Film & TV Production Outlook 2026: Tax Incentives, Audience Demand and Where Production is Heading

The film and television industry is in a better place now than it has been in a few years, and that distinction is worth noting.

After strikes, spending pullbacks, and a dramatic reset in streaming economics, the industry is starting to find its footing again. This period of recalibration is being shaped by smarter production strategies, strong original storytelling, and competitive global film incentives that offer producers longevity (and peace of mind). 

Spending and production volume are not what they once were, but importantly, they are practical and sustainable, a sign that the industry is entering a healthier place. This outlook is more than wishful thinking, it’s reflected in the data: audiences are returning, projects are being greenlit, and incentive programs across states and countries are strengthening. 

At Entertainment Partners, we are seeing the positive shift firsthand, long before the cameras roll. For producers who understand how to navigate the new landscape of production, the opportunity is immense.

Audiences are returning for original stories

The first place that we can see positive momentum for the film industry is in the box office.

According to Comscore, year-to-date domestic ticket sales are running more than 20% ahead of the same point in 2025, a number that reflects both a stronger slate and real audience demand for theatrical. AMC reported admissions revenue for the weekend of March 20 was more than 70% higher than the same weekend a year earlier, and Gower Street Analytics projects the domestic box office could reach $9.9 billion in 2026, which would make this the strongest year since before the pandemic.

What makes this moment especially encouraging is what is driving that momentum. Audiences are not just showing up for sequels and reboots, we are seeing a real return of interest in original content.

Ryan Coogler’s Sinners grossed $370 million at the global box office with no franchise history behind it, earned an ‘A’ CinemaScore rating, and took home the Golden Globe for cinematic and box office achievement. Ryan Gosling’s Project Hail Mary set an Amazon MGM record opening to $80.6 million domestically and surpassing $500 million globally, and Pixar’s Hoppers is having one of the studio’s stronger original runs in years. 

On television, The Pitt Season 2 launched to 5.4 million viewers in its first week, nearly 200% higher than its Season 1 premiere. Massive breakout Heated Rivalry is another good example of what can happen when the story comes first: strong audience response, production costs that made sense, and a second season already approved.

And now, a brand-new format has emerged: the micro-drama. Also known as ‘vertical dramas’, these short, serialized projects, are usually just a few minutes per episode, built for mobile viewing and designed to move quickly.

Micro-drama apps have appeared alongside Netflix and HBO Max among the most-downloaded streaming apps in the U.S., and are experiencing even higher adoption rates across Asia and Latin America. Major studios like Fox, Disney, and Paramount have all moved into the space, and SAG-AFTRA has introduced a new agreement aimed specifically at vertical projects, which tells you this is not just a fringe format. While the micro-drama is not replacing traditional film and television, it is creating another lane of production, with its own audience, economics, and pace.

Oscar-winner Michael B. Jordan stars in 'Sinners' / Eli Adé/Warner Bros. Pictures

Film incentives are driving a resurgence in independent production

Another encouraging development is the increasing recognition for independent producers, as governments and policymakers in several important markets are making a more deliberate effort to support independent production directly through film tax incentives. 

Ireland, which has long been a smart market for independent film, was the first to offer a dedicated indie tax incentive. Enhancing its core program, Section 481, the Irish government introduced the Scéal Uplift, strengthening the incentive to 40% for qualifying productions under €20 million. Next, the UK introduced the Independent Film Tax Credit (IFTC), enhancing the existing Audio Visual Expenditure Credit (AVEC) to a rate of 39.75% for films with production budgets (excluding marketing and distribution costs) of up to £15 million. 

In the U.S., New York State now offers its own dedicated $100 million Independent Film Tax Credit. Funded annually, the highly attractive 30% to 40% credit is designed to give indie productions faster access to funds, which can be claimed in the year the project is finished, without having to compete in the same queue as major studio projects.

These meaningful policy choices reflect a real understanding that independent producers need dedicated support, not just a place behind the studio tentpoles. Seeing Ireland, the UK, and New York all move in this direction at the same time says something important about where the industry is headed.

Competitive incentives offer producers lucrative, long-term commitments

New York isn’t the only state making major commitments to strengthen film and television production levels in the U.S. From New Jersey to California, incentive programs across the country have grown in size and staying power, giving local economies a boost and American producers the reassurance that reliable incentive programs are available close to home.

