Tech Won't Save Us - Amazon’s Highly Subsidized Foray Into Middle-Earth w/ Thomas Coughlan

Episode Date: September 1, 2022

Paris Marx is joined by Thomas Coughlan to discuss Amazon’s foray into Tolkien’s fantasy world, the big subsidies it received to film in New Zealand, and how its decision to move the series to the UK is giving fuel to demands to reassess the support for Hollywood productions.Thomas Coughlan is a senior political reporter at NZ Herald, and formerly was a journalist at Stuff and Newsroom. Follow Thomas on Twitter at @coughlthom.Tech Won’t Save Us offers a critical perspective on tech, its worldview, and wider society with the goal of inspiring people to demand better tech and a better world. Follow the podcast (@techwontsaveus) and host Paris Marx (@parismarx) on Twitter, and support the show on Patreon.The podcast is produced by Eric Wickham and part of the Harbinger Media Network.Also mentioned in this episode:Thomas wrote for Stuff about the effort by the New Zealand government to attract Amazon to New Zealand and how it hoped the relationship would go beyond the TV series. For the NZ Herald, he also wrote that Amazon’s decision to move the series away from New Zealand will have implications for tourism and wasn’t communicated to the government until the last minute.Benjamin Clark wrote about how film subsidies have been essential to attracted big Hollywood productions to New Zealand.Madelaine Chapman dug into how much Peter Jackson has benefited from those subsidy schemes.Amazon is spending about $464 million on the first season of The Rings of Power.Amazon announced it was moving future seasons of the show to the UK in August 2021, causing frustration in New Zealand.There were concerns about safety on the set of The Rings of Power after stunt workers were injured and they didn’t seem to be properly reported to authorities.In November 2021, Unity acquired the technology division of Jackson’s Weta Digital.There’s also a growing debate in New Zealand over whether it should be the site of major data centers.Support the show

Films aren't attracted here purely because of the talent that we offer. And I think New Zealand's film industry is incredibly talented. It is about tax deals, which is, you know, it's a shame. I think it's a sad thing for the film industry globally that it really is a race to the bottom in terms of these subsidies. It's not about artistry or talent, which it really should be. Hello and welcome to Jack Won't Save Us. I'm your host, Paris Marks, and this week my guest is Thomas Coughlin. Thomas is a senior political reporter at the New Zealand Herald and a former reporter with Stuff and Newsroom. I've been looking forward to this episode because there is a new Amazon series that will be launched by the time this episode comes out called The Lord of the Rings,

The Rings of Power. Now, listen, I have lived in New Zealand in the past. I was supposed to go down there to do a PhD, but unfortunately, plans changed because of some visa issues there. And I was a big fan of The Lord of the Rings and honestly still really like the series, you know, since I was in my early teens when I first saw The Fellowship of the Ring in theaters. And so when it was announced that Amazon was going to be making a Lord of the Rings television series back in 2017, when it bought the rights for 250 million US dollars, I was certainly conflicted. Obviously, it's a series that I like. The Hobbit movies I did not really like. And so I was worried that it would continue down that trajectory. And of course, Amazon,

as listeners of the show will well know, is also a company that I am not very fond of. And so Thomas has been reporting a lot as this series has gone into production, as it has encountered issues during the pandemic, as production on the show has now moved from New Zealand to the United Kingdom. And so I thought he would be the perfect person to have on the show to discuss the aspects of this production,

what it has meant for New Zealand, certainly what working with Amazon and trying to entice Amazon to film the show in New Zealand meant for the New Zealand government and, you know, for the people of the country. And we also talk a bit more broadly about the film industry in New Zealand and why New Zealand has such a large film industry. And of course, part of the reason for that is the generous tax incentives that are provided by the government and how the news that Amazon will be moving production to the UK is adding more fire to a conversation about whether it really makes sense to be subsidizing Hollywood productions to such a significant degree.

And so I really enjoy this conversation. I think there's a lot of really interesting points that Thomas makes in the show. Since the show is out now, you can certainly judge for yourself about how you think it is. By the time this is recorded, I certainly haven't seen it. But I think it's very clear to be able to look at what Amazon did in this case and saw how it really took advantage of New Zealand and the generous tax incentives that were provided in order to do a lot of the pre-production work on this show to get everything ready to build the initial sets, put the costumes together. And then once all that work was done on the first season, which was a really big spend and likely more than what they'll

spend on future seasons, then they're able to move to the UK, still take advantage of tax incentives there, of course, but take all that work with them. And so I hope you enjoy this conversation. If you do, make sure to leave a five-star review on Apple Podcasts or Spotify. You can also share the show on social media or with any friends or colleagues who you think would learn from it. And if you want to support the work that goes into making the show every week, you can join supporters like Dern from the UK by going to patreon.com slash techwon'tsaveus and becoming a supporter. Thanks for listening and enjoy this week's conversation. Thomas, welcome to Tech Won't Save Us. Thanks for having me. I'm really looking forward to speaking with you. I've been reading

your reporting on the Amazon series, the new Lord of the Rings series that, you know, was filmed the first season of it in New Zealand. And I wanted to get a bit more information on that now that, you know, at the time this episode airs, the season itself will be starting the first season, but we're speaking about a month before that. And so I want to start with, I guess, to get an idea of how people are thinking about this. You know, it's been quite a lot of work for the people working on the show, but also quite a journey for New Zealand itself as it has fought to win the production and then subsequently lost its future seasons. What's the mood down there these days about the series and the broader decades-long project of associating New Zealand with Middle Earth? It's incredible how strong that association is. Whenever I travel overseas and I say where I'm

