Runaway Production

The Core Concept

Runaway production refers to the migration of film and television projects from their country of origin to other locations around the world in search of significant cost savings. Historically, the term was coined in Hollywood to describe U.S. productions that chose to film in countries like Canada, the United Kingdom, Mexico, or in Eastern Europe rather than in the United States. This migration is driven by a combination of powerful financial factors, primarily government subsidies and lower labor costs.

The Driving Forces

Two main factors cause runaway production:

1. Government Incentives: The primary driver is the global proliferation of location incentives. Countries and provinces offer lucrative tax credits, cash rebates, and other subsidies that can reduce a film’s budget by 20-40% or more. This creates an ‘incentive arms race’ where jurisdictions compete to offer the most attractive financial package.
2. Lower Costs: Other factors include lower wages for local crews and a favorable currency exchange rate, which can make a U.S. dollar budget stretch much further in another country.

The Effects on the Industry

Runaway production has a profound impact on the industry’s traditional hubs. For places like Southern California, it leads to significant job losses for local film crews (grips, electricians, camera operators, etc.) and the vast network of support businesses that depend on local filming, such as equipment rental houses, catering companies, and post-production facilities.

In response to international runaway production, governments have created their own incentive programs to compete. A major development in the U.S. has been the rise of domestic runaway production, where projects leave California not for another country, but for other states like Georgia, Louisiana, or New York, which have implemented their own aggressive tax incentive programs to lure productions away from Hollywood.