Source: New Zealand Government
Economic and Regional Development Minister Stuart Nash says a landmark deal has been agreed with Amazon for The Lord of the Rings TV series, currently being filmed in New Zealand.
Mr Nash says the Memorandum of Understanding (MoU) secures multi-year economic and tourism benefits to New Zealand, outside the screen production itself.
“The agreement with Amazon not only creates an enduring legacy for our screen industry, it generates local jobs and creates work for local businesses,” Mr Nash says.
“It will enable a new wave of international tourism branding and promotion for this country. It opens the door for Kiwi businesses to access future innovations in technology, research and development through connections with the wider Amazon group.
“The MoU has been signed following negotiations between Amazon and the New Zealand Film Commission; Tourism New Zealand; and the Ministry of Business, Innovation and Employment.
“Under the MoU, Amazon has provisionally been granted an extra 5% from the Screen Production Grant in addition to the 20% grant the production already qualifies for. This entitles Amazon to a potential rebate of 25% of its qualifying spend in NZ.
“There is considerable economic and tourism potential in the Lord of the Rings Project. Not only does it bolster our global reputation as a desirable place to make screen productions, it will further strengthen our tourism appeal to visitors with the ‘Middle-earth’ theme.
“Under the MoU, the Government’s investment will enable significant economic, cultural and industry development benefits to New Zealand over many years, including:
- Job creation – Season One is currently in production, based in Auckland, with more than 1,200 people employed. Approximately 700 additional workers are indirectly employed by providing services to the production.
The TV series is expected to be a multi-year production and filming on location is provincial regions will extend the economic impact further across New Zealand, especially in the South Island. The production has so far seen:
- 67% of the speaking roles cast to NZ actors
- 21% of the major roles cast to NZ actors
- 92-95% of the crew are New Zealanders
- 80% of the Heads of Departments (HOD) are New Zealanders
- New Zealand businesses – Amazon will co-ordinate with MBIE to foster a wider relationship with New Zealand firms.
Amazon will promote New Zealand businesses, innovations and mutually-beneficial R&D opportunities. Each season will have an R&D theme. Season One will provide opportunities to explore potential collaboration in the aerospace sector.
- New Zealand screen sector – Amazon will work with the NZ Film Commission to stimulate growth, in both business development and skills within the screen sector.
An early focus will be on placements and internships in production management, directing, production accounting, lighting, dolly grip, editorial, and location management. The arrangement will also provide an opportunity to strengthen the perception of the New Zealand screen offering, by showcasing locations, facilities and the depth and experience of New Zealand cast and crew.
- New Zealand tourism boost – A close association has been established between New Zealand and Middle-earth.
Prior to Covid, 19% of visitors, around 351,000 people, cited The Hobbit movies as a factor that influenced them to visit New Zealand. The Government anticipates the extension of this association, in a new phase, will offer significant tourism and country-branding benefits as we start to re-open our borders to international visitors.
Tourism NZ will work closely with Amazon to deliver campaigns that build brand preference and desire in a competitive environment as global travel resumes
“It is estimated that Amazon is spending up to $650 million in New Zealand for Season One. The MoU entitles it to a potential rebate of 25% of this expenditure, or approximately $162.5 million.
“The Screen Production Grant is a critical part of remaining internationally competitive and attracting productions and jobs to New Zealand. It builds on our strong reputation for talented cast and crew, post-production facilities, and magnificent scenery.
“Government support for the screen sector is vital, given the economic benefits and jobs it generates, as well as showcasing New Zealand in tourism markets as borders reopen.
“These types of grants, rebates and incentives are the global norm for countries who want to be part of the international film industry.
“Without this rebate, jobs and economic opportunities would be lost overseas in the fiercely competitive global film industry. For example, when Australia reduced its rebates in 2017, it lost 97 per cent of foreign investment in screen productions,” Mr Nash says.
Background Data:
- In 2017 the screen industry employed over 16,200 people and generated revenue of $3.5 billion. New Zealanders make up 86 percent of labour employed on international productions.
- Over 60 percent of production budget is spent in other sectors including hospitality and catering, construction, transport, beauty and professional services.