from, one of the first things they mention is Lord of the Rings. I don't think there are many countries in the world which would have as strong association with one single film. Australia, our closest kind of neighbor, I don't think has such a strong association with one film series. But that link with New Zealand is very strong to the extent that I think a lot of people probably associate Lord of the Rings more with New Zealand than the country in which the books were written and the country in which the books sort of most accurately describe and mirror, which is obviously the UK. The association started in the 90s. The director of the films is a New Zealander. And I think that the association is a fair one. The films didn't just come to New Zealand to film on location because the locations are quite nice. They really were made by thousands of New Zealanders. The

director of the films, Peter Jackson, established massive film studios in Wellington, where I live, actually in the suburb where I live. And he established Weta Workshop, the physical effects company, the costume company, Weta Digital, the digital effects company. It was a massive undertaking. And The Lord of the Rings kind of took the New Zealand film industry to a different kind of level, to the point where it could compete with other countries much larger. So it's a point of national pride because all of a

sudden New Zealand kind of saw itself as a kind of underdog competitor to Hollywood. In fact, you know, the city where I live in Wellington called itself Wellywood for a while. And it even has a sign which mimics the Hollywood sign, but says Wellington, but in the Hollywood lettering, it's kind of cringe, but it's the way New Zealand was back then. And obviously The Hobbit, also a Peter Jackson film, and just sort of followed the same kind of trajectory. And the other thing that encouraged the films to come and return are these tax breaks that the government gives the film industry.

So for every dollar that you spend in New Zealand, you get 20 cents back. And if you spend a large amount of money in New Zealand, then you get 25 cents back. So it's an incredible tax break that a quarter of every dollar you spend, a quarter of every dollar can come back to you. It's massive and it's incredibly costly. And there was a time when the Hobbit films were potentially going to leave New Zealand because of some local industrial strife. They were won back with a sweetheart tax break deal. And there was some concern that the Amazon series would not

film in New Zealand. And it was a great kind of point of national pride that they came to New Zealand. You know, New Zealand is no different to any other country in the world right now. There are some immense social problems in New Zealand with healthcare, with housing. I mean, you know, everything that I'm sure everyone around the world is facing right now. And I think as these tax breaks have attracted more and more films to New Zealand, Avatar is made here, other sort of massive Hollywood productions, Mulan was made here, large TV series are being made here as well, to the point now where these tax breaks were meant to cost about $60 million a year.

They're now costing a quarter of a billion dollars every year. And there is a big political debate now over whether or not the film industry deserves such massive subsidisation effectively and whether that money should be spent somewhere else. There is a real tension because there's a real sense of pride when you're from a tiny country like New Zealand that's used to being completely, you know, in many cases, New Zealand is literally left off world maps. You know, we're so insignificant to some people that people genuinely forget to put us on the map. In fact,

the famous globe at Universal Studios in Los Angeles didn't have a New Zealand country on it, I think, until Peter Jackson filmed King Kong and asked them to put one there. I'm not sure if that's an urban legend, but that is what I'm told. And it's, you know, there is that tension there that these things are very costly and it's kind of alarming to see so much of your government be captured by one industry. But there's also a massive sense of pride because you watch these films and they are incredible. And what a tiny country is able to do in terms of making films that are as good as anything Hollywood can make is fantastic. Yeah, I think that makes a lot of sense. And, you know, we'll dig into many of the points that you've talked about in giving

us a really good overview of the development of this series over times and the more, I guess, the questions that are arising more often as New Zealand faces these challenges that Canada faces as well with health care and things like that. I want to talk specifically about the Amazon series, and then we'll get into some of those bigger questions. In 2017, Amazon bought the rights to the appendices of Lord of the Rings, The Return of the King for 250 million US dollars. And essentially the events of the second age of Tolkien's fantasy universe are contained within that part of the book. The Lord of the Rings books and Jackson's film series take place in the third age. So it's a bit different from, you know, what we've seen on screen up to this point. How long did it take, you know, after that deal was

made for contact to be made between Amazon and the New Zealand government about having the series set in New Zealand once again? So early contact took place very soon after the deal was announced but I think the main negotiations was sort of 2019 I think as it was when most discussions took place. There were two kind of issues with the discussions. First where the films would be filmed so obviously New Zealand got in quite early to make sure they would still be filmed here. It's quite an incredible thing I think for the government of the country to sort of approach film studio to make sure that they make a tv series in their country then there was the question over the size of of the rebate that the country would get and that that sort of took place over over 2019 and then 2020 it was a sort of a pandemic related issue with the negotiations but

yeah it was um New Zealand did not want to be left out of this production and got in quite early and I think the first press release announcing that films would likely be filmed here was sent out 18, 19. I need to check, but it was very early on. Yeah, so it was very quick for the government to really get involved and try to ensure that this property was going to come back to New Zealand and stay in New Zealand because of this long-term association. The New Zealand government surveys people who come to New Zealand to ask them why they've come here. Obviously, for most of the world, unless you come from Australia or the Pacific Islands, for most of the world, it's quite a long trip if you holiday in New Zealand.