Expanded caps, longer time horizons and structural stability are poised to support significant U.S. production spend in 2026 and beyond:

• California’s Film and TV Tax Credit Program 4.0 now stands at $750 million annually, plus another $150 million through the Soundstage Credit Program, extended through 2030. 
• New York raised its cap to $800 million, removed restrictions on above-the-line costs, and made credits available in the year they are earned. The program is slated to run through 2034, with a possible extension to 2036.
• New Jersey’s Film and Digital Media Tax Credit Program totals $800 million annually across its funding pools, with credits reaching 40%, available through 2039. 
• Texas has committed $300 million biannually through its moving image incentive program, providing stackable uplifts and a sunset date of 2035.
• Illinois raised its base incentive to 35% and extended the program through 2038, with no annual cap and additional uplifts available.

Considering the major capped programs in California, New York, New Jersey, and Texas, there is a reasonable floor of roughly $7 billion to $8 billion in annual U.S. production spend. Add uncapped states like Georgia, Illinois, and Massachusetts to the picture, the range could reach closer to $10-$15 billion in annual U.S. production activity, with more to come as newer incentives fully take hold.

For producers who cross borders, the opportunity is just as real:

• Canada’s stackable federal and provincial credit structure, with British Columbia recently increasing its provincial rates, remains one of the most robust incentive programs available anywhere.
• The UK’s Audio-Visual Expenditure Credit (AVEC) offers between 25.5% and 39.75% on qualifying spend, with no annual cap and no limits on above-the-line costs. The addition of the visual effects uplift has made the UK one of the stronger post-production destinations in the world.
• Ireland’s 32% base, rising to 40% for independent productions, and new 20% incentive for unscripted television introduced in 2025, stands as one of the world’s most competitive programs.
• France maintains a stable 30% rebate and now includes non-resident talent as qualified spend.
• Australia’s Location Offset, at 30% with no annual cap and no sunset date, has brought a steady pipeline of major international work to the country.

And recently, at the Series Mania Festival in Lille, the Council of Europe signed a landmark co-production treaty that creates the first-ever legal framework specifically for international television and streaming series. Modeled on existing co-production rules, the new convention streamlines how independent producers from different countries work together, share revenue, and access funding across borders. With roughly a dozen nations signing on at launch and close to 50 expected to ratify, this is a meaningful structural development for any producer considering European co-productions.

Why the incentives conversation matters now, more than ever

Film incentives are no longer a funding bonus; they’re a determining factor in what gets greenlit and where production business goes. 

Film commissioners, and organizations like AFCI, are central to that conversation. They are often the people helping a producer understand whether a jurisdiction really works for them—not just on paper, but in practice. Commissioners assist with navigate incentive rules, permitting, government coordination, local crew depth, stage and location availability, and the broader question of whether a market can actually support a production smoothly. 

This year’s AFCI Studio Summit landed at the exact right time. The multi-day conference held in Los Angeles brought together studio executives, producers, location managers, service providers, and the film commissioners who are often on the front lines of key production decisions, for important conversations about where projects are going and how jurisdictions are competing for them.

While attending the event, I was honored to join a panel that got right to the heart of the matter. "Where Production Is Actually Landing," presented by ProdPro and moderated by the company’s CEO, Alex LoVerde, brought together Jeremy Kipp Walker, EVP of Live-Action Production at LAIKA and formerly Head of Production for Netflix's Independent Film division, along with film commissioners from around the world, for a data-driven and refreshingly honest conversation.

AFCI Studio Summit panel "Where Production Is Actually Landing," presented by ProdPro

Using aggregated production data, the panel looked at where film and television business is landing across formats, budgets, and regions, and why the patterns for independent projects often look quite different from studio projects. We discussed factors driving location decisions, like incentive thresholds, infrastructure, workforce depth, and how long things take to get done. And importantly, the session engaged in direct conversation with film commissioners about best practices to support the global production community they serve.

For producers, the message from the Studio Summit was simple: early incentive planning is a competitive advantage. In a market with so much competition, and so much money in play, the difference between a project that works and one that struggles often comes down to how well the financial structure is thought through, from the beginning.

For markets competing for production, it’s all about execution. Strong programs attract business when they are backed by consistent, reliable processes. Producers remember which markets delivered on their promises, and which ones made the process harder than it needed to be.

How EP can help your production plan for success

Production is moving faster, budgets are being scrutinized more carefully, and incentive planning is happening earlier than ever before. At Entertainment Partners, we work alongside production decision makers every day, across our global client base. Our experts stay ahead of the changes so clients can focus on what they do best—creating the film and television that entertains the world. 

Visit our production incentives page to explore worldwide incentive offerings to maximize your budget, or reach out to our expert team for personalized guidance. EP has the tools and the expertise to deliver for you, no matter where your production is headed.

The industry is not snapping back to what it once was, but it is stabilizing. Together we can keep the momentum moving in the right direction.

This article contains general information we are providing on a subject that may be of interest to you. Nothing in this article should be considered tax, accounting, or legal advice. You should consult with your own tax, accounting, or legal advisors regarding the applicability of this information to your specific circumstances.