- In the next five years NZ expects to attract over $4.4 billion in international production spend into the economy creating opportunities for New Zealanders.
- Five other productions have received the 5% Uplift: Power Rangers Dino Charge, Pete’s Dragon, Ghost in the Shell, The Meg and Mortal Engines.
A summary of the MoU is copied below. The MoU document is online here
Summary of Amazon MoU
Background
Amazon announced in September 2019 that it would be locating its production of the much-anticipated The Lord of the Rings television series in New Zealand. The series, which began production in Auckland in early 2020, will be over multiple seasons, and is expected to explore new storylines that occur before the events of the “The Fellowship of the Ring”. As the exclusive production location, the development of this new series is a valuable opportunity for New Zealand to revitalise and extend the already longstanding legacy and relationship with Tolkien’s stories.
In recognition of the potential economic benefits to New Zealand of this relationship, Amazon Studios was granted provisional approval of an additional 5% New Zealand Screen Production Grant (NZSPG) on top of the existing 20% that the production already qualifies for.
Two Memoranda of Understanding were signed in December 2020 following negotiations between Amazon and the government agencies: the New Zealand Film Commission (NZFC); Tourism New Zealand (TNZ); and the Ministry of Business, Innovation and Employment (MBIE). An overarching Series MOU was signed to establish the key principles and obligations under the 5% Uplift, and a Season MOU is in place to relate specifically to the required activity relating to Season One of the production. Subsequent Season MOUs will be negotiated for each future season.
The MOU’s three pillars:
1. NZ branding activities to promote NZ internationally (led by TNZ)
This provides the opportunity for New Zealand to strengthen its international brand, with a campaign to promote New Zealand as the home of the series, timed to coincide with the airing of the first season on international screens. This will involve access to key cast and crew, location footage and behind-the-scenes clips. The timing of this promotional work will likely coincide with the reopening of international borders for leisure travel purposes and will create a timely vehicle to keep New Zealand’s brand alive in the minds of future international travellers.
2. NZ screen sector training and promotional activities (led by NZFC)
Amazon will work with the NZFC to stimulate business and skills growth in the screen sector. This includes a focus on supporting the growth and capability of New Zealand’s screen sector workforce through placements and internships on Amazon Studios’ The Lord of the Rings series production, workshops, and masterclasses. The placement and internships are underway, focused on production management, directing, production accounting, Lighting, Dolly Grip, Editorial, and Location management.
New Zealand’s success in securing this large scale and multi-season production is a significant boost to the local screen industry, creating jobs at all levels and exposure to world-leading production techniques and skills. Through the MOUs, Amazon is committed to growing and nurturing the talent/skills base of the New Zealand screen sector, to support business development within the New Zealand screen sector and to grow the New Zealand screen sector’s infrastructure base.
The partnership will also develop a marketing programme to profile the growing New Zealand screen sector with a specific focus on an ongoing pipeline of mixed-scale productions through the showcasing of New Zealand’s:
- highly skilled and growing talent base;
- expanding infrastructure offering;
- accessible and diverse region locations;
- post-production offering; and
- screen sector creativity and innovation.
3. Innovation programme to create openings into Amazon (led by MBIE)
The purpose of the innovation programme is to:
- Build a wider relationship between New Zealand and Amazon;
- Leverage New Zealand’s relationship with Amazon;
- Profile New Zealand businesses, innovations and R&D opportunities to a global audience; and
- Advance mutually-beneficial R&D opportunities.
Innovation programme commitments include:
- Delegation of businesses/teams from Amazon to visit New Zealand each Season, or participate virtually, for an innovation summit, speaker series or other events; and
- Exploring strategic opportunities to invest in and advance:
- STEM programs and donations for primary and secondary education;
- Innovation challenges;
- Academic research and fellowships; and
- Innovation internships.
Amazon and MBIE will work together to establish agreed-upon themes that align Amazon’s and New Zealand’s goals on a Season-by-Season basis. Potential themes include, but are not limited to, technology and innovations that will be used in the production of the series. These themes may explore specific R&D focus areas, and the parties agree to work together to explore additional or alternative opportunities as they may arise.
