DB here:

We’ve said several times that this website is an ongoing experiment. We started just by posting my CV and essays supplementing my books. Then came blogs. We quickly added illustrations to our entries, mostly  frame enlargements and grabs. Eventually, video crept in. In 2011 we ran Tim Smith’s dissection of eye-scanning in There Will Be Blood. Last year, in coordination with our new edition of Film Art: An Introduction, we added online clips-plus-commentary (an example is on Criterion’s YouTube channel), and near the end of the year Erik Gunneson and I mounted a video essay on techniques of constructive editing.

Today something new has been added. I’ve decided to retire some of the lectures I take on the road, and I’ll put them up as video lectures. They’re sort of Net substitutes for my show-and-tells about aspects of film that interest me. The first is called “How Motion Pictures Became the Movies,” and it’s devoted to what is for me the crucial period 1908-1920. It quickly surveys what was going on in cinema over those years before zeroing in on the key stylistic developments we’ve often written about here: the emergence of continuity editing and the brief but brilliant exploration of tableau staging.

The lecture isn’t a record of me pacing around talking. Rather, it’s a PowerPoint presentation that runs as a video, with my scratchy voice-over. I didn’t write a text, but rather talked it through as if I were presenting it live. It nakedly exposes my mannerisms and bad habits, but I hope they don’t get in the way of your enjoyment.

“How Motion Pictures Became the Movies” is designed for general audiences. I’ve built in comments for specialists too, in particular, some indications of different research approaches to understanding this period of change.

The talk runs just under 70 minutes, and it’s suitable for use in classes if people are inclined. I think it might be helpful in surveys of film history, courses on silent cinema, and courses on film analysis. If a teacher wants to break it into two parts, there’s a natural stopping point around the 35-minute mark.

Some slides have several images laid out comic-strip fashion, so the presentation plays best on a midsize display, like a desktop or biggish laptop. A couple of tests suggest that it looks okay projected for a group, but the instructor planning to screen it for a class should experiment first.

I plan to put up other lectures in a similar format, with HD capabilities. Next up is probably a talk about the aesthetics of early CinemaScope. I’d then like to spin off this current one and offer three 30-minute ones that go into more depth on developments in the 1910s.

The video is available at the bottom of this entry, but it’s also available on this page. There I provide a bibliography of the sources I mention in the course of the talk, as well as links to relevant blogs and essays elsewhere on the site.

If you find this interesting or worthwhile, please let your friends know about it. I don’t do Twitter or Facebook, but Kristin participates in the latter, and we can monitor tweets. Thanks to Erik for his dedication to this most recent task, and to all our readers for their support over the years.

Hou Hsiao-hsien oversees set details for The Assassin.

DB here:

For many years now, contemporary Chinese cinema has found success with costume action pictures like Red Cliff and Painted Skin: The Resurrection. Even prestige arthouse directors got into the act. Ang Lee’s Crouching Tiger, Hidden Dragon (2000) and Zhang Yimou’s Hero (2002) made the popular wuxia (martial chivalry) film respectable, and now we’re about to see several more examples.

Wong Kar-wai, who already found festival and arthouse recognition with Ashes of Time (1994) is (apparently) finally finishing The Grandmaster, a tale centered on Bruce Lee’s teacher Ip Man. Jia Zhang-ke, whose demanding, slowly-paced films Platform and The World got scant distribution in the US, is making a wuxia. Even more surprising is the fact that Hou Hsiao-hsien, master of the gradually unfolding long take, has turned his attention to martial arts. The Assassin, Hou’s first film in several years, is currently shooting in Taiwan.

James Udden is the author of the most comprehensive and authoritative book on Hou, No Man an Island: The Cinema of Hou Hsiao-hsien. For that project he interviewed Hou many times. Jim’s new project, a historical study of how Taiwanese and Iranian cinema became central to world film culture, compelled him to revisit Hou in December. “Hou’s screenwriter, Chu Tian-wen, informed me that if any interview were to happen before I left, it would have to happen on the set itself — if I did not mind. How could I refuse?” Jim has kindly chronicled his visit in the guest blog below, one mixing information with the unabashed admiration of the true fan.

 

Hou after Hu

Made in Taiwan: A Touch of Zen (King Hu, 1971).

“The first day of a costume picture always goes like this,” Hou Hsiao-hsien remarked to me. It was Assassin’s first day of shooting in Taiwan. The actors had been on call for make-up since 6:30 am were ready to go by 8:00. Now it was late in the morning and the camera had yet to roll. Slowly some of the actors made their way from the dressing into the open air, lounging around in their Tang-dynasty garb, waiting. Shu Qi, the Taiwanese star who launched her career in Hong Kong and has now gained wide exposure (If You Are the One, Millennium Mambo, The Transporter), is among Hou’s cast, and she walked onto the set briefly to inspect something.

Hou made it sound like he had done all this before. And it’s true that he has been at his best with historical material, not contemporary subject matter. Yet never before has Hou gone this far back into the past. Flowers of Shanghai was set in the late 19th century, but this film is set in the 9th century during the Tang dynasty, generally considered the peak of Chinese civilization.

