Netflix is investing $1 billion to build a 12-soundstage East Coast base in New Jersey, even as overall U.S. film and TV on-location production slowed by 10 percent in the first quarter, according to The Hollywood Reporter. Netflix's $1 billion investment shows a studio's long-term commitment to a region, creating hundreds of jobs and injecting significant capital into the local economy.
Overall U.S. film and TV production is slowing and moving abroad, but specific U.S. states are experiencing significant growth due to targeted investments. The slowing of overall U.S. film and TV production and its move abroad, contrasted with specific U.S. states experiencing significant growth due to targeted investments, reveals a complex industry where national trends mask crucial regional developments.
The geographic center of gravity for film and TV production will continue to fragment, with studios prioritizing locations that offer the most attractive financial incentives and infrastructure, leading to a more distributed global industry. The fragmentation of the geographic center of gravity for film and TV production, driven by studios prioritizing locations with attractive financial incentives and infrastructure, alters traditional production models and creates new economic centers.
US Domestic Shifts: New Hubs Emerge as Old Ones Falter
New Jersey experienced a 45 percent year-over-year increase in filming count during the first quarter, coupled with a 37 percent rise in production spend, according to The Hollywood Reporter. New Jersey's 45 percent year-over-year increase in filming count and 37 percent rise in production spend contrasts sharply with traditional production centers. California's production spend grew 2 percent year-over-year to $1.48 billion, even as its filming count dropped by 14 percent.
New York also saw its filming count decline by 14 percent, with production spend staying flat year-over-year, The Hollywood Reporter stated. The data suggests that while some traditional states like California maintain spending levels, the significant drop in filming activity in established hubs suggests a fundamental shift in where productions operate within the U.S.
Based on The Hollywood Reporter's data, states like New Jersey, with a 45% year-over-year increase in filming count and a $1 billion Netflix investment, are not just attracting production but are actively reshaping the industry's domestic geography, forcing traditional hubs to re-evaluate their competitive edge.
The International Exodus: UK Leads the Global Race
Last year, 45% of all U.S. films and scripted television shows were shot internationally, a notable increase from approximately 33% in 2022, according to the Los Angeles Times. Last year's 45% of all U.S. films and scripted television shows shot internationally, a notable increase from approximately 33% in 2022, illustrates a clear trend of productions seeking locations beyond U.S. borders. The U.K. emerged as a significant beneficiary, recording the second-highest production spending in 2025 at $6.97 billion, representing a 15% increase.
International feature film and TV production spending contributed about $7.8 billion to the U.K. economy last year, the Los Angeles Times reported. The dramatic increase in international shooting, particularly the U.K.'s growth, shows a major global redistribution of film and TV production away from the U.S. The Los Angeles Times' finding that 45% of U.S. films were shot internationally, coupled with the 20% overall U.S. production spending decrease, indicates that the U.S. is rapidly losing its dominance as the primary production location, pushing studios to either chase international incentives or anchor in newly incentivized domestic states.
The Global Shift in Spending: Traditional Leaders Lose Ground
The U.S. led all countries with $12.15 billion in production spending last year, though this figure represents a 20% decrease from 2024, according to the Los Angeles Times. The U.S. leading all countries with $12.15 billion in production spending last year, despite a 20% decrease from 2024, signals a contraction in the U.S. market's capacity to host large-scale projects. Canada, another traditional production partner, also experienced a decline.
Canada attracted $4.61 billion in high-budget production spending last year, a 13% decrease from 2023, the Los Angeles Times reported. The significant year-over-year spending declines in both the U.S. and Canada point to a broader trend of traditional production powerhouses struggling to retain their market share. The contrasting trends of California's 14% filming decline with a 2% spend increase (The Hollywood Reporter) suggest that while traditional production centers may retain high-budget projects, they are bleeding the volume of mid-to-lower tier productions, marking a fundamental shift in their market role.
The Future of Incentives: A High-Stakes Competition
The competition for film and TV production dollars will intensify as states and countries vie for studio investment. Programs often require qualified film production expenses to exceed $1 million per production, as seen with New Jersey's Film and Digital Media Tax Credit Program, according to Programs Njeda. This high threshold ensures that only substantial projects receive incentives, influencing where major studios choose to establish new bases.
States and nations must offer aggressive tax credits and streamlined application processes to attract these larger projects. The high threshold for qualifying expenses suggests future competition will increasingly focus on attracting large-scale, high-budget productions, making robust incentive programs even more critical for states and countries. This strategic competition will continue to fragment the production environment, moving resources to areas with the most attractive financial packages. By 2026, major studios like Netflix, with its $1 billion investment in New Jersey, are clearly signaling where they believe the future of domestic production will be anchored.
Understanding Production Incentives: The Practicalities
How complicated is the application process for film tax credits?
Securing film tax credits involves an application process, which for programs like New Jersey's, has an estimated completion time of about 40 minutes, according to Programs Njeda. This relatively short estimated time suggests that states are working to streamline administrative hurdles, making their incentive programs more appealing to production companies looking for efficiency alongside financial benefits.
