Economic Development Minister Stuart Nash is "disappointed" after Amazon confirmed the second season of its Lord of the Rings production will be shifted to the UK.
The much-hyped first season of the Lord of the Rings TV show, which was filmed in New Zealand, will premiere on September 2, 2022 via Amazon's Prime Video streaming service.
But despite the Government giving Amazon a more than $100 million boost to film the series in New Zealand, the US e-commerce giant's TV arm confirmed it will shift production of future seasons to the UK.
"The Government was informed of the decision yesterday," Nash said in a statement on Friday, with a note that he was "disappointed" by the decision.
"Amazon Studios advised that post-production work on season one will continue in New Zealand till June 2022. However season two will be filmed in the UK as part of a strategy by the studio to expand its production space and consolidate its footprint in the UK," Nash said.
"I am enormously proud of the New Zealand screen sector. The Amazon Studios' decision in no way reflects the capabilities of our local film industry or the talents of the people who work in it. This is a multi-national company that has made a commercial choice.
"With season one, the New Zealand screen sector has proven its reputation for offering a world-class workforce, globally competitive sound stages and post-production facilities, and a safe destination with outstanding scenery and friendly and welcoming people."
Amazon announced in September 2019 it would be locating its production in New Zealand. The series, which began production in Auckland in early 2020, will be over multiple seasons, and will explore new storylines that occur before the films.
A Memorandum of Understanding (MoU) between the Government and Amazon announced in March last year secured multi-year economic and tourism benefits to New Zealand, outside the screen production itself, in exchange for expanded Screen Production Grants.
Nash has confirmed the MoU with Amazon Studios will no longer proceed in its current form. The 5 percent incentive previously offered on top of the standard 20 percent rebate for all international film productions is withdrawn.
"As with every other international production, Amazon Studios is eligible for a 20 per cent rebate on its qualifying production expenditure in this country, under the terms of the International Screen Production Grant," Nash said.
"It is estimated that Amazon Studios' qualifying local expenditure totals around NZ$663.74 million so it could potentially be eligible for a NZ$132 million rebate under the 20 percent rule.
"The international film sector is incredibly competitive and highly mobile. We have no regrets about giving this production our best shot with government support. However we are disappointed for the local screen industry.
"Work will continue across government on ways to keep supporting the sector."
Amazon Studios Vice President and co-head of TV Vernon Sanders thanked the Government and people of New Zealand "for their hospitality and dedication and for providing The Lord of the Rings series with an incredible place to begin this epic journey".
He confirmed the company "do not intend to actively pursue the season one MoU 5 percent financial uplift with the New Zealand Government or preserve the terms around that agreement".
The TV series is set thousands of years before the events of J.R.R. Tolkien’s The Hobbit and The Lord of the Rings books, and "follows an ensemble cast of characters, both familiar and new, as they confront the long-feared re-emergence of evil to Middle-earth".