Money For Nothing

money for nothing media c-suite

Why the whole planet is competing to attract film & television productions.

Everyone wants in on the action.  For every dollar, euro or pound spent by governments as production incentives, local economies can expect an immediate return on investment in economic output, plus skilled employment and long-term inward investment. 

According to research conducted by the Media C-Suite, global spending on production of film, high-end TV and music content reached US$240 billion in 2022, including short-form scripted and unscripted content, music videos and television advertising content.  This does not include the costs of producing sporting events, stage performances, concerts and other live exhibitions, or printed literature. Roughly 40% of that expenditure, or approximately US$95.52 billion, was in North America. California hosted nearly half of that spend, or US$46.61 billion.

The UK’s official figures for 2022 show a receipt of £6.27 billion (US$7.66 billion) in feature film and high-end TV production spend alone. That figure is estimated to rise by 2.5X or £15.68 billion (US$19.16 billion) if production spend on music, music videos and video content for both short-form scripted, unscripted and advertising content is included.

These figures demonstrate the significant growth in content production spend since the worst days of the global Covid-19 pandemic.

According to research from Olsberg SPI, global expenditure for film and television content in 2019 rose 20% year on year to US$177 billion. But the interesting fact about content production spend isn’t it’s impressive annual growth rate. According to that same research, the total economic impact of US$177 billion in expenditure out of content production budgets was US$414 billion throughout the production supply chain.  For economies with well-established media production sectors, such as California and the United Kingdom, this provided an average of 133.9% in immediate return on expenditure to the economy equal to a multiple of 2.34X budget expenditure. 

Put another way, for every dollar of budget expenditure on a new film or television show, local economies generated US$2.34 in real economic output throughout the supply chain.

See, Global Screen Production – the Impact of Film and Television Production on Economic Recovery from Covid-19, an Olsberg SPI report commissioned by the Association of Film Commissioners International.   

Governments take this type of economic multiplier very seriously as a tool for managing gross domestic product, particularly when public sector investment into the economic development of the screen production sector is already paying off. 

For example, data from the UK Office of National Statistics shows that production expenditure for film and television was instrumental in preventing the British economy from dipping into recession in 2019.  According to a report by ScreenDaily, film and television production helped move UK GDP back into the black and stabilise the post-Brexit economic melt-down.

Competition Mounts

As the global economy continues to emerge from the Covid-19 pandemic, governments everywhere are facing depleted treasuries and severely strained tax payers.  Traditional economic pillars such as banking, manufacturing and transportation are increasingly fragile just as global trade and finance are needed most.

But the Media & Entertainment industry continues to boom. 


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With global revenues predicted to hit more than US$2.4 trillion this year, the Media & Entertainment industry benefits from a unique combination of growing human populations, expanding broadband internet penetration and media markets outside of the English-speaking world rapidly catching up in terms of leisure time and income per capita. 

Competition within the most lucrative (and increasingly crowded) markets of North America also drive global expansion by the Media Majors, which include all the traditional Studios and now increasingly integrated Streamers. 

With global content production costs of US$240 billion against US$2.4 trillion in revenues, the Media & Entertainment industry is highly motivated to deliver more high-quality content to an ever expanding audience with an increasing appetite for more of everything.  With the near saturation of the market in the United States, that means producing more content for audiences everywhere else.

Upstarts or Disruptors?

In an effort to boost economic development, newer content production markets are increasing their efforts to feed both local and international content demand.  What government finance experts outside of California and the UK are most keen to do is attract “runaway” projects from the traditional production hubs of Los Angeles and London. 


“In the post-Pandemic era of remote work, the scene is being set for a serious geographic re-distribution of the Media & Entertainment Industry.”


Already, several US States such as New York, New Mexico and Georgia have become major production hubs by offering greater incentives than California can.  This has come in lock-step with California’s declining political will to continue providing tax-payer support to a lucrative industry concentrated in Los Angeles County when so many other industries struggle across the wider-State of California. 

The UK government is finding it similarly difficult to argue in favour of expanding tax-payer support to the well-established Media Majors in London when other industries and regions are in dire need of assistance.

In contrast, other governments are foregoing the use of tax credits that shelter the revenues of already profitable production companies, primarily the Media Majors.  In contrast, they are expanding their competitive advantages by offering direct subsidies in the form of contractual deals to refund as much as 40% of what production companies are willing to spend if they agree to shoot their projects outside of California or the UK.  Such deals in turn support a production company’s ability to finance a full production budget, secure talent and prepare to spend big. 

For a recent comparison of film and television incentives offered globally, see the Global Incentives Index 2022 from Olsberg SPI.

That strategy is already reaping benefits for emerging production hubs in Italy, Spain and Greece. 

Aspirations and economic development imperatives are driving new film incentive programmes in countries with little or no production sector experience in hope of jump starting new areas of job creation and sustainable economic growth. Some, such as Saudi Arabia are directing billions of dollars into the effort from sovereign wealth and local investors, with expansive strategies across Media & Entertainment globally.


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Other countries, such as Cyprus, are marketing their unique climates, geographies and cheaper labour costs to entice both foreign film productions, and foreign direct investment, into modern production infrastructure and vocational training.

It is both sound strategy and a very real opportunity to meet growing global demand for entertainment content at moment when both LA and London are at max capacity.

Increasingly, consistent film and television production supports multiple sectors of the local economy for emerging production locations as soundstages, production support companies and professional service providers are engaged and paid out of production budgets.  This has a direct effect on employment from the local communities and tax revenues to government.

This in turn further benefits independent producers and Media Majors alike, and offers additional incentive to locate not only their productions, but their entire businesses further away from the traditional corporate and production hubs of London and LA.  This has been demonstrated as successful production companies, including Netflix, acquire entire production campuses in New Mexico, establish permanent headquarters in the State of Georgia in the US, or locate all of their Spanish-language production facilities around Madrid in Spain.

In the post-Pandemic era of remote work, the scene is being set for a serious geographic re-distribution of the Media & Entertainment industry.

The net result is considerable financial and political motivation around the world to build market share with any eye on what LA and London have to loose. 

5 Comments

  1. Good article. But the comments have to make you laugh. Funny that no one from the US or the UK understands that tax credits and rebates are not the same thing. The tax credits in California go unused most of the time and can’t be traded or transferred. Only a few companies really befit from them. Everyone in LA calls the subsidies in Greece, Spain and Italy “tax credits”. Every accountant, lawyer and investor out there understands the difference. This makes investors really nervous when the professionals in media don’t know what they are talking about, or at best are using words incorrectly.

  2. I don’t see the tax credits as important at all to anyone but the big public companies in this space. That all seems like politics to me. The real impact on spending in a cottage industry is the rebates being offered in places like Italy and Spain. Why would any indie film maker not go to where 30 or 40% of their budget spend gets paid back to them as contract revenue 18 months later. That’s revenue! And you can borrow against it as almost zero risk to the lender? LA is doomed.

  3. some of the US state tax credits are losing their attractiveness due to the excessive time it takes to claim them (ie up to 7 years now in NY), and their unreliability, while new tax credits are springing up in places like Greece and Italy which are becoming very attractive. That said, London is still best for crews and facilities, and as you say, the U.K. tax credit works very well. You also left out Canada, a major player in service production.

    • Gavin. What tax credits do you mean for Greece? I found their tax credits to be nothing much compared to their rebates. 35% on local spend, and guaranteed by the Government. Italy is going to 40% I think, but they also offer few credits against tax liabilities; some for R&D I think. We have to set up a local Greek company for some of the expenditure, but that is not where the IP or the license fees are. Am I missing something?

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