Hollywoods

It was a television show tailor-made for Los Angeles: a highly anticipated Netflix crime drama about a team of ex-special forces operators who outsource their skills to criminals in the city.

The production was backed by a prominent indie studio and had a critically acclaimed lead actor attached. And with a budget of more than $100 million and a crew of 350, the series seemed like a shoo-in for California’s film tax and TV credit.

But last month, shortly before filming was set to begin, producers were stunned to learn the film didn’t make the cut based on a formula the state uses to rank projects by the number of jobs they produce and their spending levels. After two applications for a tax credit had been rejected, they opted to shoot the series in New Jersey, where it was much easier to qualify for film incentives.

“We were shocked,” said a producer on the project who declined to be identified because of the sensitivity of the matter. “This is the birthplace of entertainment. It shouldn’t be so hard to shoot here.”

Despite improvements to the state’s tax incentive program, Los Angeles and California continue to struggle to keep movies, television series and even game shows from fleeing elsewhere. Production levels have failed to bounce back since the pandemic and the labor strikes by writers and actors, and they remain at historic lows.

Film activity in the L.A. region plummeted in the second quarter of this year, with shoot days for feature films and TV productions falling 20% and 30%, respectively, compared with already anemic levels from a year ago, according to FilmLA.

The fallout has been devastating for local film crews and businesses. L.A.’s signature industry has shed some 57,000 jobs in the past four years, while more than 80 film and television production services businesses have closed since 2022. The production crisis has even become a political flashpoint alongside affordability, crime and homelessness in the race for mayor and governor.

The story of how L.A. steadily lost much of its homegrown industry to other locales is a tale of hubris, escalating costs, political inaction and fierce competition from states and countries hungry for a piece of the Hollywood pie. California eventually adopted a very limited film tax credit plan in 2009, but even then production had already gone elsewhere.

Filmmaker Jonathan Nolan, on the set of “Fallout,” has been at the forefront of efforts to keep Hollywood at the center of the entertainment industry.

(Lorenzo Sisti / Prime Video)

This account is based on interviews with more than a dozen producers, studio executives, lawmakers and film industry veterans.

Despite warning signs that runaway production was causing an exodus of talent and jobs, many took for granted that L.A. would remain the epicenter of film and television.

Film activity in Los Angeles has plummeted to historic lows, with devastating consequences for crews and vendors. This series examines how L.A. lost its dominant perch as a film and TV destination and what can be done to bring Hollywood back home.

“I’ve been around long enough … to realize that things kind of die slowly and then they die quickly,” said Jonathan Nolan, a writer, director and producer, whose credits include the HBO series “Westworld” and “Fallout” on Amazon.

Nolan, who championed efforts to get the state to expand its tax incentives, lamented that L.A. once “stood in for everywhere. Now L.A. doesn’t even stand in for itself.”

‘The X-Files’ and the birth of Hollywood North

Like the fall of Rome and the decline of Detroit, Hollywood’s spiral did not happen in a single day, but rather unfolded over decades.

Before World War II, Los Angeles’ production hegemony was uncontested. An abundance of sunny weather and a range of landscapes, along with highly skilled artisans, from set designers to scenic painters, re-created the entire world on Hollywood soundstages and backlots.

That began to change during the late 1940s and early 1950s when studios broke with tradition and filmed abroad, attracted by Europe’s cheap labor and the desire among directors for more realism in movies.

William Wyler’s 1953 classic “Roman Holiday,” starring Audrey Hepburn and Gregory Peck, was one of the first, shot entirely overseas on the streets of the Italian capital and at Cinecittà studios.

Still, as productions went on location, often for creative reasons, Hollywood remained the center of entertainment gravity.

“Roman Holiday,” starring Audrey Hepburn and Gregory Peck, was one of the first big American studio films to be shot entirely overseas.

