California is in trouble.
What happens to the state when southern California loses Hollywood. The industry is imploding. It is ironic that few seem to understand why.
We have another article appearing in the Los Angeles Times discussing the matter. When something hits the mainstream media, you know it is no longer hidden. It is one thing for industry specific publications to pick up on the story. They will tend to be early to the game, noticing things based upon industry knowledge.
The same is not true for the mainstream media. A site like the Los Angeles Times tends to be more general in nature. Thus, it is added weight when talking about a problem that is getting overwhelming.
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The Death of Hollywood
This is a line I have used repeatedly. We are looking at the dismantling of the industry. However, for Hollywood, this is a rapid slide down the hill. Other areas might seem things abated, at least for a little while.
Ultimately, technology is going to usurp all of this. In the meantime, there is a battle.
Hollywood is taking on other locations for the production of movies. Recently, more films are moving elsewhere. There are government incentives along with a host of other reasons to film outside California.
The Los Angles Times article focuses upon the tax breaks given. What is implied is that if California is simply competitive with tax breaks, it will get its industry back.
This might not be the case.
To start, California is a terrible place to do business. The regulation is absurd, something other companies alluded to on their exit from the state.
Simply put, it is no longer a friendly place to business. The movie industry is no different than any other: it is going to where it is treated best.
How bad is it getting?
For nearly four decades, the Santa Clarita-based company has been the largest provider of set and scenery storage, transportation and other services for the entertainment business. With the industry still in the throes of a streaming surge and the number of productions filmed in Los Angeles increasing dramatically, the company built seven soundstages.
Three years later, Triscenic — like many other local businesses — is contracting. Over the last 19 months, only one of those soundstages has been in use. The once-humming facility that housed sets across 2 million square feet in 41 buildings has been culled to half that size. In July, Gervasi laid off 78 of his 85 employees.
This is echoed by the producers:
Bill Mechanic, the former chairman of 20th Century Fox, said he didn’t even consider filming in California for his last movie, the Academy Award-nominated “Hacksaw Ridge,” or his upcoming crime thriller, “The Dain Conspiracy” — instead choosing to take both productions to Australia.
“Would I prefer to shoot here? Yes,” he said. “But you go where the money is.”
Money talks and this is why Los Angeles, as the centerpiece for film production is screwed. This is the first major issue:
At the same time, California’s rivals have continued to aggressively court Hollywood. The competition has come not just from international locations in Canada, the U.K. (where “Barbie” was filmed) and Australia, but increasingly from other U.S. states. The sobering reality was underscored this week: Only two of the 12 shows that won Primetime Emmy Awards were filmed locally.
Not only are they dealing with other locations trying to lure the production, technology is also working against the area.
Animation is moving out of the area. Companies such as Sony are scouting out of state locations. Pixar laid off a bunch of people. Even Disney is not exempt.
Loss of Influence
There is a race that is taking place. We are starting to see a lot of #2 showing up.
For example, South Florida is starting to be called Wall Street 2 as many financial firms (and hedge funds) relocated to the area. The same is true for Silicon Valley 2, which is now home of the likes of Tesla and Oracle. They are located in the Austin, Tx area.
Hollywood already has enormous clout. It is in the process of losing that. Many people are now able to set up their own studios. We see this happening with the likes of Stephen A Smith, someone who is going to be in a contract dispute with Disney (ESPN).
The bottom line is we are going to see Hollywood mirror the newspaper industry. That was decimated 25 years ago as the Internet took over. Suddenly, news was everywhere. When you opened your email applications, there were the headlines.
Text, naturally, is a much simpler media to deal with. video took a while but it is about to cross the same barrier. Hollywood is feeling the impact.
Video is showing up everywhere. It is a game of eyeballs. Of course, we are still dealing with 2024 technology. This is in its embryotic state. What will generative AI be like in 2 or 3 years?
At that time, we can expect the shift towards personalized entertainment to begin. That is not coming from a major studio.
With the loss of influence, the effects will be felt throughout southern California. It will ultimately be known as the place they use to make movies.
Even the Los Angeles Times is sounding the alarm.