When Walt Disney Animation Studios opened its Vancouver production facility in 2021, the first project it took on was the series adaptation of Moana, which later became the more than $2 billion feature-film box office hit Moana 2.
This development served as a “warning sign” for the California animation industry, according to a new report from the Animation Guild, BRIC Foundation and Titmouse Foundation in partnership with CVL Economics. The original Moana was largely produced at Disney’s Burbank studio, and the move up north meant that much of project’s economic impact — Moana 2 could have entailed as many as 817 jobs, $87 million in wages and $178 million in state GDP, the study claims — went to Canada, rather than to California.
And the decision was emblematic of a trend that’s been accelerating over the last decade or so, according to data laid out in the study. Between 2010 and 2023, California’s share of the highest-grossing animated films dropped from 67 to 27 percent. Between 2019 and 2024 animation employment dropped by nearly five percent in California while other jurisdictions saw major upticks (more than 18 percent in New York, nearly 72 percent in British Columbia and nearly 13 percent in Ontario).
“This shift underscores a growing structural disadvantage for California and highlights the urgent need for policy interventions that re-anchor high-value animation jobs in the state,” the report states.
Released Thursday, the study aims to convince policymakers to pass proposed amendments to California’s film and television tax credit program that would render animated films and television shows eligible for the first time.
Beyond animation’s inclusion in the program, animation stakeholders have additionally been advocating for enhancements like a decrease in the $1 million minimum budget for eligible projects in a bid to include children’s programming, which tends to operate with smaller budgets than adult animation. But it remains to be seen how realistic those changes might be as the bills’ passage remains far from certain.
While California currently has no animation incentives, 30 other states do, including New York, Georgia, Texas and Oregon. Canada and Australia, meanwhile, have “emerged as global leaders” on the international stage by offering layered incentives that can amount to as much as 46 percent in Canada’s case, the report states.
Back in California, even some work that has historically taken place in-state is trickling out. A survey of 648 Animation Guild members included in the report found that several state-based projects have begun outsourcing components of their work overseas. The report cited SpongeBob SquarePants, Fairly OddParents and Looney Tunes as titles that are now relying on international workers for at least some of their production pipeline.
It’s become fairly standard for development to take place in-state while other components of the work are increasingly sent elsewhere. “Production phases are already largely outsourced, and pre- and post-production are seeing increasing movement — putting the entire production chain at risk,” the report claims.
This statewide decline is playing out against a larger backdrop of global animation optimism. While the COVID-19 pandemic played a notable role in boosting production — given that animation work can largely be done remotely, as opposed to live-action — the genre has nonetheless continued to thrive since. The report finds that the number of animated projects commissioned globally rose from 558 in 2019 to 828 in 2022 to 860 in 2024, accounting for an increase of 54 percent.
And there’s further cause for confidence on the horizon. The report states that the animation market is estimated to grow 117 percent between 2024 and 2034, from being valued at $413 billion to $898 billion across film, TV, video games, digital platforms and advertising.
The report makes a plea for lawmakers to ensure their state isn’t left behind as the world moves on. “California still retains significant advantages — proximity to major studios, skilled workforce, cultural alignment, and high-quality production,” the report states. “However, these strengths are rapidly eroding as competing regions build their own animation ecosystems.”
The study adds, “Without prompt action to match global incentives, California risks permanent displacement as the heart of animation innovation — forfeiting not just today’s productions but tomorrow’s pioneering advances in a rapidly evolving digital economy.”