More striking, The Assassin is a wuxia film. The outstanding figure in this genre’s rich history was King Hu, who revolutionized the wuxia in the 1960s and 1970s. A mainland émigré director who began directing in Hong Kong, Hu shot his best work in Taiwan and is a towering figure in that nation’s film history.  He was known for his passionate authenticity in costume and settings, but also for his eccentric editing techniques, sometimes involving shots that last a mere fraction of a second.

Hou seeks authenticity no less fervently than Hu, but in terms of editing, he has been the older director’s polar opposite. A cut is rare in any Hou film. Often the shots last on average well over a minute, with Flowers of Shanghai averaging close to three minutes per shot. A year ago I asked Hou if the wuxia tradition would force him to abandon his signature long take. His answer was typical: “ I won’t know the answer to that until I actually get on the set.”

That’s where my visit came in. Hou and his crew had just returned from shooting scenes in mainland China. Now they were starting to film on the lot of the Central Motion Picture Corporation, the government-sponsored production facility that had given birth to the Taiwanese New Cinema of the 1980s.

Many know Hou’s work best through Café Lumière (2003) and The Flight of the Red Balloon (2008), both of which got fairly wide distribution in the West. However, Hou’s lasting reputation as a master is built largely on two things: the remarkable string of films he made in the 1980s as part of the Taiwanese New Cinema trend, and his later works that delve into the historical past, most of all City of Sadness (1989), The Puppetmaster (1993) and Flowers of Shanghai (1998). In these films, Hou explored the subtleties and complexities of mise-en-scène to an extent almost without parallel save for Kenji Mizoguchi. He also explored historical issues in ways almost without precedent. City of Sadness, in particular, gave a human face to a period of Taiwanese history that had long been kept in darkness.

How, through what concrete production decisions, did Hou achieve his lingering, riveting scenes—solemn long takes capturing the textures and tempos of the past? My 2009 book had to rely on secondary reports and my interviews with Hou and his collaborators. Now for the first time, I could observe firsthand.

Admittedly, during my visit I got only a snapshot of the production process. After a prolonged period of financing and preproduction, The Assassin will be shot over several months in China, Taiwan and Japan. According to Hou’s team, it will not be released until 2014. Still, two days on a set did confirm some things about Hou’s creative process, while also leaving some lingering hints of what this major project will be like.

 

Meticulous mise-en-scène

Sound designer Tu Tu-chih and director of photography Mark Lee Ping-bin.

In my book on Hou, I argued that only in Taiwan could Hou have had the career he had. This is not merely due to the particular set of historical circumstances and institutional pressures and opportunities. It is also because he was fortunate to find a creative team that has sustained his vision.

Prominent members include Mark Lee Ping-bin, the director of photography, and Tu Tu-chih, the sound designer. For Lee and Tu, shooting on the CMPC lot must have seemed like a homecoming, since both had learned their craft at this same studio in the early 1980s. Since then they have become arguably among the best of their respective fields in Asia, if not the world. Then there’s the remarkable production designer, Huang Wen-ying, who has worked with Hou since 1995 and who also is Hou’s main producer. For her this is clearly a dream project. Seeing this calm, soft-spoken yet efficient crew at work in tandem was unforgettable: they seemed to be working hard and meditating at the same time.

Years ago Hou said in an interview that perhaps he is too meticulous when it comes to mise-en-scène. This clearly has not changed. On the first day the camera was not yet on the set. Overheard snippets of Hou’s extended discussions with Huang Wen-ying, Mark Lee and others, gave the impression initially that he was going to shoot an interior scene one way, then another, only by the end of the evening to lead me to believe it had changed once again. Then on the second day, the first day of actual shooting, I returned in the morning to discover that the scene was covered from yet another angle.

Throughout that morning, that single setup underwent three more metamorphoses. Hou and his colleagues tinkered with the set and props so extensively that they broke for lunch before actually shooting — this despite the actors all being on call since around 6:30 am. Not bounded by the union rules typical on a Hollywood set, Hou at times was directly involved in adjusting several minute details. Hou is as meticulous as ever.

Hou never uses storyboards or shot lists. He does not even write out dialogue beforehand for the actors. His scenes have always grown out of the specifics of a setting—usually real locations that spark his imaginative staging and lighting. His modus operandi is to then respond directly to the atmosphere he finds himself in, no matter how long that takes. Everybody who works for him seems to understand this.

Now he had plenty of atmosphere to inspire him. Since original Tang-dynasty buildings are difficult to come by, two large, full-scale structures were being erected from scratch. These were solid buildings that I suspect will be worth a lot of money someday, and they were so large that the CMPC lot could barely contain them.

In the building that was finished, what struck me was the craftsmanship. From the hardwood floors to the intricate slatted, lattice room dividers, the woodwork in the finished structure was immaculate down to the details. Even the tiniest props, including flowers, were real, and breathtaking. Nearby in the production office was evidence of the exhaustive historical research behind this. Drawings and blueprints were to be found among hundreds of over-sized books on Chinese art and architecture.