(Paramount Pictures)

In 1993, when there were four broadcast networks, cable TV relied on set-top boxes and streamers were, well, party decorations, a relatively unknown television writer named Chris Carter began pre-production on a new supernatural drama series that he had created.

For the pilot’s opening scenes, he needed a forest, one that was dark and moody. There, a terrified teenage girl would be filmed fleeing before she was consumed by a blinding flash of light and then found dead, bearing unexplained marks on her body.

“It became clear that not only were there not great forests in the ‘zone,’” said Carter, referring to the 30-mile-zone (TMZ) around L.A. that producers try to shoot within to avoid mandatory union surcharges. “But there were better forests in Vancouver.”

As it happened, during the 14-day shoot, Carter, who was working with a tight budget, discovered that Vancouver supplied numerous benefits.

The grim weather naturally provided a spooky atmospheric backdrop while the city “beautifully doubled for almost any place in the U.S. without having to pretend too much,” he said.

Carter’s pilot became “The X-Files,” the wildly popular and groundbreaking 1990s TV series that ran for nine seasons (plus two revival seasons), redefined the science fiction genre and spawned two feature films.

The success of “The X-Files” propelled Vancouver’s reputation as “Hollywood North.”

(Associated Press)

“As David Duchovny said, ‘two weeks became five years,’” quipped Carter.

While other productions such as “Wiseguy” had filmed in British Columbia years earlier, “The X-Files” unintentionally cemented Vancouver’s reputation as “Hollywood North,” fueled by Canada’s favorable exchange rates, skilled crews, lower labor costs and, eventually, tax credits.

The show’s colossal success helped create the model still in play 33 years later for outsourcing movie and television production to regions where tax incentives are higher and production costs are lower.

“It was simply a choice I made for the location, not for the financial benefit,” said Carter. “It wasn’t part of my calculus, but it ended up being a fact of life.”

Throughout the 1990s a steady stream of TV shows and movies shot in Canada. The 1994 adaptation of “Little Women” starring Winona Ryder was largely filmed in Vancouver, with a stand-in for Orchard House, Louisa May Alcott’s home in Concord, Mass., built in a local forest.

But, at the time, few saw what was happening as an existential crisis in the making.

For one thing, L.A. was in the midst of a production boom, prompting the development of the $77-million Manhattan Beach Studios, a 22-acre production facility in 1996. (The studio is now fielding offers by its bank lenders after its owner, the real estate investment firm Hackman Capital Partners, defaulted on over $2 billion in mortgages on several studio facilities it had acquired in recent years.)

Losing the ‘golden goose’

Canada’s booming film business inspired other U.S. states to get in on the action. Louisiana became the first to pass a film tax incentive, enhancing it in 2002; New Mexico and Georgia followed with their own programs.

Helping to fuel the film tax credit frenzy was none other than the Motion Picture Assn. The Washington, D.C.-based advocacy group for the major film studios and streamers for years aggressively lobbied lawmakers and even governors in other states to adopt their own film programs.

Eventually, nearly 40 states and some 80 countries and territories were offering film incentives in the form of transferable tax credits, grants or rebates.

“Everybody thought, ‘We are Hollywood. Why do we have to do anything?,’” said Lori Balton, a top location manager, whose list of credits spans nearly 40 years and includes such films as “Heat” and “Once Upon a Time in … Hollywood.”

“They always thought that they had the golden goose. And it was going to keep laying eggs and instead, it packed up its bags and moved.”

Earlier this year, while speaking at Burbank City Hall chambers, Sen. Adam Schiff (D-Calif.) dropped some sobering data: 45% of all U.S. films and scripted television shows were shot abroad in 2025, up from 33% in 2022.

Like most filmmakers, Miles Millar would prefer to work in Los Angeles, where he lives, but he hasn’t done so for 25 years, since he was a co-producer and writer on the CBS action series “Martial Law.”