So we really want to know what drives people to come and holiday here because tourism is quite a big industry for us. And to this day, one of the top five reasons for coming here is because of the association with Lord of the Rings. I'm sure there are a number of times in Canada seen on screen that would inspire people to go to Canada, but that strong association with one film is quite unusual, I think. So for tourism reasons, the New Zealand government was quite keen to make sure that no other country, I think there was strong, I mean, the production has now gone to the UK, and there was strong interest from places like Ireland or Croatia. And the government was very concerned to make sure that no other country could kind of

muscle in on New Zealand and form a relationship with Lord of the Rings so that New Zealand was always a preeminent kind of Lord of the Rings associated country. No, absolutely. And I want to come back to the tourism point a bit later in our conversation as well. So can you tell us a bit about how these negotiations actually played out? You know, what were the two parties, Amazon and the New Zealand government, looking for from these negotiations in order to have this series film in New Zealand?

And how did the New Zealand government try to convince Amazon to stay in the country? One thing that New Zealand's got up its sleeve is that we do have the infrastructure here to do this. In fact, one of the only issues with New Zealand is that sometimes there is so much production in New Zealand that we actually lack the infrastructure to do multiple large productions at once,

which is, you know, it's a nice problem to have that so many people are keen to film in your country that you can't actually have them all at the same time. New Zealand had that up its sleeve. Obviously, it's got the locations up its sleeve. And actually, one thing that the producers didn't anticipate is the fact that New Zealand had that up its sleeve. Obviously, it's got the locations up its sleeve. And actually, one thing that the producers didn't anticipate is the fact that New Zealand had quite a successful COVID-19 response. That meant that during 2020, when some of the series was filming,

that New Zealand productions were able to get back up on their feet and start filming in a really unencumbered way. Whilst the rest of the world was sort of in lockdown, New Zealand was able to not be in lockdown and continue filming. Of course, they didn't know that when they were negotiating, but nice to have. And, of course, the tax break thing, which we've already discussed, and that is obviously, you know, a huge incentive

when effectively a quarter of your production's budget is being underwritten by the New Zealand government. And I think the calculation that our government was working on is that the series as a whole, you know, across the multiple seasons that they film would work out to be, you know, about a billion dollars for the whole thing. I mean, we don't know how many seasons it's going to run to, but we were assuming about a billion dollars. So quarter of a billion dollars, New Zealand dollars from the government to underwrite this series is probably not to be

sniffed at. In terms of what we wanted out of it, well, the government was quite attracted to Amazon Studios because New Zealand's tech industry, small game companies, Pickpock and the like. We have Xero, which is an accounting software firm, which is one of our great tech exporters. They're all around the world now. But, you know, obviously we're not the US. I imagine we probably have a much smaller tech sector than Canada, the UK, other kind of comparable countries. So forging a relationship with Amazon was quite important. And the government was quite keen to kind of try and get a bit more, you know, of the wider Amazon group to take an interest in New Zealand.

So they were keen to negotiate visits from. And this is something that Amazon had to bring to New Zealand as well as, you know, lots of money to spend here. You know, they are one of the biggest tech companies in the world. And so New Zealand was quite keen to forge a relationship with the broader company, Amazon Web Services, potentially setting up a cloud server here, which I think they've done now. Although that was sort of separate to the deal. We were keen to kind of forge connections between different parts of the Amazon kind of ecosystem, the Amazon world,

so that our tech sector could kind of piggyback on that and develop with Amazon. Each season was going to have a different kind of tech focus, I guess. And so as part of each season returning to New Zealand, Amazon would offer kind of a different part of its company, you know, Amazon Web Services, for instance, like Carmen, and meet with other cloud computing interested places in New Zealand. And we would forge connections with that part of the company. So because the series has now left New Zealand, I guess we'll never know how successful that might have been. It sounds like a bit of a pie in the sky kind of thing, to be honest, like Amazon was going to send a different executive each time to New Zealand to, you know, meet with people over here.

Obviously, the pandemic, we shut our borders, so we couldn't take advantage of that. But I think the government was quite attracted to the idea that Amazon executives would fly to New Zealand for each season. We could send young, bright, up-and-coming tech entrepreneurs to meet them, and they could shake hands and take a photo and whatever, and maybe that would supercharge our tech industry. But obviously, that won't happen now because the series has now left. And because the pandemic so heavily affected the first season

of Amazon, I don't think there was much of a tech crossover either. So there you go. No, that's completely fair. And I appreciate that about the negotiations to get that insight into it. And I have some questions about a few of those aspects of it. But I think before we get into those, just a couple other things about, you know, the deal between Amazon and the government and, you know, the negotiations and negotiations were kind of finishing up, there was this kind of last minute prospect of the series being moved to Scotland on Amazon side. You know, they were saying we might film it in Scotland instead of New Zealand. Do you have any idea if that kind of pushed things to a close or if that pushed the New Zealand government to make concessions that maybe it wouldn't have made if it wasn't so pressing at the end there? These things do come down to brinksmanship at the end. And I guess the thing that Amazon really wanted in terms of bringing these negotiations to a close is we have this thing called a value uplift. And so most production, you know, that comes to New Zealand, if you spend, you know, whatever amount of money, you get 20% of it back if you're filming a film production.

