Ernst & Young study finds Hollywood now spends majority of film budget

Major Hollywood studios now direct more than half of their film production budgets to locations outside the United States, a sharp reversal from 25 years ago when domestic spending dominated, according to a new study commissioned by the entertainment industry's leading unions.\n\nThe research, conducted by Ernst & Young, examined spending by major American studios on film and television projects between 1999 and 2024. It covered movies with budgets of at least $5 million and television episodes costing at least $1 million each.\n\nOn the film side, the decline was steep across multiple measures. The share of production spending on movies filmed at least partly in the US dropped from 74% to 42% over the period. The proportion of cast and crew employed on US-based productions fell from 72% to 43%, and among the 25 highest-budget studio films, domestic spending declined by 40%.\n\nTelevision production showed a similar pattern. Episodes filmed partially or primarily in the US fell from representing 96% of major studio output to just 70%, while the share of cast and crew working on US-based TV productions dropped from 86% to 58%.\n\nThe study lands shortly after a bipartisan bill was introduced in Congress to create a federal film tax incentive. Studios, unions and producers have collectively backed such a measure as a way to restore the United States' standing as a competitive global production hub. The proposed incentive would offer a base rate of 20% on qualifying cast and crew spending, with the possibility of reaching 30% under certain conditions.