NZ Government giving Amazon over $100m boost for Lord of the Rings filming

A deal to boost the local economy has been struck between the government and the global giant Amazon.

The company is currently filming a Lord of the Rings TV series in New Zealand.

Under a Memorandum of Understanding Amazon will get an extra 5 percent from the Screen Production Grant in addition to the 20 percent grant the production already qualifies for.

Amazon plans to spend about $650 million on season one of the show meaning it would be eligible for a rebate of over $160m.

Minister for Economic Development and Tourism Stuart Nash told Morning Report the deal secured multi-year benefits to New Zealand and the subsidy was well worth it.

"This is fantastic, it really is," Nash said.

However he couldn't say exactly how much money would be spent, citing confidentiality, but did confirm it is over $100 million.

"But what I can tell you is Amazon is going to spend about $650 million in season one alone," he said.

Nash said the amount Amazon would receive is not more than what any other international company would be eligible for if they met the tests.

"I think what we have got out of Amazon in terms of the MOU and the industry and how we're going to train people and our ability to use footage for tourism, the ability to leverage off a lot of what Amazon is doing, is fantastic."

"The bottom line is if we want a film industry in this country, part and parcel of that is government subsidies.

"Where's the downside?"

Two Memoranda of Understanding (MOU) were signed in December 2020 following negotiations between Amazon and the New Zealand Film Commission, Tourism New Zealand and the Ministry of Business, Innovation and Employment.

An overarching MOU was signed to establish the key principles and obligations under the 5 percent uplift, and a season one-specific MOU is also in place.

Subsequent season MOUs would be negotiated for each future season.

The MOU has three parts, with Tourism New Zealand taking the lead on branding.

"This provides the opportunity for New Zealand to strengthen its international brand, with a campaign to promote New Zealand as the 'Home of the Lord of the Rings' 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," the document said.

The second part, lead by the Film Commission, included Amazon working with the commission 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 'The Lord of the Rings' production, workshops, and masterclasses. The placement and internships are underway."

Finally, it allowed New Zealand firms to leverage off of Amazon's innovation capabilities.

"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 the specific R&D focus areas, and the parties agree to work together to explore additional or alternative opportunities as they may arise."

Nash said the deal with Amazon was not linked to rumours of a retail distribution centre being set up locally and this was a different part of the business.

"People can go online and buy something from Amazon... I don't think them having a distribution centre here would make any difference to whether people went online or not."