“It is not financially viable to shoot the kinds of shows we do here,” said Millar, whose work includes “Smallville” and “Beetlejuice Beetlejuice.”

It was too expensive to film in Los Angeles, so the Netflix hit “Wednesday” shot its first season in Romania before relocating the show to Ireland.

(Netflix)

When Millar and his “Wednesday” co-creator and co-showrunner Alfred Gough began pre-production on the first season of the Netflix hit series about five years ago, L.A. as a location wasn’t even discussed.

They settled on Romania. Tim Burton, “Wednesday’s” executive producer and primary director, “loved the idea,” said Millar, noting that the director was predisposed to its gloomy and gothic wonders, having once visited Dracula’s castle in a Transylvanian mountain village with rocker Alice Cooper.

“We built the whole town of Jericho and six standing sets at a huge scale. There was no way you could even begin to construct the level and scale of sets that we did, in L.A.,” he said. “We’re talking about the difference of tens of millions of dollars.”

Still, the former Eastern Bloc country had its challenges. The crew didn’t speak English and its promised tax rebates never materialized.

When “Wednesday” was picked up for a second season (it is now filming its third), the show moved to Ireland, where it received more than $23 million in tax credits last year, according to the country’s Tax and Customs office.

“The last thing I want to do is shoot thousands of miles away from my family for nine months, year after year,” Millar said. But it has come down to “where do we get the most bang for the buck?”

Outsourcing scores and VFX

Other critical components of filmmaking, including visual effects and musical scoring, have also been outsourced over several years.

L.A. was once home to 18 film scoring stages that could accommodate full symphony orchestras. Today only three remain, driven away partly by high labor costs and cheaper overseas competition.

Similarly, many visual effects studios have moved elsewhere. Vancouver alone has dozens of visual effects studios, including Sony Pictures Imageworks and a major branch of Industrial Light & Magic.

“We’ve allowed that piece of the market to leave,” said Marielle Abaunza, president of the California Post Alliance, an advocacy group backing a state bill offering post-production firms their own tax breaks, similar to what New York offers.

“For 16 years, places like New York have slowly been building up their talent, their facilities, their relationships with filmmakers and their relationships with studios,” Abaunza said.

Even as other states and foreign governments invested in their own film industries and began luring away productions from California, lawmakers in Sacramento were initially skeptical of giving tax breaks to producers. Some critics saw them as little more than a handout that diverted resources from more pressing needs such as healthcare and education.

“If you’re on the outside looking in, there is this false sense that everyone who works in Hollywood has to be rich whether you’re crew or not,” said Amy Baer, a producer and former Sony executive who now runs Artists Equity, Ben Affleck and Matt Damon’s production company.

As production losses mounted in L.A., a coalition of labor and industry groups lobbied then governor and actor Arnold Schwarzenegger to take action.

Schwarzenegger, a longtime champion of tax credits, was able to get a program passed as part of an economic stimulus provision of the state’s 2009 budget. It was dubbed “The Ugly Betty” bill, named after the ABC show that had relocated from L.A. to New York.

Though hailed as a significant step, the new film sweeteners had some key limitations. The pool of money was small — capped at $100 million annually over five years. And it couldn’t be applied to offset the cost of actors’ salaries, a key driver of budgets.

In reality, the program was too small and restrictive to compete with a growing crop of rivals that had larger tax breaks and fewer restrictions.

Chief among them was the United Kingdom, which soon began to attract a number of big-budget movies thanks to a hugely popular 25% cash rebate on production expenses, including money spent on actors’ salaries and other above-the-line costs.

In a paradigm-shifting move, Warner Bros. purchased Leavesden Studios outside of London in 2010, investing more than $160 million into the facility. Much of the blockbusters “Wonder Woman” and “Barbie” were filmed there.

