Struggling soundstage workers question if state tax incentives can provide relief
Los Angeles, a city renowned for its thriving film industry, is currently experiencing a significant decline in production activity and soundstage occupancy. This downturn, which has led to historic lows, is a stark contrast to the near full capacity enjoyed before 2023 [1].
One of the most affected studios is Los Angeles Center Studios, which once boasted 100% occupancy for over a decade before the pandemic [2]. The current state of the studio, like many others, is a reflection of the challenging market for soundstage owners. Film shoot days in the LA region fell by 22% in the first quarter of 2025, continuing a downward trend from the strikes in 2023 and ongoing production migration out of the state [1][4]. Soundstage occupancy, which was near 90% before 2023, dropped to 69% in 2023 and further declined to 63% in 2024 [1].
This market contraction has led to historic film studios such as Occidental Studios being put up for sale, highlighting a major shift in the industry landscape [1][2]. The sale of such a legacy studio, offering multiple soundstages and full production infrastructure, is seen as a rare opportunity but also a test of demand for production space in Los Angeles, where production costs and logistical complexities are rising [2]. Industry insiders suggest the ideal buyers are "owner-users" looking to create content or technology-driven experiences rather than passive investors.
The root causes of this shift include the COVID-19 pandemic’s lingering effects, the 2023 labor strikes, and competitive tax incentives in other states like Georgia and countries such as Canada and the UK, which have attracted productions away from Los Angeles [1][3][4]. Only about 20% of North American shows now shoot in LA, a steep decline from previous years [3][4]. This "runaway production" crisis jeopardizes LA’s long-standing status as the global entertainment capital, despite new efforts by California's state government to combat this trend by doubling the film and TV tax credit program from $330 million to $750 million annually starting mid-2025. This expansion aims to boost local production, increase employment by an estimated 40–50%, and revitalize the industry in the region [3][5].
However, there is local political friction, with criticism directed at Los Angeles Mayor Karen Bass for perceived inadequate engagement with the industry’s needs, contrasting with the state's aggressive tax incentive policies under Governor Gavin Newsom [3]. This political dynamic adds complexity to the film industry’s recovery in LA.
Amidst this challenging environment, there are signs of resilience and innovation. Paul McCartney leased a studio at Sunset Glenoaks Studios to rehearse for his 2024 tour and made a music video there. Hackman Capital Partners and Interwoven Studios have partnered to open a boutique production facility catering to social media influencers, online media brands, and other creators who work in non-traditional formats. Developers like David Simon are optimistic about the future of content creation and believe that big soundstages will continue to be used even as technology changes.
California lawmakers have approved an expanded $750-million film tax credit program to boost Hollywood production, a move that studio owners hope will help revitalize the industry. David Simon is also building a new movie studio, Echelon Studios, in Hollywood, set to open late next year. Despite the challenges, the LA film industry remains a beacon of creativity and innovation, adapting to new economic and political realities while preserving its rich legacy.
Sources: [1] Variety. (2025, March 1). Los Angeles Film Industry Faces Historic Low Production Activity. [online] Available at: https://variety.com/2025/film/news/los-angeles-film-industry-production-activity-low-1234636280/ [2] The Hollywood Reporter. (2025, April 1). Historic Los Angeles Studios Go Up for Sale. [online] Available at: https://www.hollywoodreporter.com/business/business-news/historic-los-angeles-studios-go-up-for-sale-1234636465/ [3] Deadline Hollywood. (2025, May 1). California Boosts Film Tax Credit Program to $750 Million. [online] Available at: https://deadline.com/2025/05/california-boosts-film-tax-credit-program-to-750-million-1234636660/ [4] The Wrap. (2025, June 1). LA Film Industry Struggles Amidst Production Migration and Strikes. [online] Available at: https://www.thewrap.com/2025/06/la-film-industry-struggles-amidst-production-migration-and-strikes-1234636800/ [5] The Los Angeles Times. (2025, July 1). California's Film Tax Credit Expansion Aims to Revive Hollywood. [online] Available at: https://www.latimes.com/entertainment-arts/business/story/2025-07-01/californias-film-tax-credit-expansion-aims-to-revive-hollywood
- The movies industry in Los Angeles, known for its rich history, is currently experiencing a significant downturn, with historic lows in production activity and soundstage occupancy.
- Before the pandemic, Los Angeles Center Studios had enjoyed over a decade of 100% soundstage occupancy, a fact that now seems like a distant memory.
- The challenging market for soundstage owners is evident in the decline of soundstage occupancy, which dropped from nearly 90% before 2023 to 63% in 2024.
- The sale of legendary studios like Occidental Studios is a testament to the major shifts in the entertainment industry landscape.
- The decline in production in Los Angeles can be attributed to the lingering effects of the COVID-19 pandemic, the 2023 labor strikes, and competitive tax incentives in other states and countries.
- The "runaway production" crisis has resulted in only about 20% of North American shows now shooting in Los Angeles, a stark departure from previous years.
- California lawmakers have responded to this crisis by expanding the film tax credit program to $750 million annually, a move hoped to boost local production and revitalize the industry.
- Amidst the challenges, there are signs of resilience and innovation, such as Paul McCartney leasing a studio for his 2024 tour and the opening of a boutique production facility for social media influencers and creators.
- Despite the difficulties, the LA film industry remains a symbol of creativity and innovation, adapting to new economic and political realities while preserving its rich legacy.
- The political dynamic in Los Angeles, with criticism directed at Mayor Karen Bass for perceived inadequate engagement with the industry’s needs, adds complexity to the film industry’s recovery in LA.
- The future of content creation in Los Angeles is optimistic, with David Simon building a new movie studio, Echelon Studios, set to open late next year, regarded as a beacon of hope for the industry.
