The film and TV industry's spending habits are shifting, with New York and New Jersey gaining ground on California in the race to attract Hollywood's attention. California, once the clear leader, has doubled its incentives to halt the exodus of production to more attractive tax locales. This strategy appears to be working, as evidenced by the state's $1.33 billion in production spend, a 5% increase year-over-year, and a 11% growth in filming count. This resurgence is particularly notable given the declining filming activity in the first quarter of this year.
New York, on the other hand, has seen a 19% increase in filming count and a 57% surge in total production spend to nearly $1.06 billion in the second quarter. This is largely due to the removal of the cap on above-the-line qualified spending and other incentive efforts. The state's soundstage space has also expanded significantly, with a 43% growth in inventory since 2020, and motion picture employment reaching 86% of pre-pandemic levels.
New Jersey, while experiencing a decline in total filming activity, has seen a major increase in production spend to $387 million for the quarter. This is attributed to a dip in feature film starts but a rise in episodic TV filming. The state has designated Netflix, Paramount, and Lionsgate as studio partners, offering long-term incentives to produce titles there. Netflix is building its East coast soundstage base in New Jersey, while Paramount signed a 10-year lease for 1888 Studios in Bayonne, just across from New York City.
However, not all states are benefiting from this shift. States like Georgia, New Mexico, and Illinois, which were once on the upswing, have seen dips in production spending and activity this quarter. Georgia, in particular, has experienced a 40% decline in filming activity and a 43% decline in production spend, slipping below New Jersey in terms of total spend. This decline is across both episodic and live-action features.
The key to attracting production spending, according to ProdPro chief Alex LoVerde, lies in the characteristics of incentive programs. Meaningful credits, easy monetization, fast payment, and consistency from year to year are essential. Producers are risk-averse, and the more predictable and user-friendly a program is, the more competitive it becomes. While incentives are crucial, other factors like experienced crews, infrastructure, great locations, and a desirable talent pool also play a significant role in attracting productions.