So that's your baseline, which I think is pretty good. It's a pretty generous rebate. If you start any other company in New Zealand, then you don't get that level of rebate. In fact, the tech sector here is quite pissed off because a lot of what New Zealand does in the film industry is tech. It's visual effects. It's a really big part of what New Zealand does is visual effects. So they get 20% of every visual effects dollar rebated. But if you are a game company, for instance, which is fishing in the same talent pool as the visual effects companies,

they have to, you know, every dollar a game company spends, well, they don't get any of it back. There's no special tax deal for game companies. So there's a kind of tension between the tech sector and the film industry because the film industry is heavily subsidized and the tech sector is is not and they're fishing for the same talent the film industry can pay much more for talent than the game industry or the tech industry anyway amazon wanted to make sure that it got that five percent uplift that it got 25 of every dollar back rather than 20 and this is the kind of thing that new zealand could hold over amazon is just saying like we can give you a quarter of every dollar back rather than 20 percent and this is the kind of thing that New Zealand could hold over Amazon is just saying like we can give you a quarter of every dollar you spend

back and not just 20 percent if you demonstrate a significant value to the country at large and that's sort of where the tech partnerships with Amazon that's where you know the tourism partnerships with Amazon came in for an extra 5% of the tax rebate. We would give them an extra 5% of tax rebate if they could demonstrate to us that they would give significant extra value to New Zealand. But, I mean, certainly, like, there is a global race to the bottom in terms of tax subsidies for films. It doesn't allow me to recall what the UK

offers productions in Scotland or if there's a Scotland-specific scheme, but I know that New Zealand had to recently increase its tax subsidies for the film industry because countries like Ireland and the UK were so, so competitive. So we are really kind of racing to see who can subsidize the most. That's interesting. Yeah, it's an ongoing debate in Canada as well, because, you know, we provide film subsidies as well. But usually the one that is of particular interest up here is subsidies for video games industries, because we have a really big gaming sector in large part because, you know, the

subsidies are so lucrative for many of these video game companies that come and relocate here. Well, the game industry in new zealand is really frustrated with the film industry because they get nothing so it's interesting that you subsidize yours because the game industry is very keen for either the subsidy to go completely so that they they aren't always outbid by by the film companies for for talented staff or for the game industry to be subsidized as well that's interesting and you know i noticed that weta digital which obviously was one of these companies started by Peter Jackson, was recently

sold to Unity, one of the big, you know, game engine makers, I guess. Do you have any idea if that changes, you know, I guess, the equation in New Zealand, if that will mean more visual effects work in New Zealand or more of that kind of being moved offshore? Yes, that was a massive deal and it does allow Weta Digital to grow globally. They've kind of split the company. So part of Weta is still owned by Peter Jackson, part of the digital effects arm, but the majority of it has gone to Unity. And I think a large part of that is Weta's significant IP. So they do a lot of in-house development they've done some dr stuff and they also like crowd simulations for instance i think weta on the lord of the rings was one of the pioneers of really sophisticated ai cloud simulations i think before i think they used to sort of a particle effect thing to do to do large crowds and then weta came

up with a program called massive which which basically created large crowds using kind of sophisticated AI. So you'd have these soldiers like fighting each other in quite sophisticated ways in these massive digitally created crowd scenes. It's incredible software and they still, I think, the leaders at crowd simulation. So we're told that it won't mean that large amounts of work will shift offshore. And we're told that, won't mean that large amounts of work will shift offshore and we're told that you know everyone at weta in new zealand has has been told that they're safe um in terms of the jobs for digital effects work like you can be working

anywhere i think that's part of the attraction for new zealand is that you don't need to be you know close to los angeles to do this sort of work um you can do it anywhere in the world but they are they have been told that significant amounts of work will continue to be in New Zealand. But obviously it's very positive for people like Peter Jackson who own the company and for the execs. There is some concern that maybe the kind of really exciting wetter stuff, which is the breaking new ground

in terms of developing new software programs to deal with new and exciting visual effects challenges, that sort of stuff will go offshore and that sort of stuff won't be done in New Zealand anymore. And what will be done in New Zealand is kind of the grunt work, for want of a better term, just sort of plowing through tedious digital animations and the like. And I think that's probably the only anxiety, the main anxiety that people here have. That makes a lot of sense. Yeah. I want to dig into a few of

the topics we've been discussing and the things that were really key to those negotiations between the New Zealand government and Amazon in a little bit more detail. We've been talking a bit about the film subsidy scheme, how that works in New Zealand, how you get 20% back, and then you can get an extra 5% on top of that, depending on negotiation with the government. And how there was also a law brought in in 2010 around the time of the Hobbit films in order to keep Warner Brothers in New Zealand that was dubbed the Hobbit law. Warner Brothers got some additional subsidies as a result, but one of the key things was to restrict the ability of workers to unionize and the sorts of things that they could demand, you know, when they were working on these film projects. After this experience with Amazon, and you know,

as you were talking about with the ongoing kind of debates around the film subsidy scheme, is there any feeling that maybe the government has gone a bit too far in making these concessions to the film companies and that having Amazon leave is going to give more energy to those who would like to see those things changed? Yes, I think the cost of the scheme has certainly brought that debate to the fore. Also, the Avatar sequels have been in production in New Zealand for years now. And there's so much James Cameron likes to do a lot of his own sort of in-house development and so he's been claiming this film subsidy for many many years to make these avatar films and

do sort of R&D with significant support from New Zealand taxpayer and I think the Amazon and the avatar films have both kind of raised this question because again during the pandemic New Zealand shut its borders and it was very difficult for New Zealanders to come home. And I think about one in five New Zealanders lives abroad. And so being able to come home and re-enter your own country is a massive issue for New Zealanders. And so the borders were basically completely shut

and the only way to get into the country was to go into a quarantine hotel for two weeks before you're allowed back into the country at large. And it basically meant that only kind of 6,000 or 7,000 people at a time could re-enter the country, which when you're used to hundreds of thousands of people at a time entering the country every day, it basically made it almost impossible for some people to get home. However, the Avatar film crew was allowed to come into New Zealand because they were filming Avatar at the time

and we didn't want the production to grind to a halt. And again, that sort of raised the question of whether the film studios were getting a good deal out of the New Zealand government because they had the right to re-enter the country when the country's own citizens were not allowed to get into the country easily. And there were heartbreaking stories of people saying goodbye to dying relatives over Zoom.

