EY Report: US Film and TV Production Share Drops to 42% as Studios Shift Overseas
A new EY report commissioned by Hollywood unions reveals that US studios now spend only 42% of film budgets domestically, down from 74% in 1999. TV spending has also declined, dropping from 94% to 64% of the total. This shift has cost the US market an estimated $4 billion annually. Congress is currently debating a 20-30% federal production incentive to counter international competitors and revive domestic jobs.
Key points
- Film production budgets spent in the US fell from 74% to 42% over the last 25 years.
- TV production spending in the US dropped from 94% to 64% during the same period.
- The US market lost an estimated $4 billion in annual spending due to this decline.
- Congress is considering a 20-30% federal production incentive to counter foreign subsidies.
- Unions plan a protest in Glendale, California, alongside Senator Adam Schiff.
Background
This decline follows a period of 'Peak TV' ending in 2022, which prompted Congress to investigate falling production jobs. In August 2026, President Trump publicly backed a federal tax credit to revive the industry, though specific implementation details remained uncertain at the time. The current legislative push aims to address the long-term global shift in production that began in the early 2000s.
Why it matters
The loss of domestic production threatens middle-class jobs in the entertainment sector and reduces the economic value generated by the US film and TV industry. A federal incentive could potentially generate $22 billion in annual domestic spending by 2035, according to the Motion Picture Association, but requires legislative action to prevent further market share loss.
What to watch
Paramount Skydance is expected to close its acquisition of Warner Bros. Discovery on Tuesday, becoming 'Skydance Corporation.' Unions will hold a protest in Glendale, California, with Senator Adam Schiff and other Democrats on Tuesday. The federal credit bill is expected to be signed into law by the end of 2026 with President Trump's support.
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