On-location film and television production across the United States experienced a notable slowdown during the first quarter of 2026, according to a recent industry report. New Jersey emerged as a distinct exception, recording a 45 percent year-over-year increase in filming counts and a 37 percent rise in production expenditure, figures released Tuesday by ProdPro, a production intelligence platform, revealed. This surge reflects a fierce competition among states for high-value creative industries, often driven by substantial financial incentives.
The overall dip in U.S. filming counts—a 10 percent decrease for the quarter—underscores a broader recalibration within the entertainment sector. Feature film activity saw the sharpest decline, down 21 percent, while television episodic production managed a modest 4 percent increase. This mixed landscape highlights a shift in industry focus and budgeting decisions, where large-scale cinematic projects face tighter scrutiny than ongoing series.
The numbers on the shipping manifest tell the real story of where equipment and crews are heading, and for many, that destination is now the Garden State. New Jersey’s gains are not accidental. They represent the direct outcome of strategic policy choices, particularly a robust tax incentive program designed to attract film and television projects.
This economic stimulus, combined with a growing infrastructure of modern studio facilities and a readily available talent pool, has reshaped the local production landscape. The state has actively marketed itself as a viable alternative to traditional hubs, offering a compelling blend of financial benefits and logistical advantages. This strategy has clearly paid off.
Major players in the entertainment industry have taken notice. Netflix is investing $1 billion to establish its East Coast base at the former Fort Monmouth site, planning 12 soundstages. Paramount, a name synonymous with Hollywood's golden age, secured an extensive 10-year lease for 85,000 square feet within the forthcoming 1888 Studios in Bayonne.
Lionsgate, another significant studio, is set to become the anchor tenant for Great Point Studios in Newark. These investments represent a long-term commitment, signaling confidence in New Jersey’s ability to sustain this growth. They create a critical mass of infrastructure.
The state has already hosted a variety of high-profile projects. Steven Spielberg’s science fiction feature, *Disclosure Day*, positioned as a major summer release from Universal, filmed scenes in New Jersey. Amazon MGM’s biopic *I Play Rocky*, which chronicles a young Sylvester Stallone, also chose the state for its production.
Toby Emmerich, the film’s producer, spoke candidly about the motivations behind such decisions. “In a normal world we would have shot that movie in New York and Pennsylvania,” Emmerich told The Hollywood Reporter recently. “We ended up shooting it in New Jersey because they had the best tax deal.” This quote reveals the powerful influence of financial incentives on location scouting. Money talks. This aggressive pursuit of production dollars by New Jersey stands in stark contrast to the performance of other traditionally dominant markets.
California, despite remaining the overall leader in production spend at $1.48 billion, saw only a 2 percent year-over-year increase in expenditure, while its filming count declined by 14 percent. The Golden State has responded by doubling its annual tax incentive to $750 million. This move, signed into law last year by Governor Gavin Newsom, aims to stem the outflow of projects and re-anchor productions within California, even encouraging stories specifically set there.
It's a significant investment. New York, long California’s primary rival in film production, also experienced a 14 percent drop in shoot counts, with production spend holding largely flat compared to the previous year. The competition for these projects is a zero-sum game.
When one state gains, another often loses. This dynamic reshapes the supply chain of creative labor and technical services across the country. Further west, Illinois presented a more stable picture, according to ProdPro figures.
The state began the year with a flat filming count but registered a slight uptick in production spend. Illinois has cultivated a robust television production ecosystem, hosting three NBC Chicago procedurals and FX’s critically acclaimed series *The Bear*. The office of Governor JB Pritzker announced in March that the state’s full-year film production expenditure reached $703 million in 2025, marking an all-time high and a substantial increase from the $560 million recorded in pre-pandemic 2019.
This sustained growth demonstrates the effectiveness of consistent state support. Conversely, markets that had recently been perceived as emerging production hubs, such as New Mexico and Georgia, experienced notable declines in both filming count and production spend during the first quarter of 2026. These shifts underscore a broader industry trend where features are consolidating back into established or newly incentivized centers.
Victor Coleman, CEO of Hudson Pacific, which owns Netflix-occupied Sunset Studios, offered a clear assessment of the situation. “L.A. and New York have seen a rise in production with the downfall of other markets like Albuquerque, New Mexico, New Orleans, Louisiana, Atlanta, Georgia and a little bit of Chicago and Illinois,” Coleman stated at a Citi conference in Miami on March 2. He added, “Those markets are much more depressed. The tax credits in both Los Angeles and New York have enhanced what we see is the production flow.” His words are direct.
This movement of production activity, often dictated by tax policy, has profound implications for regional economies. Follow the supply chain of a major film or television series, and you find a complex network of local businesses that benefit. Catering companies, hotels, lumberyards, transportation services, security firms, and local retail outlets all see increased revenue when a production sets up shop.
These are not just abstract numbers. They are jobs for electricians, carpenters, drivers, and chefs. They are tax revenues for local municipalities.
Trade policy, in this context, becomes foreign policy by other means, as states compete vigorously for a share of this lucrative industry. For a state like New Jersey, the influx of production dollars translates into significant economic multipliers. Beyond the direct employment of actors and crew, the construction of new studios generates substantial construction jobs and demand for materials.
Once operational, these studios require ongoing maintenance and staffing, creating permanent roles. The long-term leases signed by major studios like Paramount signal a commitment that goes beyond a single project, fostering a sustainable creative ecosystem. This stability attracts more talent and support services, further solidifying the state’s position.
It builds a lasting industry. The broader significance extends to consumer impact as well. While not immediately apparent, the consolidation of production in certain areas can influence the types of stories told, the diversity of locations depicted, and even the overall cost structures that eventually filter down to streaming subscriptions and ticket prices.
A more efficient, incentivized production environment can theoretically lead to more content being produced, or content being produced more cost-effectively. However, it also creates a dependence on state subsidies, a factor that could lead to volatility if policy shifts. This is a delicate balance.
Key Takeaways: – New Jersey saw a 45% increase in filming count and 37% rise in production spend in Q1 2026, driven by tax incentives and new studio development. on-location filming declined by 10%, with feature film activity down 21%, while TV episodic production grew 4%. – Major markets like California and New York experienced declines in filming counts, leading California to double its tax incentive to $750 million annually. – Emerging production hubs such as New Mexico and Georgia saw notable declines, as production appears to consolidate back into states with strong incentives. Looking ahead, the completion of major studio complexes in New Jersey, including Netflix’s $1 billion facility and 1888 Studios, will significantly expand the state’s capacity. These developments will test the endurance of New Jersey’s production boom and its ability to sustain growth beyond initial incentives.
States like California and New York will continue to refine their own incentive programs, ensuring the competition for film and television projects remains intense. Readers should watch for further announcements regarding upcoming productions in these new facilities, and how the economic impact translates into local job growth and ancillary business development. The battle for Hollywood East is far from over.
Key Takeaways
— - New Jersey saw a 45% increase in filming count and 37% rise in production spend in Q1 2026, driven by tax incentives and new studio development.
— - Overall U.S. on-location filming declined by 10%, with feature film activity down 21%, while TV episodic production grew 4%.
— - Major markets like California and New York experienced declines in filming counts, leading California to double its tax incentive to $750 million annually.
— - Emerging production hubs such as New Mexico and Georgia saw notable declines, as production appears to consolidate back into states with strong incentives.
Source: The Hollywood Reporter