Los Angeles' share of U.S. scripted series filmed in the city plummeted from 40% in Q1 2019 to less than 25% in Q1 2026, according to Luminate. A drastic reduction in local production means fewer jobs and diminished economic activity for the region. The decline impacts technicians, artists, and supporting businesses, marking a significant shift in where film and TV production occurs.
California significantly boosted its film and television tax credit program funding and rates. Despite this, movies and TV productions are rapidly leaving the state, creating a tension between policy efforts and market realities.
California is trading significant public investment for a diminishing return on local production. California's trade of significant public investment for a diminishing return on local production confirms that underlying economic forces driving productions away are more powerful than financial incentives alone.
California's Ambitious Bid to Lure Productions Back
California's Film and Television Tax Credit Program 4.0 offers a 35% to 45% tax credit for qualifying productions, according to TheWrap. California's aggressive incentive structure, offering a 35% to 45% tax credit for qualifying productions, aims to counter the outflow of projects and make the state more competitive.
Television series relocating to the state in their first year of receiving a California tax credit are eligible for a base credit of 40%, TheWrap also reported. The provision that television series relocating to the state in their first year of receiving a California tax credit are eligible for a base credit of 40% specifically targets high-value, established productions to bring their entire operation to California. California has not only increased funding but also enhanced its incentives, specifically targeting high-value and relocating productions.
The Unrelenting Decline in Los Angeles Production
- 40% to less than 25% — Los Angeles' share of U.S. scripted series filmed in the city dropped from 40% in Q1 2019 to less than 25% for Q1 2026, according to Luminate.
- 10.7% — Shoot days in Los Angeles increased by 10.7% in the first quarter of 2026 compared to the last quarter of 2025, according to TheWrap.
- -3.3% — Shoot days in Los Angeles were down 3.3% year-over-year in Q1 2026, according to TheWrap.
Despite a short-term quarterly bump in shoot days, the year-over-year data signifies a sustained erosion of Los Angeles' dominance in scripted television production. The year-over-year data, signifying a sustained erosion of Los Angeles' dominance in scripted television production, reveals a deeper systemic shift rather than a transient issue, as the overall market share continues to shrink.
The Disappearance of Mid-to-Low Budget Series
The composition of U.S. scripted television has shifted dramatically, with lower-budget productions facing significant challenges.
| Metric | Q1 2019 | 2025 | Q1 2026 |
|---|---|---|---|
| U.S. Scripted TV Series under $5M/episode | 82% | <67% | N/A |
| U.S. Scripted TV Series under $1M/episode | Significant | Nearly Disappeared | Nearly Disappeared |
Figures compiled from Luminate data.
Series costing under $5 million per episode, which comprised 82% of U.S. scripted TV releases in Q1 2019, accounted for fewer than two-thirds in 2025, according to Luminate. Furthermore, shows costing under $1 million per episode have "nearly disappeared" from the state. The dramatic shift towards higher-budget productions, with series costing under $5 million per episode accounting for fewer than two-thirds in 2025 and shows under $1 million per episode nearly disappearing, confirms that the economic environment, even with tax credits, is no longer viable for most lower-cost scripted series.
Who Benefits, Who is Left Behind?
California's tax credit program appears to selectively benefit certain segments while others continue to struggle. For the first time, animated productions are eligible for California's tax credits, according to TheWrap, a strategic move to recapture specific industry sectors. However, despite animated productions becoming eligible for California's tax credits, the overall data reveals that the benefits remain highly selective, favoring large-scale, relocating television series over the broader local production ecosystem, particularly mid-to-low budget scripted television.
Beyond Incentives: A Look Ahead
California's aggressive tax credit expansion, while seemingly a robust defense, is proving to be a costly band-aid that fails to address the underlying economic forces driving low-budget scripted series out of the state.
- Since the expansion, 147 film and television productions have been approved for tax incentives in California, a 53% year-over-year increase, according to TheWrap.
Despite the program's success in attracting a higher volume of applications and approved projects, experts contend that fundamental cost structures and the competitive landscape outside California remain too attractive for many productions. The contention by experts that fundamental cost structures and the competitive landscape outside California remain too attractive for many productions necessitates broader policy considerations beyond financial incentives alone. The state's strategy of increasing incentives and broadening eligibility to animation effectively subsidizes a different industry segment, while the traditional bedrock of Hollywood's scripted TV production continues its rapid decline.
If current trends persist, the shift towards high-budget, relocating productions will likely further marginalize mid-to-low budget scripted series, potentially leading to continued contraction for local Los Angeles ancillary businesses beyond Q3 2026.
