thus expensive to live there, it'd become less desirable. CA has plenty of cheaper cities too.
> For a major blockbuster, tax incentives equate to tens of millions of dollars, freeing up money for name-brand actors, elaborate set pieces, and unremarkable CGI effects.
Love the dig at the end.
To paraphrase Syndrome [0]: When everything is a explosion, then nothing will be an explosion.
[0] _ https://en.wikipedia.org/wiki/List_of_The_Incredibles_charac...
Nowadays, we see movies being made deep on the heart of Texas!
> The quintessential example of this is Broadway, where the cost of living in New York City increases, leading wages to rise, but there remains a fixed set of theaters for Broadway shows to be staged, thereby limiting revenue growth. The end result is economic unsustainability, as these productions either curtail spending by employing fewer people or pass higher costs along to consumers through ticket pricing, often both.
Adding more Broadway (or off-Broadway) theaters to increase revenue wouldn't really address costs; the additional productions would presumably have similar staffing costs as the existing productions, so ticket prices would need to be similar in order to recoup the costs. [1] But viewers would have more options and be less likely to pay the top ticket prices.
[1] Unless you're certain that the show would fail...
>For studio executives, it means making do with smaller crews, outsourcing production overseas, and, eventually, using AI to replace some human labor.
Ah so this might be how "shorter working hours" looks on the ground. "Leisure and Culture"'s share of the pie has actually shrunk abit:
https://archive.md/2026.06.04-075622/https://www.theguardian...
That's world, not US, so it might also be that foreign production teams are not counted as "leisure and culture" in their own jurisdictions lol
Original pdf here, p11 https://globaljusticeproject.wid.world/www-site/uploads/2026...
I worked in Los Angeles doing animation and VFX software for 33 years, and left 5 years ago as the cost of living there made no sense, and my prospects for work became nomadic global chasing of work now taking place in countries with no or ignored labor laws. (As if labor laws are respected in the US anyway.)
Interesting in relation to the article, the author describes working out of the empty Warner Bros. lot; I lived across the street, right next to "The Starlite" (the author will recognize.)
Los Angeles and the entertainment industry's economics are brutal. My wife is exponentially more successful than I, a film she was the VFX producer for won an Oscar, she's an industry player, and still LA is too expensive.
My state, like many others, offers rather large tax credits to make films inside this state.
> the entertainment industry's economics are brutal
A large part of those economics are self-inflicted. The money is "loaned" to the production company at credit card rates with repayment from the receipts from theater viewing years later. Depending on how "big" the movie is, 95-100% of the box office receipts for the first 2 weeks of a theater run go back to the studio (so the movie theater survives on selling popcorn and stuff). This tapers down until the theaters get 100% of ticket sales about 2 months later. The last movie that theaters made profits from displaying was The Full Monty - it got a small release in 1997 but those theaters played the movie for months.
I worked with some guys who did special effects for movies & TV shows.
>so the movie theater survives on selling popcorn and stuff)
Apparently some of those profits now go to the studio too? Some of the deals being made sound borderline criminal to me.
This sounds like the "360 contracts" that record companies require bands to sign. When bands are touring and getting an audience, they frequently sell CDs and T-shirts. The "360 contracts" require the band to give a percentage of that income to the record company and frequently require them to purchase CDs from the company at a higher-than-wholesale prices.
Super interesting, do you feel this is death by 1000 cuts or can you point at the economics no longer working as small handful of causes (i.e. rise of cost of living in LA, move towards direct to streaming rather than theater releases, AI workflows)?
I think the economics of a global entertainment and wealthy persons' playground is what is "ruining" Los Angeles. Earlier in my time there, I spent time in an uber-wealthy circle and basically encountered Epstein-class people doing what they do with the children of their own staff, and that is when I noped out of that entire social circle. There is not much that can be done when you see such wealth pursuing such agendas and you also see them with celebrities, as well as senior city and state officials. Such people are untouchable as far as the law is concerned. Los Angeles is sick with treating others as disposable, with sexual aspects included. And it is not "Los Angeles", this is human nature without boundaries.
