The Academy Award-winning film ushered in a hit franchise for New Line Cinema, employed thousands of crew members, spurred a tourism industry called the “Frodo economy” and, thanks to breathtaking landscapes along with low-cost labor, established New Zealand as Hollywood’s go-to destination Down Under for filming.
“It’s a source of pride that we’ve built an international industry here and we have long-standing relationships with the Hollywood studios," said Gisella Carr, chief executive of Film New Zealand, a group that helps filmmakers find locations. “We’re talking about an industry which is growing faster than any other sector of the economy.”
But that growth could be severely stunted, ironically because of a brawl between the man most credited with building up the industry -- New Zealand filmmaker Peter Jackson -- and New Zealand actors set to work on his next project, “The Hobbit,” the predecessor story to "The Lord of the Rings."
Warner Bros., its New Line Cinema unit and co-financing partner Metro-Goldwyn-Mayer recently greenlighted production of "The Hobbit," which has had a history of setbacks that delayed shooting for years. But the studios have threatened to move the two-picture project, which is scheduled to begin filming in February, after a dispute with New Zealand Actors Equity.
With the support of an Australian actors union, the group mounted an international campaign to press for union wages and work rules for New Zealand performers, who work as independent contractors. Even after the unions called off their boycott, producers of "The Hobbit" said they were still considering filming elsewhere.
“The damage has been done,” Jackson warned ominously in a statement.
The prospect of losing the $500-million project has sent a temblor through the small South Pacific island nation of 4 million people, where the film industry is one of the largest private employers.