California Animation Work Faces a 40% Decline in High-Grossing Films

A study by the Animation Guild and its partner organizations has revealed that California’s dominance in animated film production is rapidly waning.

Over the past 13 years, the state’s share of the highest-grossing animated films has plunged by 40 percent, from 67 percent in 2010 to just 27 percent in 2023. This dramatic slide is reshaping the landscape for creatives, investors, and policymakers alike.

California Animation Work: Shifting Production Trends

Historically, California was known as the creative heart of animated films, with landmarks like the original “Moana” being produced in Burbank.

However, the sequel “Moana 2” shifted many production elements to Vancouver. Industry insiders estimate that this move transferred work that could have supported up to 817 in-state jobs, cost the state approximately $87 million in wages, and reduced California’s contribution by $178 million in state GDP.

As one industry veteran explained, “The relocation of key production stages is a wake-up call for California. Without significant policy adjustments, we risk losing the very essence of our animation work.” These shifts are clear indicators of a broader movement where studios are prioritizing cost efficiencies and global tax incentives over local production.

California Animation Work: Employment and Economic Impact

The study also reveals that between 2019 and 2024, animation employment in California decreased by nearly 5 percent. In stark contrast, animation hubs in other regions experienced notable gains – with New York reporting an increase of more than 18 percent, British Columbia nearly 72 percent, and Ontario up by almost 13 percent, according to The Hollywood Reporter.

These figures underscore a realignment in the industry that could have long-term economic repercussions for the state. Transitioning from a robust creative economy to one that faces outsourcing challenges may not only diminish California’s cultural influence but also weaken its economic fabric.

California Animation Work: Policy and Global Competitiveness

Policymakers now find themselves at a crossroads. The study’s authors call for urgent reforms in California’s film and television tax credit program, which currently excludes animated projects. Experts argue that if California does not expand the definition of eligible productions, it will continue to lag behind 30 other states and leading nations like Canada and Australia, where layered incentives can reach as high as 46 percent.

Additionally, global trends show a vigorous surge in animated content, with the number of commissioned projects increasing from 558 in 2019 to 860 projected for 2024—a 54 percent growth. Moreover, the broader animation market is estimated to skyrocket by 117 percent between 2024 and 2034, growing from $413 billion to an anticipated $898 billion.

As one union representative stressed, “Without prompt and decisive policy action, California risks permanently ceding its role in animation innovation to more nimble regions.”