> encountered Epstein-class people doing what they do with the children of their own staff
kind of glossing over something pretty major
yeah this is what I heard from pretty much everyone in the business down there. since production has gone international LA can't compete with, say, Romania. You can ship out your must-haves and rely on locals for the rest, the savings are enormous.
There's some stuff you can still do in LA but a huge amount of actual shoot days are in countries with lower costs and fewer labor restrictions.
Obsession was shot entirely in Burbank for chump change.
My take on the problems including cost sickness:
1) Supply/demand. There's actually a shortage of quality movies relative to what the market will bear, one need only look at the occasional breakout hit like Obsession to see that it's possible to make a ton of money if you understand the demand signals.
2) Demand signals. Median age of someone with greenlight authority is ~62. In the 80s, there were 30-year-olds running entire studios. No disrespect to Boomers, but this business is about marketing cultural products and they have no idea about the culture. This also creates significant demographic headwinds in the job market.
3) Costs. Wages/COL are a part of it, as are unions, star power demand, and how companies like AAPL/AMZN can do streaming as a loss-leaders, which creates a lot of downward pressure. The biggest one is that in theatrical CAC > LTV. You can spend 2x your production budget on marketing and that investment evaporates the first week of showing – there's no real brand loyalty to studios/streamers, especially now that they've commoditized their IP and put it on rotation through the online platforms.
4) Originality. Franchises, sequels, and remakes were roughly three-quarters of 2025, and nine of top ten 2024 worldwide grossers were sequels. This is a result of local minima/risk arbitrage in the studio's portfolios, the bottom line is that people will still show up for a Spiderman movie even if its crappy b/c of the pre-aware IP and there's nothing better out there. There are wonderful exceptions to this of course, like Christopher Nolan and many indie films.
5) Politics. Hard to not deal with politics amidst the outrage cycle, but the easiest way to achieve that is to have a plurality of viewpoints – which you can get if you stop trying to bend beloved IP to contemporary politics and just make new shit!
Ad 2.) 30 years old are on the youtube. They do their own thing.
And it is also actually ok to do entertainment for older people, including boomers. People act as if there was something shameful about over 40 existing and have entertainment for them. It is as ok as enrertainment for young.
Video game industry analysts are predicting the same is going to happen to their (my) industry. Contract out more and more work to SEA/China/Poland et.al. It's extra painful because games are relatively cheap to localize (fantasy is universal, it's just translating text and words), so studios based in cheaper parts of the world already have an advantage and they have access to the west markets. Global competition can be brutal.
As an aside, there are large portions of the US where coastal folks dont want to live. These places are 2-4x cheaper (compared to costal game industry hubs) and could be cost competitive.. but it's probably not going to happen.
Probably still more expensive and with less concentrated talent than the other places outside the US.
It really breaks the illusion for me when a movie is shot where it isn't set. I'm like, "What? They don't have pine trees in Austin."
I was watching a terrible movie, Wolverine, and the titular character is driving through Canada, we're told, and I found myself thinking that "huh, that bit of Canada looks a lot like New Zealand, interesting."
Then he drives across a one-way bridge, and tracking shot above the car captures the big arrow New Zealand paints on the exit lane indicating you should drive in the *left* lane (started doing this after few too many tired tourists from RHD countries reverted to habit upon leaving a one-way bridge causing a head-on collision further down the road). They could've edited the arrow out, surely.
TL;DR thought Canada in a movie looked like New Zealand, it was New Zealand.
Blockbusters and tax credits started the trend, but green-screen filming sure accelerated it. Now that so many movies are almost entirely CG, it really doesn't matter where the green screen studio physically exists.
The silver lining (for Americans) is that Hollywood movies are still very Hollywood. Canadian actors, Canadian crews, and Canadian filming facilities all combine to make utterly American films. If real locations are used, they're carefully chosen so that Vancouver stands in for New York, Calgary for Minnesota, etc.. Canadian references, accents, and values are all carefully erased.
The one thing that seems to stay stubbornly American is the money people.
Explains why I have slowly stopped watching live action. I can't stand the cognitive dissociation that needs to happen for me watch.
Simple one light is different in NYC and Toronto.
When corporations grow to a certain size, they become banks.
The same thing kind of happens to industries when they get dominated by a few large players. The large players are banks. The core of the industry becomes a form of finance.
