Studios are looking more and more to take production out of North America

Hollywood studios aren't commissioning as much as they used to and outsourcing productions to other countries

By Mary Kate Carr | August 15, 2024 | 12:38pm

Photo by: Ollie Upton/HBO

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Studios are looking more and more to take production out of North America

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The comeback from last year’s strikes continues to be sluggish and difficult. Though the writers and actors unions won some incredibly hard-fought battles, the studios were gun-shy after the contracts were ratified. Writers have been raising alarms that nobody’s commissioning new projects, and studios are reportedly stingy with the projects that do get the green light: “It’s the worst market that’s ever existed,” Dan Erlij, United Talent Agency partner and co-head of its television literary department, told The Los Angeles Times in a new overview of the Hollywood scene. “The correction has been dramatic, profound. … The deals are being remade at fractions of deals that have existed for those people in the past.”

According to The L.A. Times, there’s reason to hope the situation will improve now that the Hollywood Teamsters and IATSE have also reached deals with the studios—with no threat of a strike looming, everyone can get back to work comfortably. And Ampere Analysis data reveals that the big studios are beginning to commission more projects, up 39% in the first half of 2024 compared to the second half of 2023. But it’s still down overall from early 2023 and 2022 numbers, and it seems likely that we’re past the peak of Peak TV, so there will continue to be fewer shows.

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The mantra for those sticking it out in Hollywood is reportedly “survive ’til 25,” but it may be that some of these production jobs are never coming back. Not only are the studios commissioning fewer programs, they’re also outsourcing. Per The L.A. Times, “roughly 60%” of Netflix and Amazon’s commissions in the first half of the year were on other continents. As the outlet reports, “It can cost $8 million to $10 million an episode for a drama series shot in the U.S., whereas the same show in Europe with tax credits can be made for as low as $4 million an episode, according to estimates from industry experts.”

There are solutions to some of these problems—better tax incentives for local productions, for instance—but the issues facing the industry are thorny. Of course, most of that comes from the top down. The big studios are facing major financial peril, and it’s the people on the lower rungs of the ladder who are going to face the consequences. (See: Paramount Global’s recent layoffs.) Hopefully this is a “worse before it gets better” situation, but it’s clear that Hollywood is having real growing pains at the moment.