Compare it to Hollywood. Sure you can make movies anywhere, but you don’t.
https://www.scientificamerican.com/article/why-silicon-valle...
Or an article from this year listing LA as the 3rd-best place, after Atlanta and Vancouver, for moviemakers to live: https://www.moviemaker.com/archives/best_of/best-places-to-l...
One important factor at work here is the Internet. Effects companies, for example, are all over the place, including London, New Zealand, Vancouver, LA, and even here in San Francisco. Big movies will often use multiple companies, something that would have been very challenging 30 years ago.
Silicon Valley does have capital and talent. But it's not like that capital is in doubloons in a vault. It's purely digital. A big reason it's not more mobile is that VCs wouldn't deign to stop in a flyover state. Talent isn't quite as mobile, but a) advances in technology mean talent is less necessary, and b) the rise in remote work means the location of talent is less and less meaningful.
BS. The online form literally takes 5 minutes to fill out. "Creative artists" earning under $300,000 are exempt from paying city taxes, as are small businesses grossing under $100,000.
Take 30 seconds to search and you can find stories of folks who got shafted for thousands because they didn't even know such a thing existed and needs to be reported early even if you do. The fact you most get an exemption is another example of big brother showing who's boss for no gain to the city.
How about you stop being a libertarian keyboard jockey and actually try to get involved in running a business or two in Los Angeles, like I am doing? Everything you have posted is bullshit.
My wife happens to be a "creative artist" who does a lot of work in the film industry here. She is also the type of person who did not do basic research into starting a business and did not bother to find out what taxes she was supposed to be paying. I don't know why you think that being an airhead is the city's fault. The fine was not "thousands of dollars," it came out to $80-something for two years of unreported city taxes. It was literally a letter and a couple of phone calls to settle that.
http://www.laweekly.com/news/did-you-just-get-a-500-freelanc...
http://www.latimes.com/opinion/op-ed/la-oe-horowitz-taxes-ta...
https://www.nbclosangeles.com/news/local/LA-Freelancers-Get-...
Not to mention the links from the grandparent making the case of the declining industry: https://news.ycombinator.com/item?id=16621760
Oh, and the recent hidden trash tax, 35 million a year: http://www.latimes.com/local/lanow/la-me-ln-trash-bills-los-... (Rent went up $100 in an already soaring rent environment.)
Paid shill from the city government? Sure sounds that way. It's obvious you've never lived in sane tax environment like New Zealand where you file in about thirty minutes a year on their website. That's what you're competing with.
They also aren't unfair in the sense that LA can't do exactly the same thing. The theory of places like Atlanta and Vancouver is that the film industry has positive externalities, so in theory there's nothing wrong with capturing some of that value and paying the people who create it. It's a free country, after all, and if LA isn't willing to bid as high, then perhaps the market has spoken.
Personally I'm not a big fan of tax incentives, but unfair isn't a word I'd particularly use to describe them.
But so far the companies, business, and performers are still based in Hollywood.
Question is: after a distributed generation or two, does that still hold as a natural law?
As you say, actual filming has become somewhat more distributed though that is somewhat constrained by the whole ecosystem of associated trades that are needed to setup and do filming.
Programming isn't like this.
The Four Asian Tigers have already surpassed SV on that. There's obviously a government-related cultural gap that won't win them any popularity contests.
The same analogy can be made for NYC with the finance industry.