Hollywood is now the financial capital of the film industry, not where films are made. Hollywood finances films.
I absolutely don’t want to imply there’s any one reason that he led us to where we are. This comment isn’t to try to undercut or malign some great data and investigation. But an article on this topic that literally does not include the word union in the entire text is not painting a full picture.
You can fairly point out that unions still exist in Georgia, and that the UK and other European locations have robust worker protections - this isn’t a situation of union work vs. non-union work. But the extent to which unions in California have a stranglehold on the movie industry is absolutely part of the story here.
Given that New Zealand actually changed its laws to prevent unionisation in order to ensure The Hobbit was made there, I think unions are definitely a factor.
I have no idea how strong the unions related to film are in the UK. It varies a lot between industries.
Ok, what part then?
>"If this has all drifted into bummertown, it’s because many of Hollywood’s problems can be traced back to a single economic theory of everything: the rent is too damn high. From there, everything else starts to unravel."
It's really understated just how much this is behind absolutely everything today. The only reason it became normal for SV software companies to pay 100k+ salaries to interns in the 2010s is because half of that had to be handed over to a landlord every month just to have people physically able to show up to your office. This is why Europe and Asia have completely dominated production of all the great AAA games over the last decade; when creative people can afford to live somewhere, all of the sudden you have the resources to truly focus on a product.
Cue https://worksinprogress.co/issue/the-housing-theory-of-every...
Also, a lot of real estate is owned by the Hollywood investors or their close friends, so this is a circular economy where they get rich, then buy property in that place and get even richer with real estate increasing in value. The same thing happened in Silicon Valley, Wall Street, and many other places.
That rent is simply a tax (tribute) paid from people (peasants) to property owners (lords.) It's why people who own capital are the wealthiest that they've ever been in history despite producing nothing and increasingly being of severely subnormal intelligence.
The distraction is that a lot of people think that they are property owners who are not. The bank owns your property, you're a tax farmer. The people who own the bank are your bosses. They are granted the right by the state to loan you the money to buy an overvalued property, without actually having the money to loan you, and on the condition that the property that you bought is theirs if you miss a repayment on the money that they loaned you that that they didn't have.
This is also why building more housing does not work in the long term to lower rents. We have a surplus of housing, just like we have a surplus of commercial property. But we have arbitrarily changed expectations for the margins of finance capital. The tax farmers (most landlords) are a distraction so that their tiny margins can be pointed at - because the money was made from the property when they purchased it. Now they're behind the 8-ball trying to make the payments, until they lose their job to a better tax farmer.
If you build 9000 shitty units at the site of a grocery store, you can raise all of the rents around them because the 9000 shitty units are now an escape valve against displacement and dislocation. The next step is to raise the rents on the 9000 shitty units, by any means necessary, even if it means keeping half of them empty for a decade, and using them to write off your taxes on other properties you own.
The fact that there's no grocery store and no parking for 9000 units? Your problem.
YIMBY activism is entirely financed by these people, which is why it's so loud.
I think there is a huge aspirational factor here too. A lot of people think "I will be rich one day".
People also feel secure if they have wealth, even if its assets that are illiquid. If you sell your house you have to buy another or pay rent.
> It's really understated just how much this is behind absolutely everything today. The only reason it became normal for SV software companies to pay 100k+ salaries to interns in the 2010s is because half of that had to be handed over to a landlord every month just to have people physically able to show up to your office.
Well, it became normal because there were people (sometimes, but not always, the same people with significant holdings in the software companies) who held a lot of real estate and knew if they wanted that real estate to be more valuable, they'd need to force people to use it, meaning show up to work every day.
SV is the failure it is today because it concentrated all of the talent in one place needlessly. Something the rest of the country explicitly worked to not see happen.
In the next decade, AI will be gutting every industry associated with hollywood other than nvidia and tmsc.
I saw a Trump clip not long after his inauguration where he said he was unhappy about Hollywood moving overseas due to tax cuts but so far nothing.
Like with manufacturing in China, allowing your competitor countries to build up expertise means at some point it become difficult to regain top place. And whilst bulk of the profits may flow back to the USA at present, may not always be the case.