Although the California program was tripled to $330 million annually starting in 2014, it did little to halt the continued exodus of film work. Marvel Studios began moving its production operations to Georgia, enticed by the state’s uncapped tax credits that could be used for actors’ salaries. Both “Black Panther” and “Avengers: Infinity War” were filmed largely at Trilith Studios in Fayetteville, Ga. Another historic town east of Atlanta attracted so many movies and TV shows it became known as “Hollywood of the South.” (Last year, Marvel shifted most of its operations to the U.K. in search of even bigger cost savings.)

Marvel Studios, which filmed blockbusters such as “Black Panther” in Georgia, has since shifted operations to the U.K.

(Film Frame / Marvel Studios)

While numerous studio facilities lay empty here, streamers and studios have built major production hubs outside of L.A. Though it still shoots dozens of productions in L.A., Netflix has spent billions to operate production hubs abroad while constructing massive facilities in places like New Jersey and New Mexico.

“Everyone kept saying, if we have more tax credits, then at least we’ll be able to bring production back,” said Monica Levinson, a veteran producer who has worked on FX’s “Love Story” and the movie “Zoolander.” “Well, that didn’t happen. And the crews got better and better out of the country.”

Rising costs

As the rest of the world courted Hollywood, L.A. did little to help itself.

Despite recent improvements to streamline and reduce costs, the city’s film approval system remains a maze of multi-layered permitting, fees and complex logistics, location managers say. The Greater L.A. area has more than 100 jurisdictions, many of which have their own rules, regulations and permitting fees for filming.

Filming in L.A. also has become more expensive compared with other film hubs due in part to higher labor costs and mandatory staffing requirements, such as paid on-set fire safety monitors, and traffic and parking controls.

What’s more, unlike New York, the city doesn’t have its own film commissioner who could advocate for the industry.

An L.A. commissioner would be “somebody that is beating the drum 365 days a year that is not aligned with a special interest other than creating more production in California, which makes our state and our people prosperous,” said Scott Budnick, a producer on the wildly successful “The Hangover” franchise who lobbied for the state’s enhanced film tax credits.

For a time, the loss of market share was masked by a surge in local TV shoots as studios spent heavily to supply content to their new streaming platforms.

But the pandemic and back-to-back strikes by actors and writers roiled the industry. Studios laid off thousands, cut back on films slates and slashed TV spending and it never rebounded. Film incentives became even more critical for those deciding where to shoot.

By the time Gov. Gavin Newsom announced a plan in October 2024 to more than double funding for the film and TV tax credit program, to $750 million annually (closer to New York’s annual allocation of $800 million, although it retained annual caps and doesn’t count actors’ salaries), the industry outlook was bleak.

“I think there was a tipping point between COVID and the strikes that shone a very bright light on the fact that the majority of production had fled the state,” said Baer, the producer.

There are a few bright spots, however.

The critically acclaimed HBO hit medical drama “The Pitt” is filmed almost entirely on the Warner Bros. lot in Burbank, and has injected tens of millions into the local economy while sustaining nearly 1,000 jobs. Two other Emmy-award winning series, Apple TV’s “The Studio” and HBO’s “Hacks,” which just ended, also shot locally.

At Jonathan Nolan‘s urging, Amazon agreed to relocate his post-apocalyptic series “Fallout” to Los Angeles in 2024 after filming its first season in New York, Utah and Namibia. The show received $67 million in California tax credits for its second and third seasons.

Walton Goggins plays the dual role of Cooper Howard and The Ghoul in Amazon’s post-apocalyptic series “Fallout.”

(Courtesy of Prime Video)

“We want to keep shooting here,” Nolan said. “I don’t want to pack my kids off to the back end of beyond just for the privilege of being able to continue doing what I’m doing.”

To build support for the expanded credits, Nolan last year allowed state lawmakers to visit the sets of “Fallout,” including at the Melody Ranch in Santa Clarita.

“I think they were struck by just how big an endeavor this is,” said Nolan, whose brother Christopher is director of “The Odyssey,” (The epic film was shot across Greece, Sicily and several other countries.) “These are hundreds or thousands of jobs on one production alone, hundreds of millions of dollars being put in the local economy.”

