Netflix is betting that filming closer to home will produce better content. In 2015, the streaming giant has announced that it would be doubling its output of original content, and it is aiming to have original productions make up half of its of its streaming catalog in the coming years. The goal is to entice users to come to the service by providing content that can’t be found elsewhere, but that goal is proving to be a strain on the existing film studio infrastructure. To cope, Netflix chief content officer Ted Sarandos announced that the company would be investing $6 billion to expand infrastructure in California, rather than chase tax incentives offered by states.
Sarandos explained to The Wrap that the company determined that going after the incentives leads to diminishing returns when it comes to their final products. Filming out of state is hard on the actors and crew of a project, and the move will help bring projects back home to California. That could prove to be costly for the company, even as California has increased its own tax incentive program in recent years. While remaining in the state will likely cost Netflix more, Sarandos seems to think that the extra cost will be worth spending.
The problem there is the doubling of projects in the coming years, which The Wrap reports is “maxing out” sound stages on which to work. Netflix will invest the money locally, and Sarandos noted that the company will help improve and upgrade existing studios and sound stages. While they are hoping to lure productions back to California, he says that they will continue to look out of state, “when the location is the character,” as is the case with shows such as House of Cards or Bloodline.
A number of states across the country offer tax breaks as a way to incentivize studios to film their projects locally, which is seen as a way to boost local economies, either through creating jobs, providing business for hotels, or from the sales of raw materials for sets. Studios might save money by going to Georgia or New Orleans, Sarandos explained, but at the cost of making their actors and crew miserable by being away from home for months out of the year.