Industry Insider: California — No Longer The Home Of Hollywood?
Jake Blucker
California. Well known for its diverse landscapes, famous landmarks, and, of course, Hollywood. In the early twentieth century, filmmakers across the nation moved their projects to Los Angeles, where they could take advantage of the year-long sunshine, and exterior locations for sets, and escape the various fees imposed on them elsewhere. The industry boomed, marking the Golden Age of Hollywood and filmmakers in California. As many know it now, Los Angeles is the epicenter of entertainment. It’s an industry that has lasted for almost one hundred years, making actors’, filmmakers’, and writers’ dreams come true. California is a place that can foster creativity and allow filmmakers’ visions to come to life. Anyone can make it… Right?
In the year 2023, that might not be the case.
According to Westwood Economics & Planning Associates, “the number of workers employed by the industry fell by 70,000 in 2023, an 8% reduction.” After the advent of the pandemic and the union strikes, the entertainment industry, specifically in Los Angeles, has been damaged: various production cuts, employee layoffs, lack of investment and funding, and tightening of restrictions have caused many to question California's ability to foster the creative economy of the entertainment industry, leading to the question: Is Hollywood in danger?
In this article, A Hot Set will analyze the Otis College Report, California’s Creative Economy – Key Highlights from 2023, which highlights how California is dealing with the current economic struggle in Hollywood. Furthermore, the article will answer the question of whether Hollywood is at risk of being dethroned as the epicenter of the creative economy.
First, to understand how California is at risk of losing this title, it is important to define California’s creative economy: “The creative economy comprises a set of industries for which the primary output (or product) has symbolic value. These industries comprise a group of activities through which ideas are transformed into cultural and creative goods and services.” The industries that fall under this definition are listed as Advertising, Fashion, Book Publishing, Newspapers, Magazines, Movies, Television, Gaming, Radio, Visual Arts, and more. The Otis College Report, however, focuses specifically on the Entertainment sector, which comprises Film, Television, and Sound as well as Managers, Independent Artists, and Performing Arts. Additionally, they highlight the Media and Digital Media sector, which comprises New Media (internet and streaming), Traditional Media, and Advertising.
The creative economy holds an important role in the well-being of California and its finances. Creative industries are the “engines of modern economic activity and growth,” and thus, it is not surprising that the epicenter of this form of economic activity is home to one in every five creative economy jobs in the United States; With 849,000 employees that were directly employed into the creative economy in 2023, there were an additional 639,000 individuals employed in various industries that support the creative economy. Overall, more than 56% of the state’s creative economy is found in these industries, in this case, specifically New Media (29%), Film, Television, and Sound (14%), and Traditional Media (13%). So, what is the problem?
While the numbers are comparatively satisfactory, California’s creative economy has shrunk in 2023. It is known that the strikes in the Film and Television industry created setbacks for Hollywood; however, the impacts of these strikes damaged the creative industries, creating a lasting effect that wasn’t entirely intended: the creative economy shrank by 8% and 70,840 jobs were lost. The struggle to maintain a job in the creative economy was further setback by the already struggling economy in 2023, where California’s labor market was, at best, mundane.
The jobs lost during this period hit every sector within the creative economy – except one. Fine and Performing Arts was the only sector that saw growth when around 4,000 employees were added to the state’s museums, art schools, dance studios, and theater companies. While this section grew by 9% from 2022 to 2023, the rest did not fare well. Film, Television, and Sound faced production cuts, and then, the strikes and their impacts, which deepened the losses and led to employment layoffs. Traditional Media was continuing its decade-long decline in budget and staff – Buzzfeed, Los Angeles Times, and Sports Illustrated were some of the companies that participated in high-profile layoffs. Companies tasked with the Fashion and Creative Goods sector faced similar challenges as well as supply chain management, labor shortages, and higher interest rates, all leading to a decrease in employment.
With these statistics, it can be assumed that the areas with the largest entertainment industries saw the steepest losses. According to the article, around 75% of all creative economy job losses in California were in Los Angeles or San Francisco – with L.A. taking 68% of the total losses. While the creative economy is not exclusive to a specific place, it is clear that because of Los Angeles’s presence in entertainment, it has become region-specialized, and thus dependent on how well the region’s (California) economy is.
Ultimately, it is clear that the creative economy struggled in California during 2023. All but one creative industry during 2023 experienced budget cuts and losses in employment. From the pandemic and Hollywood strikes to the general lackluster California economy, there were certainly many hardships facing these industries. And the question remains: Is Hollywood in danger? Put simply, no.
While there were challenges, California remains an “indispensable employer… a source of well-paying jobs, and… continue[s] to be a hub for innovation and growth in the state’s economy.” Since the early twentieth century, California has been home to Hollywood and the entertainment world and it will take many years for it to succumb to these problems, if any at all. The problems listed above seem to be circumstantial and don’t reflect a systemic issue but rather one that it's facing with the rest of the entertainment industry around the world. California will continue to be the epicenter of entertainment.