They were legally not allowed to enter the country because they couldn't secure a place in a quarantine hotel. And the Avatar film crew was allowed in, no questions asked, basically. And you can imagine how that just didn't sit well, that these incredibly wealthy film producers were allowed not just money, almost a higher level of human rights and human dignity. And that really, that was quite controversial at the time. And now, of course, the film subsidy regime, you know, obviously the pandemic has been very expensive for New Zealand as well as every other country.'s a lot of pressure on the New Zealand government to spend money everywhere

so the government has reviewed is currently reviewing the film subsidy regime with a focus on on talking about its financial sustainability because it is so so generous that so many productions are being attracted to New Zealand and if it continues to grow at the rate it's growing you know we'll be spending potentially billions of dollars a year on subsidising film productions. And it just, at a certain point, it just becomes financially unsustainable because it's great for the film industry.

It creates so many jobs. It creates an incredible industry in the country. The film industry is a great industry, but these companies don't really pay a lot of tax in New Zealand because obviously when the film is made, it's produced by an American company usually. And so Amazon will release it and Amazon will make money wherever Amazon is financially located, Ireland or somewhere probably, and they will pay tax in that country. Amazon won't pay a lot of tax in New Zealand. So these companies that are very heavily supported by the New Zealand taxpayer are not themselves paying pay a lot of tax in New Zealand. So, you know, these companies that are very heavily supported by the New Zealand taxpayer are not themselves paying a whole lot

of tax in New Zealand because they don't sell any products here. They make a product here. They don't sell it here. So those sorts of questions I brought to the fore. And, yeah, like the deal has soured. And the Hobbit laws at the time were very controversial. They have been slightly changed now. That was the incoming Jacinda Ardern government

tweaked the laws. They didn't totally change them, but essentially what the Hobbit law did was it made it possible for film workers to unionise and kind of treated film workers like Uber drivers, kind of Uber-style contractors with very little rights and very little say in things because industrial action from the New Zealand Actors Union threatened to move the production offshore.

Yeah, it makes a lot of sense what you're describing. And, you know, when you talk about, you know, New Zealanders seeing that these film crews were allowed in the Avatar film crew in particular, while, you know, loved ones and family members were not allowed into the country. You can certainly see how that's evocative, but then also seeing, you know, how one of the things that I believe you wrote in one of your pieces was how, you know, the avatar production being about this kind of fantasy indigenous culture gets

more funding than, you know, Maori filmmaking in New Zealand. Yeah. And that's like another thing, like there is, and that's, I mean, that's a really interesting thing that has come up over the development of New Zealand's film industry.

You know, in the early days, sort of what Lord of the Rings was 20 years ago now. And, you know, in the early days, it was cool that a New Zealander was making a Hollywood film in New Zealand with New Zealand cast and crew. I mean, you know, the principal cast were all foreigners, but, you know, a lot of the secondary cast were Kiwis, and that was cool.

Everyone loved that. There would be actors from popular soap operas in New Zealand who would appear in The Lord of the Rings, and people would love that because, you know, it was like being in on a joke that your favourite kind of soap opera doctor was playing an elf, right? I mean, Brett McKenzie from Flight of the Conchords was like an extra in Lord of the Rings.

And even now you sort of watch it and you laugh because you know that he's a joker and whatever, he's hilarious. But, you know, in Lord of the Rings, he's in the background looking all serious. But, you know, as time went on and the industry developed, there was always a question over the extent to which the Hollywood productions nurtured a domestic film industry. developed there was always a question over over the extent to which the hollywood productions nurtured a domestic film industry and then to some extent they did like a lot of

hollywood productions would provide massive incomes for new zealand domestic filmmakers so they could make a lot of money money working on hollywood films and then they'd go off and work on on something local uh and something you, related to New Zealand, which was great. So they kind of had a symbiotic relationship in that regard that the New Zealand local film industry was kind of propped up by Hollywood money. One day you'd be making a massive blockbuster and the next day you'd be making kind of a local production. But that, you know, as time went on, a bit of a rift kind of developed there where, you know, Hollywood productions got sort of special treatment and it's really hard to get money for a New Zealand film. Like, well, you have a very small film industry

and we've got other countries have a local kind of film commission funded by taxation or whatever that funds local productions. New Zealand does that too. We've got a film, we've got a government film commission which puts money into local films and funds local productions. New Zealand does that too. We've got a government film commission which puts money into local films and funds local films that have a local flavour, that talk about New Zealand stories and are made by New Zealanders. But the quantum of money that the government gives to New Zealand films

that are made by New Zealanders about New Zealanders, it's a fraction of the money that is given to these international productions. And there's a tension as well that the Film Commission is a part of the government that is responsible for administering these massive $100 million film subsidies. And it's responsible for attracting these massive companies from offshore to make their films in New Zealand. But it's also responsible for cultivating local talent and for funding local films and for effectively being like a studio for local filmmakers. And there's a sense that it can't kind of do both

at the same time. You can't on the one hand be dishing out hundreds of millions of dollars to Hollywood and cultivating relationships with Hollywood studios and also kind of working on the domestic industry as well. There's a sense that it's distracted by these massive Hollywood productions and perhaps not doing enough to nurture local talent. And that's possibly, you know, when the film commission looks at the kind of sums of money

that it looks at, you know, on the one side, you've got tens of hundreds of millions of dollars being spent every year on Hollywood productions and then tens of millions of dollars every year on New Zealand productions. And I think the allegation that it's a bit distracted by Hollywood is probably a fair one. Yeah, that rings true for me as well in seeing the debates that happen here in Canada about subsidizing and attracting all these Hollywood films and these big streaming companies and whether that really benefits the local industry. That's something that we deal with here too. So it's interesting to hear you talk about it in the New Zealand context.