Nolan and others in the industry admit the California program is imperfect.

Mayor Karen Bass, who backed the tax credit program in 2009 when she was speaker of the California Assembly, has touted the success of the expanded incentives, saying they’ve created “thousands of good-paying union jobs … right here in Los Angeles, bringing direct investment to our community.”

Since the expanded program went into effect last July, 179 projects have generated $7.2 billion in direct production spending, bringing nearly 38,000 cast and crew jobs to the state, according to the California Film Commission.

“We remain committed to supporting the entertainment industry here and feel optimistic and energized by the response from the community to the program’s modernization and enhancements,” Colleen Bell, the commission’s executive director, said in a statement.

Bass, who is up for reelection, said she would redouble efforts to remove tax credit caps and further reduce film permitting fees “because this industry is core to the history, culture and economic power of Los Angeles.”

The question, however, is whether L.A. is still core to the film industry.

Earlier this year, writer and director Ryan Coogler, who won an Oscar for his “Sinners” screenplay, began filming the pilot for a reboot of “The X-Files.”

During the “Happy Sad Confused” podcast, Coogler called the drama “one of the most beautiful American television shows ever made” and assured fans that while he planned to put his own stamp on the seminal series, his version would pay homage to the original.

“We intend on having both monsters of the week and also the overarching conspiracy,” he said.

And like the original series, it was shot in Vancouver.

As performers protest and studios sue in their war on artificial intelligence, the entertainment industry is deepening its dependence on it.

Although few places are better than Hollywood at crafting a narrative and concealing what happens off-frame, a Los Angeles Times survey of job postings sheds light on what is happening offstage.

Among hundreds of job postings in late June, more than one in 10 was likely connected to AI. The top studios’ public postings suggest they have been recruiting people to build AI tools. They are also recruiting teams to defend their intellectual property against unauthorized AI use.

“There are plenty of studios that are hiring [for AI] but never talk about it in public,” said Yoland Yan, a co-founder of ComfyUI, a company that helps studios juggle different AI tools.

Companies have been hesitant to detail how they use generative AI in film production — partly because they are concerned about consumer and union backlash.

The Walt Disney Studios complex on May 3 in Burbank.

(Eric Thayer/Los Angeles Times)

Some in Hollywood described AI use as the new cosmetic surgery, where everyone knows it is happening, but few will admit to it.

Recent want ads show Amazon MGM Studios trying to find a principal AI executive and Walt Disney Studios advertising for a production innovation technologist job.

“What you’re seeing in those job postings is that adoption is already happening,” said Bryn Mooser, chief executive of Asteria, an AI film studio.

Netflix recently posted a job that didn’t exist a year ago.

The streamer was hiring for the role of “Manager, Generative Workflows,” a job to help integrate more AI into Netflix films. It promised hands-on experience with the cutting-edge technology.

“The industry is flooded with speculative GenAI roadmaps, but few are battle-tested in production,” the post said, referring to generative AI. The post said the role will work on introducing AI into Netflix’s slate of films being released in the U.S. and Canada.

Although some companies may be shy about sharing their AI plans, big stars who don’t have to answer to others have been more open about their embrace of the new technology for storytelling.

An exterior view of the Netflix sign at Netflix on Vine in Hollywood in 2025.

(Allen J. Schaben/Los Angeles Times)

Rejecting AI is like picking a horse and buggy over a car, said “Star Wars” creator George Lucas.

“Artificial intelligence means it’s much easier for us to make movies,” he told a trade magazine earlier this year. “There’s nothing you can do about it. That’s progress. It’s the future.”

Some in Hollywood have a softer stance on artificial intelligence, with studios cutting deals with AI companies, and filmmakers like Martin Scorsese backing AI companies.

