Even as California Gov. Gavin Newsom tries to halt a production exodus from Los Angeles with a pledge to double the film and TV tax incentive from $330 million to $750 million a year, producers are finding abundant new and cheaper soundstage options in far-flung locations. Thats judging by the number of film studios, lots and facilities under construction throughout North America and in Europe, many hoping to capitalize on Hollywood projects that are on the move. Even stateside, its not just established rivals Georgia, New Jersey and New York a trio cited by studio execs recently polled by ProdPro as among preferred locations this year that California needs to worry about. Take Louisville, Kentucky, not exactly known as a production hub. Gus Van Sants upcoming crime feature Dead Mans Wire and Dustin Hoffman drama The Revisionist nabbed incentives to shoot in the locale. And plans are underway for a $75 million redevelopment of the historic Louisville Gardens arena into a film studio complex, with reconstruction scheduled to begin later this year, says Louisville film commissioner Soozie Eastman. The redevelopment is backed by a refundable 30 to 35 percent Kentucky film tax credit that has a per-project cap of $10 million. We have had a continuous uptick in interest in production in our region because of this generous incentive, Eastman adds.

Or take North Carolina. Veteran director and producer Robert Rippberger rebranded his Ascent Studios in the town of Spring Hope as White Lightning Studios with new investment partners, hoping that his states 25percent tax rebate will give the complex a boost. Were ready for the big streamers to come and shoot at the studio when our stages are finished, and if things like COVID hits, or a big strike hits, were ready to do concerts or weddings. Were ready to do events. All those things are on the table, Rippberger says.

That caution springs from film and TV studios hosting streaming projects no longer figuring as red-hot real estate plays for Wall Street players after the dual Hollywood strikes in 2023 led to a pullback in content expenditures by the major studios. Against that backdrop, production is still continuing to go off-shore in search of tax incentives and lower labor costs to offset increasingly fragile economics for entertainment industry content production.

Kirk Englebright, president and CEO of Dark Horse Stages, recalls opening two new soundstages in Wilmington in November, with YouTube giant Jimmy Donaldson (aka MrBeast) who grew up nearby in Greenville filming a YouTube video on the lots. Englebright says Donaldson, coming off his Prime Video competition series Beast Games, represents a model for how production will work in the future. They shoot globally. They do big business in Canada. They do big business in North Carolina. Theyre always pivoting and moving to the next project and keeping the audience captivated. Hes paving the way of where the industry is headed, Englebright adds.

Dark Horse Studios is also looking to land some Hollywood features and TV pilots. Conversations are taking place. Theres some activity going on. It didnt help anything with the wildfires in LA. But Im optimistic for the industry, Englebright says.

Driving plans for new film soundstages, whether those on the drawing boards, yet to be fully financed or just moving past municipal planning and zoning stages, is a two-step Hollywood knows well. The launch of new film studios for producers seeking lower cost jurisdictions usually accompanies access to film tax credits and local talent and crews.

California Gov. Gavin Newsom speaks as Los Angeles Mayor Karen Bass looks on during a press conference at Raleigh Studios unveiling a vast expansion of Californias Film and Television Credit Program on October 27, 2024 in Los Angeles, California. Mario Tama/Getty Images In the Lone Star State, South Side Studios in Dallas reopened in January with three new soundstages ranging from 10,000 to 20,000 square feet, alongside additional production space. Tony Armer, head of physical production at Talon Entertainment, reports bookings for two features yet to be announced that are set to shoot in the summer and fall on the new stages. I feel very good about where production is headed for Texas. There is a lot of buzz and interest in filming in the state and in Dallas.Everyone is waiting and confident that the proposed increases in the states incentive program will be approved. Once and if that happens, Texas will explode with demand to shoot in the state, Armer predicts.

Thats a forecast heavily dependent on a local film tax credit and whether Texas legislators will pass the Film Tax Incentive Bill SB 22, which has yet to be introduced. We look forward to learning more as additional information becomes available and we are supportive of any legislation that would have positive benefits for the film industry in Dallas and our state, Dallas Film Commissioner Katie Schuck says.

Or take a stalwart for Hollywood production hubs abroad, the U.K., where new tax relief for film studios is making an already busy locale a bigger draw. In February, Eastbrook Studios Londons largest film and TV studio campus, with its 12 soundstages operated by LosAngeles-based property developer Hackman Capital Partners and its affiliate the MBS Group opened its doors for Hollywood production.

The launch coincided with the U.K. government introducing a 40 percent corporate tax rate relief for film and TV studio facilities until 2034, and a new indie film incentive of 40 percent. The sector has huge potential for further economic growth and the government is ambitious for its future, Culture Secretary Lisa Nandy said at the time.

In Toronto, another white-hot production hub for Hollywood owing to tax credits and currency savings, Hackman Capital and the MBS Group are moving ahead with plans to develop the Basin Media Hub, a $250million film studio on an 8.9-acre waterfront site. Well probably have a big celebration when we put that shovel in the ground, says Julie Dabrusin, a federal member of Parliament for Toronto-Danforth, which includes the citys waterfront studio district. The strikes and other things have slowed things down, she adds. A spokesperson for Hackman Capital confirmed plans for the Basin Media Hub development are still on track.

Theres investment in new film facilities elsewhere. In Oakville, Ontario, about an hour from Toronto, the decommissioned Centennial Pool on Navy Street has been turned into a dedicated water tank for filming aquatic scenes, including for Prime Videos Reacher series. Were positioning Oakville as a great alternative for productions if they are having issues finding shots that they need with a small-town vibe or simply requiring an aquatic-based scene, says Garrett Rodman, an economic development officer with the city of Oakville.

The third season of Reacher was filmed in Caledon, Ontario, just up the road from Oakville, tapping Ontarios 21.5percent tax credit and currency savings.When Jack Reacher, played by Alan Ritchson, climbs into and out of the rough waters hitting up against the coastal mansion, the series hero was actually in the Centennial Pool surrounded by green screen, stunt doubles and camera operators. Netflixs Slumberland feature and Fubar series and the NBC medical series Brilliant Minds have also made use of the Centennial Pool.

Back in L.A., theres a sentiment that this moment marks a critical juncture for production in the state as it hopes to bounce back fully after COVID, the strikes and wildfires. Victor Coleman, CEO of Hudson Pacific, the giant studio soundstage operator and owner of Sunset Bronson Studios, which Netflix currently leases, called it a pivotal year. The exec pointed to signs that a streaming pullback in spending may be abating. Some of the pressure from austerity measures may be alleviated as growing number of streamers, including Disney, Warner Bros, Discovery and Paramount reach profitability, Coleman added on an earnings call on Feb. 20.

The studio operator CEO also said the company has held discussions with Trumps Hollywood Special Ambassador reps (aka Jon Voight, Mel Gibson and Sylvester Stallone), as one of the groups all pushing for additional state and local program enhancements and commitments from media companies to increase local production.

Amid that wait-and-see approach, Hollywood productions increasing search far and wide for tax incentives and lower labor costs to offset fragile economics making film and TV shows.

Studios have always based production decisions on where to get the best value, whether thats on a lot in Burbank or shooting overseas. Its always been part of the decision-making process and international locations have got more competitive over time, says Tobias Queisser, CEO of Cinelytic, the AI-driven content intelligence platform that advises studios. While demand for production facilities remains solid, content studios now approach budget decisions with more discipline, as profitability is now the key driver for both studios and investors.

This story first appeared in the March 19 issue of The Hollywood Reporter magazine. To receive the magazine,click here to subscribe.