I want to talk a bit more about, you know, another aspect of the deal that we were discussing was the degree to which the New Zealand government wanted to work with Amazon beyond Amazon Studios and actually, you know, these other parts of the companies and get benefits from that. I guess I have a couple questions on that front. Like, can you see any evidence that this strategy worked and that there was really much collaboration with Amazon in getting these, you know, other sectors of the business to look at New Zealand and look at doing business in New Zealand? And was there concern as well? And, you know, this is something I see in Canada as well, with the government not really caring so much because it's more about, you know, economic growth and attracting these companies, but concern with partnering with a company like Amazon, where, you know, there has been, I think, increasing scrutiny in recent years, you know, with their union busting practices and

how they treat their workers and these other impacts of their business model? It's hard to do a sort of counterfactual here because we had a previous relationship with Amazon Web Services, but certainly that relationship has deepened since the film series was filmed here. So it's hard to know whether or not, you know, what begat what. So Amazon Web Services has deepened its relationship with New Zealand. I think that the government's quite happy with that. They're obviously a big company, and it would be great if they set up locally here, and I'd hire New Zealand engineers to do work here.

But again, it's hard to know whether that would have happened anyway. And the other issue with the counterfactual is the series moves to the uk at the end of last year they announced they wouldn't be filming subsequent seasons in new zealand i think there are two reasons for that one of them was that even at the end of last year new zealand's border was still effectively closed and i don't think the film crew for the series was that excited about having to quarantine for two weeks whenever they sent people to New Zealand to film, which is fair enough. That's tough, doing two weeks in a hotel,

quarantining before being allowed out of the country, especially, you know, one imagines Hollywood film stars are not used to being locked in a hotel room for two weeks. One imagines they're not especially excited about that. So I think that was an issue. They didn't mention it at the time, but I think that it was an issue that at that point there did appear to be no end in sight to the amount of time, there did appear to be no end in sight to the length of time that New Zealand would have its borders effectively closed for the pandemic. So I think New Zealand's pandemic response possibly played into it.

The other thing that London and the UK have over New Zealand is just that it's so much closer to the United States and Europe where most of these actors are from and most of the cast and the crew are from as well. So I think it's just an easier place to get to. The UK is a nice place to be, so I think they just wanted to be there more than here, which is fair enough.

And I think Amazon Studios is also centralising a lot of its production in the UK, so it's part of a bigger deal to make a lot of TV in the UK as part of a massive effort to centralise its production in one place. New Zealand is just too small, I think, to produce that amount of television. The Lord of the Rings was great because it soaked up so much of New Zealand's production capacity,

but I think if Amazon wanted to film three, four, five TV programmes or films in New Zealand at the same time, that would have been impossible. So anyway, they left. And also because of the pandemic, the side part of the deal, which was to forge a relationship with other Amazon companies or other parts of the Amazon empire, that kind of never really happened to any great extent. So Amazon was meant to fly executives over. I'm not sure whether they would have ever flown Jeff Bezos.

It'd be interesting to know whether that would have ever happened. But they were told, they were asked to fly people over here as part of the deal. And obviously, because the borders were closed, that never properly happened either. So New Zealand really didn't get any of that part of the deal to any meaningful extent. I think anything that happened was over Zoom. So, yeah, it didn't as is

often the case with these deals it looked good on paper but it never really took off it will be interesting to see when the series comes out to what extent new zealand markets it as a film as a tourism kind of thing because i imagine new zealand's not keen to give it too much publicity given the fact that other seasons will be made in the UK, but obviously having spent so much money on subsidizing this thing, there's also, they will also, I imagine, want to make sure that people know that it was filmed here.

Yeah. Very much of two minds, right? On one hand, this is the last opportunity for, you know, New Zealand to really be the only place that is, you know, middle earth, so to speak. But then on the other hand, you know, New Zealand to really be the only place that is, you know,

Middle Earth, so to speak. But then on the other hand, you know, the company has taken this series out of the country and future seasons are not going to be filmed in New Zealand. So, you know, how much effort to put behind it. And I did want to pick up on that tourism piece because, you know, it was something that we were talking about earlier. And obviously, it's very key to the relationship that New Zealand has had with, you know, the works of Tolkien over these two decades since the original Lord of the Rings trilogy created by Peter Jackson. You know, for two decades, as I said, New Zealand has styled itself as Middle Earth and tourism campaigns to bring in a certain kind of traveler interested in the series. Is there an idea of how well this actually worked? Like, you know,

the benefit of having that association? And, you know, what does it mean now that the UK and potentially other countries will be able to make that same claim? I think there will always be an affection for New Zealand as the Lord of the Rings. New Zealand has done it very effectively. Tourism has always been quite big for New Zealand, and the government's very good at marketing the country in that way. The charm of the original trilogy is how much of it's practical effects and how much of it is just real beautiful locations.