Ben Affleck launched an AI film tech company then sold it to Netflix for half a billion dollars.

When launching InterPositive, Affleck said he wanted to keep “storytelling human” by building AI tools that could fix lighting, generate missing shots and other things while “keeping creative decisions in the hands of artists.”

The Times’ survey turned up two senior InterPositive roles to update the programming to apply AI to visual effects .

The Culver Studios on Feb. 12 in Culver City.

(Kayla Bartkowski/Los Angeles Times)

To gauge what is happening behind the scenes, The Times used Claude Code to build a scraper to identify job postings at Disney, Universal, Paramount, Warner Bros., Sony, Netflix and Amazon MGM. It found around 250 film studio job postings that were still public as of late June. Around 30 of those seemed to be connected to AI.

Disney, Netflix and Amazon had job postings that were about using AI on the creative side of the business. Universal, Paramount, Warner Bros. and Sony had job ads suggesting they were also using AI but for marketing, distribution and audience analytics.

The postings suggest the Disney, Netflix and Amazon studios are building repeatable AI workflows for visual effects, animation, sound and dubbing. The companies also seem to be building in-house teams to develop custom generative-AI models, while also using third-party software.

None of the jobs advertised were to create AI that wrote scripts or created AI actors.

Disney’s ten or so AI jobs showed the century-old studio building out its AI research and production muscle, while protecting its vault of beloved characters.

Mouse House is hiring PhD-level talent to study “computer graphics and AI” for Pixar and Disney films, people to “bridge the gap between research and practical studio application.”

Industrial Light & Magic, the Disney-owned visual effects shop, was searching for supervisors to “explore emerging technologies (including AI/Machine Learning)” to develop new production workflows.

The company’s audio post-production unit, Skywalker Sound, seemed to be recruiting to build proprietary AI models for soundtracks, voice separation, and voice transfer, the process of taking a speaker’s tone and pitch, and applying it to new content.

Disney was also hiring to defend itself. Three of its jobs were for “content security” to assess AI tools and guard against piracy, watermarking and rights-protection work.

The company’s public posture has so far been pursuing lawsuits against AI companies for inappropriate use of copyrighted material, and it pulled out of its plans to invest $1 billion in an equity investment deal with OpenAI.

Netflix’s posts suggested it is bringing more AI to the creative side of its business.

Netflix’s senior director of creative innovation, Girish Balakrishnan, outlined at the Runway AI film festival how AI was used to create soccer fans in “Brazil ’70” and establish shots for fight scenes in “Glory.”

Amazon, an early adopter, was hiring a principal AI executive to drive AI-tool adoption across production, plus roles in operations automation and LLM content classification, the listings revealed.

The Seattle-based streamer has been the most aggressive AI adopter in studios, and commissioned three AI animation series through its GenAI creator fund in May. Amazon has also bankrolled a Manhattan Beach production services company, Innovative Dream.

Even as studios build bigger AI teams, many in the industry are resisting, and some film fans are concerned.

The actors’ guild SAG-AFTRA in June ratified a new four-year contract with special protections against synthetic performers, and the union has backed a national bill designed to protect individuals from unauthorized, AI-generated digital replicas.

Studios have met with the union twice a year since 2023 to provide a confidential report on their AI-related activities. The studios tell the union they aren’t yet using AI that would entirely replace humans, said a person familiar with the discussions.

The union says it has no evidence that generative AI is being used to create performances, and the studios are supposed to notify the union if that happens.

Actors, writers, production staff and movie fans are still resistant to the overuse of AI and defining when and where it is acceptable, so studios are treading lightly, said AI film studio CEO Mooser.

“It’s been really a challenging thing to adopt both socially, ethically and legally, but we are seeing more adoption of it than we’ve ever seen before,” he said.

Two of the biggest box-office standouts of 2026 so far were not made by established studio directors or built on franchise IP.

