Film Production Shifts: L.A. and N.Y. Gain as Other Hubs Decline

Production hubs that were once considered emerging film and TV centers are now facing downturns, leading to a consolidation of activity in traditional centers like Los Angeles and New York. Victor Coleman, CEO of Hudson Pacific, noted this shift, observing that markets previously seen as growing have experienced declines. This observation was made in early March.

In response to these industry changes, Hudson Pacific is winding down its Quixote studio services operations in Georgia and New Mexico. The company is also reducing its footprint in Los Angeles, laying off approximately 70 staffers across both locations. Quixote's vehicle fleet and production supply rentals are expected to remain operational, with a phased approach to minimize disruption for clients of its soundstage and Atlanta operations.

Hudson Pacific acquired Quixote in 2022 for $360 million during a period of high content spending. However, major studios have since cut back on content creation, leading to a decrease in original series premieres for three consecutive years, with a projected 11 percent drop in 2025 compared to 2024. The company anticipates annualized cost savings between $21 million and $27 million from these operational changes.

This strategic adjustment also reflects occupancy rates, with Hudson Pacific's Hollywood stages at 96 percent leased, while Quixote stages were at 53.3 percent occupancy. The move aims to allow Hudson Pacific to concentrate financial and operational resources on its office portfolio and more successful segments of its studio business, including its Sunset Studios properties where Netflix is a key tenant.