They often splice two locations together in the camera. Digitally, it's not in the camera. But when you visit New Zealand, there are some locations that are recognisably very much from the films. And there are other locations where there's kind of a vibe, if you like, like it feels like the films, like you go to Rivendell, it's about an hour from where I live. And it's not recognisably Rivendell because so much of that was taking about four or five locations and putting them together. You don't step out of your car and think, oh my God, I'm here. But you do feel like you're in an otherworldly kind of place because that's just what this

country looks like. It's a very beautiful place to visit. And I think as the series went on, the Hobbit films, for instance instance were also made here but they're so digitally you know filmmaking now is just so um so heavily computer um assisted that you just you just don't watch the films and recognize your country and i just don't think that people come here and think oh i'm you know i'm going to see this part of the hobbit because you watch the hobbit and you just know that you're not looking at anywhere that's really real having watched the trailer for the amazon series it looks great it looks incredible but you don't watch it and you don't look at that trailer and think oh wow that's you know that's my country um because it just frankly doesn't look like my country and it doesn't look like

anyone's country i just think when they film it in the uk i'm not sure that people will watch the series and think wow this looks like england although i mean i could be wrong like game of thrones has been big for croatia and northern ireland and that you know there's quite a lot of cg in those tv show but you know the other things like i think quite can canally the person who owns the hobbit where they filmed hobbiton as part of the the deal for for reusing that location when they made the hobbit films they asked for the filmmakers to leave the set intact and so you can actually go to hobbiton now and his film set has been completely left there so it's beautiful like it is just like actually going to the film

and living in the film. So things like that, I think New Zealand has an advantage in because whatever Amazon does with the series, and I'm sure it will be very cool, I just don't think you can break that connection with the first trilogy, which is just so strong.

But that's possibly just me. But I don't think whatever the series does, I don't think you'll ever kind of top that affection particularly for a place like hobbiton you know you go there and you just if you like the lord of the rings and you know a lot of people love the lord of the rings you'd go there and and you just you feel like you're in the film and i think amazon and the uk would have to work quite hard to kind of um recreate Yeah, I think that makes a lot of sense. And, you know, you certainly do get that feeling when you do visit the Hobbiton set down there. And when I was last in New Zealand in 2019, just before the pandemic, like I feel like even then

when you saw the promotions for tourism and visiting sites that were used for filming, you know, in Middearth, so to speak, they were mainly about, you know, sites where The Lord of the Rings was filmed, not so much where The Hobbit was filmed, because so much of that happened on the sound stages. And I think also because there's less of a connection that people feel toward that series than, you know, the original one for many of the reasons that you're citing there. Bluntly, the Hobbit series wasn't as good. And the locations were just too digitally altered. A place like, you know the scene, the get off the road scene, that famous scene? That's in

the middle of Wellington, the capital. I used to actually be on my walk to work. I'd walk to work through that hilltop. And you can go there now totally just unchanged right like the actual tree was a fake tree but everything around it is just totally the same and it's incredible you go there and you get this eerie feeling that the black the ringwraith is just going to come riding along that that road and and if you love the films or the books to be able to go to that location and to feel that feeling is awesome. It's cool. It's so – and locations like that just – yeah, you can't kind of – the series will have to be pretty good to have scenes like that that are just so iconic, that are so evocative, and that are so tied to a particular location.

Like genuinely, I think that location in particular, plus Hobbiton, I guess, if you're into Lord of the Rings, it's kind plus hobbiton i guess is if you're into lord of the rings it's kind of worth the trip and like some people are so into lord of the rings they will travel from europe which is as far away from new zealand as you can get like it's so far away that you can fly via the us or you can fly via asia and it takes basically the same time to get here from europe doesn't matter which way around the world you travel. And people will fly all that distance just to see these locations. And it costs so much money and it takes so much time, but some people think it's worth it. So good for them. No, I think it's a completely

fair point. Let's see a couple final questions to wrap up our conversation. You know, you were talking about how there is this really generous film subsidy in New Zealand. And, you know, for Amazon to get this series started, it needed to spend a lot of money for that first season to, you know, build the world that it was going that this was going to take place in a lot of the props, the sets, all these sorts of things. So it costs extra money to put that first season together. Is there a feeling that Amazon, you know, a company whose annual revenue is something like double New Zealand's GDP, you know, really took advantage of New Zealand in the film subsidy and then, you know, left to go somewhere else for future seasons? Yes, there was a very strong sense of betrayal because, you know, I mean, the government went to the election in 2020 promising like a $130 million dental policy

for dental care. Dental care is not covered on the public health system in New Zealand. And Amazon, you know, clicked its fingers and got $160 million subsidy just like that, you know, and dental care in New Zealand for poor people is horrific uh and the richest company in the world owned by you know at points in 2020 you know jeff bezos was the richest person in the world clicked his fingers and got and got that money you know basically no questions asked like it was people were second um by the ease at which the government opened the checkbook for this production. And yes, the fact that it left didn't sit well, particularly, I mean, people don't think about these things too deeply,

but there were questions raised about the extent to which a lot of the IP for the series has been developed on the back of the New Zealand taxpayer, and then they get to take that IP and use it somewhere else. That's not great. There's bad blood. So yes, I think the answer to your question is yes. No, it makes perfect sense, right? And, you know, we've been talking about this kind of long relationship that New Zealand has had with Middle Earth and being associated with Middle Earth now for two decades, you

know, and also how there have been questions as to whether, you know, maybe New Zealand has been relying on this a bit too much or, you know, in some of the things I was reading in preparing for this, people suggesting that, like, should New Zealand really be tying itself to this property, as you were saying, that was developed in the UK rather than something that's like inherently domestic? Does, you know, disassociating from Tolkien at this point, you know, but does the series moving to a different country also grant, you know, New Zealand an opportunity to do something else or kind of reimagine its national identity in a sense? Yeah, I mean, I think this is a story that's so, you know, we're 20 years on from Lord of the Rings. I think the final,