“Obsession” and “Backrooms” — horror films from internet-native directors in their 20s — have outperformed far more expensive studio releases.

The breakout success of these films has ignited debate across Hollywood about what made these movies so popular, especially among Gen Z moviegoers who haven’t been flocking to cinemas in recent years. Here’s what to know:

The numbers

”Obsession” was directed by 26-year-old Curry Barker, who got his start on YouTube with sketch comedy and horror shorts. Released May 15 by Focus Features, the film was made for just $750,000 but opened to a staggering $17 million and has improved on its debut every weekend since.

“Obsession” set an all-time horror record for the biggest fourth weekend for a film at the domestic box office, raking in $25.4 million. It now ranks as the year’s fifth most popular film, nearing $200 million domestically and roughly $295 million worldwide — ahead of Pixar’s “Hoppers” ($166 million) and Paramount’s “Scream 7” ($121 million), per Box Office Mojo.

“Backrooms,” from 21-year-old Kane Parsons — known on YouTube as Kane Pixels — drew on an online fascination with liminal spaces, leading audiences through an endless run of nearly indistinguishable rooms.

Released May 29 by A24 (known for such acclaimed films as “Moonlight” and Everything Everywhere All at Once”) on a reported $10-million budget, it opened to $81 million and crossed $100 million in under a week.

Within two and a half weeks, it had outgrossed the entire theatrical runs of horror films “Five Nights at Freddy’s 2,” “Smile” and “Scream 7.” It sits as 2026’s eighth-highest-grossing film.

Who is watching?

The audiences are young. In recent weeks, nearly 90% of “Backrooms’” viewers were under 35, with more than half under 25. Over “Obsession’s” first few weekends, 75% of the audience was 17 to 34, which is significant at a time when major studios have struggled to consistently get younger viewers to trek to the multiplex.

Why it’s working

Audiences have clearly latched onto the stories, said Jason Blum of Blumhouse–Atomic Monster, who worked on both films.

“There’s been an audience kind of waiting to get back to the movie theaters, and we in Hollywood really have not landed on what would get them back,” he told The Times in an interview this week.

Blum, who upended horror genre with the “Paranormal Activity” franchise, ties the success of “Backrooms” and “Obsession” to a connection to the directors’ origins.

Because the films were made by creators who speak to younger viewers daily on YouTube, he said, that generation “feels like they’re being spoken to.”

David Gross, an analyst at FranchiseRe, framed it as a new pipeline of talent and material. Creators can build large followings very inexpensively, he said, and their stories arrive further developed — which expedites the development and discovery process. He called internet-based storytelling “another additive source for material for movies.” Blum added that the films’ success could make studios more willing to bet on undiscovered directors who “might not have been considered” before.

Rosie Ramirez, chief marketing officer at Galaxy Theatres, said a young first-wave audience tends to generate buzz. More than a month after “Obsession” was released, she said, the Nevada chain’s four California locations are only now seeing a second wave of moviegoers curious about the hype.

Notably, the rise of these two films has unfolded in the shadow of major releases like Disney’s “Star Wars: The Mandalorian and Grogu,” and Mattel’s “Masters of the Universe,” both of which returned underwhelming numbers in their respective opening weekends.

Is it a trend or an anomaly?

Whether this marks a lasting shift or a fluke is unclear. May crossed $1 billion in box office — with “Backrooms” and “Obsession” doing much of the heavy lifting. Despite the improvement, the box office has yet to full return to pre-pandemic levels, with the summer tracking roughly 3.5% behind summer 2019, said Comscore’s Paul Dergarabedian.

And Dergarabedian questioned how the industry could replicate a success that, in his words, was “authentically and organically created” rather than manufactured: “It just happened,” he said.

Ramirez argued the broader summer slate — franchise tentpoles like “Toy Story 5” alongside some original surprises — points to a healthy box office regardless, a reminder that “it doesn’t always have to be the big summer blockbuster.”