Hollywood, L.A., increasingly not where movies made; Tinseltown is fighting back

Director James Cameron will spend $412 million making his next three "Avatar" films but is taking their production to New Zealand
Director James Cameron will spend $412 millio... 03:02

Eight major films are coming out in time for Christmas, but Hollywood is facing another kind of drama. The newest saga involves director James Cameron. He's shooting his "Avatar" sequels about as far from Southern California as you can get.

Cameron says he will spend $412 million making his next three "Avatar" films in New Zealand.

It's a boon for New Zealand and another blow to Los Angeles. The entertainment capital of the world is increasingly where studios make their decisions, but not their movies.

Tom Sherak, former president of The Academy of Motion Picture Arts and Sciences, said: "The reality is that we're getting killed."

Sherak says he feels like Peter Finch in the movie "Network" who was "as mad as hell" and "not gonna take it anymore!"

"The motion picture industry, the television industry, should be pointing to Los Angeles. Not to Louisiana. We're like 'Rocky.' We're getting beat up in those early rounds. Boy. It's going and we can't stop it, unless we do something," Sherak said.

In 1997, there were 47,669 production days in and around Los Angeles. In 2013, that dropped to just 25,534. Almost every blockbuster movie this year was filmed outside of California. TV shows from "Homeland" to "American Horror Story" are based in North Carolina and New Orleans, according to Film LA and the MPAA.

So Los Angeles' new mayor, Eric Garcetti, is focused on keeping Hollywood in Hollywood, "right here where it started is where it belongs."

The entertainment industry generates 500,000 jobs in Los Angeles.

Asked how the problem is fixed, Garcetti said, "It's going to be a combination, I think, of things like tax credits and smart policies and Jewish guilt. We haven't even fought the fight. It's like we're laying down, as if Detroit said, 'Go ahead car companies, leave forever,' or New York said, during the crisis of, financial crisis, 'We don't need those banks.' L.A. can't let that happen with Hollywood."

Garcetti just signed a bill waiving all fees for TV pilots filmed in the city. He appointed Sherak the new film czar of Los Angeles to cut through City Hall red tape. But what studios really want are lucrative tax credits now offered by more than 40 states and several countries, including New Zealand, which just raised its credit from 15 percent to 25 percent. New York State spends $420 million each year to lure productions. California offers just $100 million.

Sherak and Garcetti are lobbying state lawmakers for more money, hoping to be able to make Hollywood an offer it can't refuse.