The Return of the King was 2003. So next year will be 20 years since New Zealand kind of said goodbye to Lord of the Rings. Slowly, I think that the majority of people have moved from a sense of like great pride in the films to kind of being a wee bit, I mean, embarrassed possibly overdoes it, but, you know, a wee bit frustrated that in the 20 years since the Lord of the Rings,

people haven't really, well, the film industry hasn't kind of come up with something else to kind of associate with the country. Or people, people haven't really, well, the film industry hasn't kind of come up with something else to kind of associate with the country. And perhaps as well, I think the feeling is possibly directed offshore that there's a frustration that people offshore just kind of think of New Zealand as Lord of the Rings and then write us off when really there's so much more to this country. Like 5 million people live here.

We've got a great literary culture. You know, we write books every year. Hundreds of books are written in New Zealand. One New Zealand book won the Booker Prize nearly a decade ago. And that association was kind of, you know, it happened and then it didn't happen. And I don't think anyone around the world kind of associates New Zealand with that book in the way that they do with Lord of the Rings.

So I think a lot of people in New Zealand would kind of, there's still a sense of great pride that they're great films and they were made by New Zealanders and that's great. But yeah, I think people would love the opportunity to associate the country with something as well as Lord of the Rings. I don't think there's an appetite to kind of sever that relationship. And I think people would be quite upset if that relationship. And I think people would be quite upset if that relationship

actually disappeared. I think people would love the Lord of the Rings relationship to go on forever, but I think people would welcome the opportunity to add another string to the bow, as it were, and another kind of cultural something to kind of come up. I mean, we've had Light Lord. She's great, and people now associate us with her. So that's a positive.

But yeah, you know, I think people would welcome the opportunity for something alongside the Lord of the Rings. Yeah, it makes complete sense. And, you know, Lorde is great as well. This has been a really great conversation, Thomas.

I want to end with, you know, I guess a lighter question. And maybe we already got a hint at this when you were talking about The Hobbit and the series and things like that. You know, when it comes to the series that Amazon is releasing, is it something that you're interested in? Is it something that you'll be watching? Oh, definitely. Yeah. No, I mean, I was a kid when they were making The Lord of the Rings and they were making it in the city where I lived primarily.

So I loved it. i was so into it you know i camped out for all the red carpet premieres that i had you know and had the world premiere in wellington which was you know wellington never had the world premiere for a blockbuster film so i'm totally into the end of the series i think it's great um i didn't like the hobbit so much actually i thought you know it was just too sort of got the tone wrong i think but um i saw the trailer for the amazon's series the other day i thought it was just too sort of got the tone wrong, I think. But I saw the trailer for the Amazon series the other day. I thought it looked really cool. So, yeah, I'll be watching it. Completely fair.

And, you know, I'll say as well, I was young when The Lord of the Rings first came out. You know, also very into it. Didn't like The Hobbit so much. And I've been, as you were saying earlier you know i was skeptical on the amazon series and we'll still see what's going to happen with it but i feel like the most recent trailer made me feel you know maybe it won't be as bad as the hobbit yeah no the trailer looked like they got the tone right i don't know what peter jackson i just don't think what do not know what he was thinking with the hobbit and his something was going on there

but well it didn't was going on there but it didn't didn't quite land but yeah it looks like they've got the tone right so that's that's good i'm excited for it like as a piece of filmmaking i think it looks really good and i think the new zealand film industry i mean a lot of the reporting in new zealand focuses on like the ugly side of it which is the labor laws and subsidies and stuff but you know i think i feel i feel i feel really bad for the film industry because it's internationally the only way to compete in making movies is through subsidising. Then every country in the world that has a film industry has some subsidy regime. And it's kind of annoying, I imagine, for the industry to know that the only way that it can exist is through subsidies.

And I'm sure it'd actually probably like to stand on its its own two feet but it can't because none of these productions would come here without the subsidy regime it must be frustrating for them that they are dependent on the subsidy regime simply because if the new zealand government didn't um subsidize its films they would all go offshore and it's it's a it must be frustrating for them that films aren't attracted here purely because of the talent that we offer and i think new zealand's film industry is incredibly talented it is about tax deals which is you know it's a shame i think it's a sad thing for the film industry globally that it really is a race to the bottom in terms of these subsidies it's not about artistry or talent which it really should be yeah it's a sad state of the world that that is really what determines where a film production goes and

how things happen and you know i know, I'll be crossing my fingers that the series is good as well and just try to put aside while I'm watching it the company that is actually behind it. And, you know, looking forward to seeing some great New Zealand scenery while I'm watching as well. Thomas, it's been great to speak with you. Thank you so much for taking the time.

No worries. Thanks for having me on. Thomas Coughlin is a senior political reporter at the New Zealand Herald. You can follow him on Twitter at C-O-U-G-H-L-T-H-O-M. You can follow me and at Paris Marks and you can follow the show and at Tech Won't Save Us. Tech Won't Save Us is produced by Eric Wickham and is part of the Harbinger Media Network. If you want to support the work that goes into making the show every week, you can go to patreon.com slash tech won't save us and become a supporter. Thanks for listening. Thank you.