Is Amazon’s Lord of the Rings series lost FDI for Ireland?

It is perhaps not the greatest of screen industry plot twists that Amazon's $1 billion Lord of the Rings project is to be filmed in New Zealand. Other locations couldn't match its offer to the streaming giant, and some may not have tried.

Anyone for a multi-year production behemoth set to capture the feverish attention of a global audience? It seems Kiwi hands went up faster than their rivals in other markets. Jacinda Ardern’s government ultimately saw Amazon’s venture as a grand slab of foreign direct investment that was theirs to lose.

"Very high-level talks" made sure they didn't lose it. The other frontrunner, Scotland, and every other country that visualised the appeal of this multi-year business, did.

For Amazon, this Lord of the Rings prequel is a market landgrab. The streamer paid a reported $250 million (€227 million) for the rights and its Amazon Studios division is expected to spend at least four times that sum producing a series that will have a 20-episode first-season, and run for at least five.

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This is not a new adaptation of the JRR Tolkien novels, but an extended shading-in of an earlier period of Middle-earth that a Tolkien fansite tells me lasted for a mere 3,441 years. My prediction is that it will go heavy on a climate change angle, boast more female characters than all past Tolkien adaptations combined, but contain considerably fewer jokes than Game of Thrones. Either way, its job is to send Amazon Prime Video's subscriber numbers soaring and wage unholy war against the likes of Netflix or Disney.

The showrunners declared last week that they had been searching for “somewhere majestic, with pristine coasts, forests and mountains” to create the “primordial beauty” of the Second Age of Middle-earth, as well as somewhere that was also “home to world-class sets, studios, and highly-skilled and experienced craftspeople and other staff”.

Certainly, it’s true that New Zealand is spectacular without CGI and has a unique track record when it comes to crafting the world of elves, orcs and hobbits. And yet other countries, closer to home, have also been known to fancy the screen-friendly majesty of their landscapes. It’s hard to see how the exact height of the mountain could be the deal-breaker for financiers. Could it be that New Zealand was Lord of the Incentives?

Screen tourism

For sure, it was the country with the clearest stake in this quest, having built up a formidable screen tourism enterprise since the early Noughties on the back of the six New Line Cinema/Warner Bros film adaptations of Lord of the Rings and Tolkien's The Hobbit made there by Kiwi director Peter Jackson.

After flying Air New Zealand –"the official airline" to Middle-earth – at the height of this movie mania in 2004, I've occasionally wondered since if Auckland takeaway outlet Lord of the Kebabs stuck with that name over the years, or if everybody in New Zealand eventually grew heartily sick of all things Tolkienesque. A decade of terrible Gollum impressions would surely be toxic for morale.

Indeed, few in the industry were impressed by the anti-union “Hobbit law” that was passed by the former New Zealand government in 2010 to prevent film industry workers going on strike, thereby avoiding a threatened relocation of the Hobbit films after a union dispute. And some now say the Ardern administration is promising too much for the honour of hosting Amazon.

International productions based in the country are able to avail of a grant of 20 per cent of qualifying local expenditure, plus a possible 5 per cent uplift if the production is found to offer significant economic benefits.

On rates alone, this doesn’t sound like the most generous scheme, but by not having a cap on eligible expenditure, New Zealand goes all out in its bid for the bigger-budget productions. The upshot is that Jeff Bezos’s company is in line for a subsidy of at least 20 per cent on every cent it spends there on Lord of the Rings, or a possible NZ $300 million (€172 million), according to the New Zealand Herald. It’s easy to see how taxpayers might be unhappy with this “corporate welfare”.

Economic benefits

At the same time, Ardern’s government has run the numbers and concluded that the economic benefits of drawing Lord of the Rings to New Zealand will outweigh the outlay it believed was necessary to win.

If it is a win, it’s a win of some scale. Amazon’s big play is expected to be the most expensive television series in history. On that basis alone, its location decisions shouldn’t slip by unnoticed by fans of inward investment and their spin-off effects.

Could Ireland, no stranger to corporate incentives, pull in this kind of business? Does it want to? The Brexit uncertainty that reportedly derailed Scotland's chances of stealing the Middle-earth crown won't be helpful for any cross-Border industry alliances either. But industry insiders have also argued in recent years that the Republic needs a couple more studios with large soundstages to truly compete, and that the per-project cap of €70 million in eligible expenditure dents the attractiveness of the section 481 tax credit for the more extravagant productions out there.

For now, it’s a case of saying good luck New Zealand, and to the Amazons of this world, oh, but please do think of us for your next multimillion fantasy television event.