Trump is right that ‘arrogant Hollywood’ needs help, say film insiders

President Trump was right to warn that “arrogant” Hollywood is dying, film insiders said – but warn his tariff proposal would send the movie industry into meltdown.

The golden age of Hollywood is well and truly over with high labour costs, the rise of streamers and the legacy of Covid prompting an exodus from movie-making’s traditional capital, industry figures have said.

Last year, Disney made 22 live-action movies, but only three, including box office flop Snow White, were filmed in California.

This year’s biggest box office hit, Warner Bros. Discovery’s A Minecraft Movie, which took $310m worldwide in its opening weekend, was filmed in New Zealand and Canada.

A generous tax credit scheme is transplanting blockbusters to the UK, with recent successes including the $750m-grossing Wicked, which was filmed at Sky Studios Elstree and in Buckinghamshire.

Marvel Studios this week began a London shoot for Avengers: Doomsday with Sony co-production Spider-Man: Brand New Day set to begin work in the capital in August.

Meanwhile it was a case of “anywhere but Hollywood” for Marvel Studios’ latest release, Thunderbolts*, which shot in Malaysia, Atlanta, New York and Utah.

Whilst Trump blamed foreign nations for “destroying” Hollywood, others say complacency in California is the real culprit.

“Hollywood is dying on its arse because it arrogantly watched while the rest of the world went big on tax incentives which globalised production,” said one executive who works on trans-Atlantic productions.

The UK film and TV sector has boomed thanks to a scheme which provides companies with a tax credit worth 34 per cent of their UK production costs as well as a 39 per cent credit for using UK visual effects teams.

Paramount was handed £137m of UK taxpayers’ cash to help fund production of the three latest Mission: Impossible movies.

To qualify for the reimbursement, at least 10 per cent of the production costs must relate to activities in the UK, with Paramount setting up a UK subsidiary company specifically for each of the films.

But Hollywood is also being squeezed by rival US states like Georgia and New York which introduced tax incentives to encourage high-end productions.

“They had a warning when Atlanta (the capital of Georgia) threatened to take 40 per cent of Hollywood’s work with tax credits but they did nothing,” the executive said.

“There was an assumption in California that Hollywood would always be the centre of the movie world.”

In California, the costs of movie-making are becoming prohibitive.

Studios complain of red tape with permit fees for shooting soaring from 8 per cent to 17 per cent in 2023.

The Covid enforced industry shutdown was followed by a damaging 148-day writers’ strike, eventually resolved through pay agreements with the all-powerful entertainment unions, adding further costs.

The pandemic hastened what looks like a permanent shift from cinema-going to watching movies on streamers at home. US ticket sales are down 23.5 per cent on 2019, falling to $8.7bn in 2024.

Feature film production has contracted sharply in Los Angeles and is down by 27 per cent from the pre-Covid era.

This year’s devastating wildfires are set to drive the potential workforce further away from California whilst film graduates are finding there are now a vanishingly small number of entry-level opportunities in the movie industry.

California state governor Gavin Newsom, derided as a “grossly incompetent man” by Trump, responded to the tariff plan by proposing a $7.5bn federal tax incentive scheme to boost domestic production.

Industry figures believe matching, or going further than, the tax incentives offered by the UK, has a better chance of reviving Hollywood than imposing tariffs on “foreign” films, or introducing a ticket price “tax” on imported movies.

“Producers will welcome a federal tax. Studios would rather work in California than ship their work across the world,” the insider said.

“But big studios would be the biggest losers with a tariff because other countries would retaliate in kind and the US is a net exporter of movies.”

Another industry voice said that Trump’s intervention, if it results in practical measures to restore Hollywood’s dominance, could spell trouble for Britain.

The UK tax incentives, backed by Conservative and Labour governments, gave the Britain “a ten-year head start” on luring film work from Hollywood, the figure said.

“We had a great legacy of film-making, skilled labour and infrastructure to build on. It created a £5bn production business. But Canada, New Zealand and Eastern Europe have also made similar successful attempts to advertise themselves as attractive locations and now they are attracting more work.”

“The Trump blast is a wake-up call for our government to go further and faster with measures to boost our film sector.”

A Trump tariff could put at risk plans like Warner Bros Discovery’s commitment to a 50 per cent expansion of the Leavesden studios where much of 2023 box office-topper Barbie movie was filmed, creating 4,000 new jobs.

The uncertainty would hit new studio facilities, including those planned in Marlow, Sunderland, Telford in the West Midlands and the Isle of Wight.

“No-one is going to invest in those new studios if the films they produce are going to be blocked from distribution in America by a Trump tariff,” the industry figure said.