California, Once a Mecca for Animation Work, Is Rapidly Losing Ground, Report Claims

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Upon launching its Vancouver studio in 2021, Walt Disney Animation Studios initially worked on the television series adaption of Moana. This project eventually evolved into the massive box office success, Moana 2, earning over $2 billion at the global box office.

The new report by the Animation Guild, BRIC Foundation, Titmouse Foundation, and CVL Economics states that this shift was a “red flag” for the animation industry in California. Originally, most of the production for the movie “Moana” took place at Disney’s Burbank studio. However, relocating the project to a northern location meant that potential job opportunities, wages, and state GDP contributions associated with “Moana 2” (up to 817 jobs, $87 million in salaries, and $178 million in California’s GDP) would likely benefit Canada instead of California.

The decision exemplified a pattern that’s been gaining momentum for the past ten years or so, as suggested by the study’s data. From 2010 to 2023, California’s percentage of top-earning animated films decreased from 67% to 27%. Over the same period, employment in animation in California fell by almost 5%, while other regions experienced significant growth: over 18% in New York, approximately 72% in British Columbia, and nearly 13% in Ontario.

This change emphasizes an increasing structural challenge for California, revealing the immediate necessity of policies that help retain premium animation positions within the state,” the report indicates. The Hollywood Reporter is requesting a response from Disney on this matter.

As a passionate advocate, I’m thrilled to share that a new study, unveiled just yesterday, is aimed at persuading decision-makers to enact changes in California’s film and TV tax credit program. This exciting development could, for the first time, extend eligibility to animated films and shows like the ones we all love!

Going beyond just having animation in the lineup, those involved in animation (stakeholders) are pushing for improvements such as lowering the minimum budget of $1 million for eligible projects. This is aimed at accommodating children’s programming which typically operates on smaller budgets compared to adult animation. However, it’s uncertain whether these changes will become a reality, as the passage of the related bills is still questionable.

At present, California lacks animation incentives, but 30 other U.S. states, such as New York, Georgia, Texas, and Oregon, do offer them. On the global level, Canada and Australia are standing out as leading nations due to their comprehensive incentive packages that can total up to 46% in Canada’s case, as mentioned in the report.

California doesn’t have any animation incentives right now, whereas 30 other states do, including New York, Georgia, Texas, and Oregon. On a global scale, both Canada and Australia are making significant strides by providing multi-layered incentives that can reach as high as 46% in Canada, according to the report.

In California, there’s been a trend of certain jobs previously done in-state gradually being sent overseas. A survey of 648 members from the Animation Guild, as mentioned in the report, revealed that several local projects are now outsourcing parts of their work to foreign countries. Titles like SpongeBob SquarePants, Fairly OddParents, and Looney Tunes were named as examples that now utilize international workers for at least some stages of their production process. (THR has contacted Nickelodeon and Warner Bros. Discovery for a response.)

It’s common nowadays for development to happen within a state, whereas various aspects of the project are progressively shifted elsewhere. The report suggests that the manufacturing stages are already being outsourced significantly, while both pre- and post-production processes are showing signs of moving out — potentially jeopardizing the entire production line.

The slide in this region’s status is unfolding amidst a broader context of worldwide enthusiasm for animation production. Although the COVID-19 pandemic significantly contributed to the surge in production due to the remote nature of animation work, the genre has persisted and even flourished beyond that period. The report reveals that the number of animated projects commissioned globally increased from 558 in 2019 to 828 in 2022, further rising to 860 in 2024, marking a growth of approximately 54 percent over this timeframe.

Looking ahead, I’ve got a reason to be optimistic about the future as an animator. It appears that the animation market is projected to surge by a whopping 117% from 2024 to 2034, soaring from $413 billion to a staggering $898 billion! This growth will be seen across various platforms like films, TV, video games, digital media, and advertising.

The report urges legislators to prevent California from being left out in the advancement of global progress, pointing out its existing advantages such as proximity to major film studios, a skilled workforce, cultural compatibility, and high-production quality. Nevertheless, these benefits are rapidly diminishing as rival regions establish their own animation industries.

The research warns, “If immediate steps aren’t taken to align with global incentives, California may face permanent loss of its position as the hub of animation innovation. This could mean not only losing current productions, but also missing out on future groundbreaking innovations in a fast-paced digital economy.

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2025-05-03 00:26