Want Blockbuster FX? Head to New Zealand

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REUTERS/Anthony Phelps

A scale model of the ship "Venture" on the set of Peter Jackson's remake of King Kong at his Stone Street studio in Wellington, New Zealand, in 2004

When Warner Bros contemplated moving production of Lord of the Rings two-film prequel The Hobbit out of New Zealand, owing to a protracted dispute with trade union Actors Equity, Prime Minister John Key intervened personally. At stake was the country's long connection with the Rings franchise — an association that has been a great boon for in-bound tourism — and the 2500 jobs that the estimated $490 million production of The Hobbit would create. There was thus relief in Wellington when filming finally began last month, with actors and Warner Bros mollified by labor law reform and tax breaks respectively. Hamstrung by the cost of two major earthquakes (estimated at $11 billion), New Zealand needs all the investment that its movie industry can bring.

The country's famously scenic locations are a big draw for Hollywood filmmakers — but they're not the only one. New Zealand's Large Budget Screen Production Grant offers a 15% rebate on production expenditure. The producers of Avatar, large portions of which were filmed in Wellington's Stone Street Studios, received $32 million from the grant (in return, the country earned an estimated $307 million in revenue). Since the scheme began in 2003, overseas productions have reportedly spent $1.42 billion in New Zealand, and received $189.4 million in grants. The absence of fringe taxes that would be incurred in the U.S. — such as imposts on employee benefits, payroll and other levies — also helps reduce overall postproduction cost.

Then there's New Zealand's innovative visual effects (VFX) industry, which, though less than a decade old is now becoming a major player, contributing around $180 million in film revenues in 2006-07 alone, according to a Department of Statistics survey. Companies like Wellington's Weta Digital, which garnered three Oscars for its work on Avatar, and which will be working on both Hobbit movies, are winning international plaudits for their work in special effects, art direction and cinematography. "There seems to be a unique creative sensibility here in New Zealand, in both the artistic and technical sense, and Weta Digital certainly sets that standard," says Gisella Carr, Film New Zealand's chief executive.

The Rings franchise has been a huge impetus to the development of the local VFX industry, according to Mike Horgan, general manager of Digipost, the first digital postproduction company in New Zealand when it was established in 1990. "The world has always had one-eye on the New Zealand film industry, through projects such as Xena, Hercules and more recently Spartacus, but [Rings director] Sir Peter Jackson has certainly played a huge part in placing the industry on the map," he says.

As well as Weta, companies like Park Road Post Production will benefit from Jackson's business. The Wellington-based outfit is a one-stop shop, offering a sound department, digital conversion facilities and film processing laboratories. "The Hobbit has just started production at the studios here," says Vicki Jackways, Park Road's head of marketing.

Although there is some international hiring, this technology intensive industry is mainly driven by local talent. "The majority of our artists are from New Zealand and are very experienced and highly qualified to deliver at high international standards," says Cris Casares, a VFX producer for production house Images and Sound. Horgan agrees: "There are a number of very good training institutions operating here which help to nurture and develop young creative minds," he says. Hopefully, the recent accord struck between Warner Bros, Actors Equity and the government will form a framework that will help keep this fledgling industry on track.