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While its rivals chase tax credits, Netflix will produce more content in expensive California

The OA
Netflix/JoJo Whilden
"The OA" is leaving New York for its second season.
  • Ashley Rodriguez
By Ashley Rodriguez

Reporter

This article is more than 2 years old.

It used to be that most Hollywood films were made in, well, Hollywood. But tax incentives have lured TV and film productions out of California to places like the UK, Canada, and the US states of Georgia, Louisiana, and New York.

With its $6 billion production budget, Netflix isn’t willing to cut those corners. It wants to spend more time in its home state.

The streaming-video giant, which is bulking up production on original movies and series, told The Wrap it will bring as much of that production as possible to California.

“I hope you save enough money to put a $100 million production at risk by having a lot of miserable people around”

Among the top major and independent US movie studios, Louisiana was the primary or secondary production location for the most feature films in 2013, according to non-profit FilmLA (pdf), which tracks production in the industry. The US state of Georgia currently offers a tax credit of up to 30% on qualifying projects. California has since regained its crown, but shares the throne across the world. 

A lot of the big-budget movies you see, such as the Star Wars films, Marvel movies, and reboots like Beauty and the Beast, are filmed primarily outside the US—both for creative and tax reasons. The UK offers a cash rebate of up to 25% of the UK expenditure for qualifying films. Canada offers tax incentives on 20% to 30% of qualifying local expenses, depending on the region.

But Netflix’s chief content officer Ted Sarandos said tax incentives like those can also threaten creativity. “I’m happy to participate in the incentives if they work, but there is a cost on the creative of the show,” he told the Wrap.

“When you think about productions chasing tax credits all over the world, it puts the onus on the cast and crew who have to travel,” he added. “I hope you save enough money to put a $100 million production at risk by having a lot of miserable people around.”

Unusually, he pointed to a rival show, HBO’s Veep, as an example. He said the show “got way better” when it moved production from Baltimore to Los Angeles after its fourth season. “They have the best writers on television now,” he said. “The show is funnier, everyone’s happier. I think it shows up on screen. Shooting in LA is an investment in the quality of the show.”

Sarandos, speaking from Netflix’s new Hollywood offices, said Netflix instead plans to invest more in California. New York is home to other Netflix shows like the Marvel series, which are co-produced with ABC, and Aziz Ansari’s Master of None.

And House of Cards is primarily shot in Baltimore, which mirrors the aesthetic of Washington, DC where the show takes place. Sarandos said those Netflix productions, and other like the Florida Keys-set Bloodline where “the location is the character,” will continue to be shot on location.

Sarandos also has another reason to get excited about California—in 2015, the state changed its rigorous tax-credit program, which tripled the amount of tax incentives available for TV and film projects and prioritized those that brought more jobs to the region. A number of productions, particularly TV shows, subsequently moved back to California, including:

  • American Crime, from Texas
  • American Horror Story, from Louisiana
  • Ballers, from Miami, Florida
  • Legion, from Vancouver
  • Lucifer, from Vancouver
  • Scream Queens, from Louisiana
  • Secrets and Lies, from North Carolina
  • The Affair, from New York
  • And Netflix’s The OA, from New York

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