It’s not like it’s been hidden, all USA needs to do is reduce the gap so financially there is no incentive to go abroad.
Great for other countries though.
Something interesting to note, is that while "Hollywood" is fast losing its status as the nexus of the traditional film / tv industries, LA in the broader sense is already very well established as the global (Well at least "Western") hub of the content creator economy. Literally thousands of wannabe / up and coming YouTubers, Tik Tokers and "Influencers" of all sorts are packing up their lives and moving to LA every year in order to be closer to each other, and to the talent pool of cast-off film and tv folks that live in LA.
The "Cost disease" seemingly hasn't yet infected that industry at least (Or the infection is still in its early incubating stage) though I think that's in large part due to the fact most of the content creators aren't working within the established industry framework, but rather are intentionally trying to work outside of it, in order to avoid paying union rates.
$10k rent on a hollywood hills mansion isn't so bad when you have it sleeping 10-15 20 year olds.
Lots of things like this have happened.
Silicon Valley stopped making computers, or any kind of manufacturing. Who knows, maybe some black projects exist.
But I was told that some underground utilities in the area were non-standard, not just water, power, sewer, but also nitrogen or more.
To be fair: the quality of movies produced by Hollywood has gone rapidly downhill already in the 1990s. You only need to compare the movies Quentin Tarantino makes; now personally I think Pulp Fiction is still by far his best work, but I concede that the movies he created lateron were above average (though I would not go as far as many others, who'd rate these in the 8 to 10 point ranges; I'd go more between 6 to 7 or 7.5, largely because there are a few smaller issues cropping up and I always notice these when I compare them with Pulp Fiction, which was really good; actually really well-made).
I noticed this in the 1990s in many movies. For instance, Independence Day - the computer animation pissed me off. I found them bad. Even Terminator 2, where evidently many people say it was great, I was nowhere near as convinced; I found the first terminator better and more "logical" and more consistent, too. But things decayed quickly in the 1990s really. Even movies such as Avatar I find total garbage. And while I am not totally against superhero comic/marvel adaptations (I liked xmen and in particular Hugh Jackman as wolverine), these are always the same formula. Tons of CGI, big fights where nobody knows what is going on, very little thought elsewhere in that formula. There are exceptions, but by and large these things keep on happening. Individual directors manage to break out of the mold (Chris Nolan) but by and large movies really SUCK now compared to the "oldschool days". And while some of this may be due to me becoming more critical, the production quality just sunk. Take movies such as Megalopolis - this captures what is going wrong. It seems as if the whole movie industry has partially collapsed in the last +25 years and they don't really know what to do to change this. The same has happened to games, by the way. It is almost as if only one formula exists only now.
Investment-driven development. When it's no longer about creating something compelling, but about convincing the investors that banking the production means a fairly safe ROI, you stop getting creative works by auteurs and you start getting sequels, remakes, and low-stake, inoffensive, mediocre, forgettable, bland sludge. At the upper end, investors give directors checklists and guidelines to limit their authorial voice. That's why it doesn't matter who the directors of the MCU movies have been. They're just Disney-produced movies. A film student could have directed them and it wouldn't make a difference.
What about the woke movement and movies turning into politics?
Because of financial incentives. And it makes critics sad when films aren’t shot where their story is based. Saved you reading it.
I wonder if this will change as Hollywood is eyeing three $1B+ box office earners back to back to back this summer
But weren't they all made outside of Hollywood? Emeryville, around Europe and the UK, and then the UK for Toy Story 5, Odyssey, and Spiderman respectively?
A decent amount of odyssey was actually filmed on the universal backlot
Which is cool, but also likely an outlier due to Christopher Nolan's usage of practical effects vs CGI. His clout probably helped with the funding of that tbh.
They are still building new soundstages as we speak.
Unlikely.
Money is money, and if you can film in UK where you get tax incentives and lower costs there's no reason to film in Hollywood.
I mean, kind of good maybe?
As someone not in the USA who loves movies, it is too easy to get sick of LA and desert locations everywhere.
A lot of non-LA/desert scenes are LA sets.
Hollywood makes slop now, the last movie I saw was some iteration of Mission Impossible where the genius agent defeats the all powerful AI and that just felt like lack of imagination.