Although the intricate sets for Flowers of Shanghai had been made in Taiwan in the later 1990s, Huang Wen-ying hired Vietnamese woodworkers to craft them. She claimed they would give slight “French” flavor to the set, evoking a strain of Chinese architecture particular to a foreign concession. I asked if this was the case this time. She laughed, “No, this time it is all ‘Made in Taiwan.’” I sensed some real pride in that statement, and for good reason.

Here lies the answer why this project has taken so long. Last year in Japan, Hou told me that some constraints were financial. The budget, currently reported at between US$12 and 14.5 million, had to be raised from various sources. Above all, though, it took time for Hou’s team to master all of the period details of the Tang dynasty. When it comes to mise-en-scène, no stone is left unturned. In fact, just about every stone, and everything else, is at some point toyed with by Hou himself.

 

Brushwork, not ballpoint

Crew and Hou with producer and production designer Huang Wen-ying.

Lighting is often the most time-consuming aspect of a film shoot, and you’d expect it to be particularly prolonged on a Hou project. Anyone who has seen either The Puppetmaster or Flowers of Shanghai on the big screen knows the supple gradations of light and shadows typical of a Hou shot. Yet back in 2005, Huang Wen-ying told me that Mark Lee works rather quickly to set up his lighting schemes. I found that almost incredible. Now I know it’s true.

Of all the changes that occurred on the first morning of actual shooting I saw, very few involved the lighting. The illumination was pretty much all set up by the time I arrived around 8:30. Over the course of the morning, only one lighting instrument was added, another was adjusted slightly, and a flag was added to one side.

For the most part Lee had to consult the continuity person about all the subtle changes occurring on the set. Over the course of the morning, Hou and crew dramatically changed the backgrounds of the shot. They hung a new gossamer cloth, added a folding screen revamped with gold leaf, and hoisted a leafless tree that would be visible in the distance. In the picture below you can see the second building under construction.

Lee would observe all these changes and would then confer with Hou as to how things would look on camera. At one point Lee was crouched with the continuity person, pointing at some detail for her to examine from a particular angle. She jotted points down in her large notebook.

In all his films for Hou, Lee’s exceptionally low lighting levels and deep, layered shadow areas would give even Gordon Willis a run for his money. Lee’s subtle lighting has always registered magnificently on film. Accordingly, The Assassin is being shot entirely on Kodak stock, even though digital would be somewhat cheaper.  “To shoot on digital instead of film stock,” Lee explains, “is like being asked to paint with a ball-point pen instead of a brush.” No digital work will be done until post-production. I suspect that so long as there is some film stock to be found anywhere, at whatever cost, a Hou film will use it.

 

Back to basics?

Now that Hou has been on the set, what clues do we have to the result? What will a Hou wuxia film look like?

It’s of course too soon to say, but I did see signs that Hou wants to return to basics. Up to 1993 he notoriously executed long takes with little to no camera movement. Since then his camera has become very mobile — perhaps most notably in the endlessly arcing camera of Flowers of Shanghai. But what I saw in the Assassin shoot was a camera set only on a tripod, not a dolly, and placed at a considerable distance. The arrangement didn’t permit any movements except perhaps some pans or tilts for reframing.

I venture this guess: this will be a Hou film first, and a wuxia film a distant second. It will likely be a wuxia film unlike any other.

On that second day, I had to bid my goodbye to Hou before he had even started shooting. It should have been disappointing to not actually see Hou say “action” or “cut.” Yet this could not be further from the truth. First, I did get my interview late on the first day, fittingly on the CMPC lot. Second, I saw and heard much more than I could have ever expected. When I left America for Taipei, the prospect of being on Hou’s set was the furthest thing from my mind. I came home feeling like the luckiest guy in the world.

---

More background on Hou’s Assassin project can be found at Film Business Asia and Screen Daily. I discuss principles of Hou’s staging in Chapter 5 of Figures Traced in Light and on this site, in a supplementary essay on his early work and in this blog entry.

Our previous guest post was Tim Smith’s perennially popular “Watching you watch THERE WILL BE BLOOD.”

Hou Hsiao-hsien, James Udden, and Hou’s screenwriter and long-time collaborator Chu Tian-wen; Japan, 2011.

P. S. 7 January 2013: Wong Kar-wai’s The Grandmaster made its censorship deadline and was screened in Beijing. Thanks to Ray Pride and Movie City News curated headlines for the link.

P. P. S. 8 January 2013: James Marsh has a rapturous early review of The Grandmaster at twitchfilm.

P. P. S. 8 January 2013, later: Maggie Lee provides an equally enthralled review in Variety.

P.P.P.S. 16 January 2014: Shooting on The Assassin is said to be wrapped. See Stephen Cremin at Film Business Asia.

 

Kristin here:

The Cannes Film Festival continues even as I type. Much of the wheeling and dealing at the market that accompanies the festival is being driven by two franchises that few people outside the film industry think of as independent films: the Twilight and Hunger Games series. Indie blockbuster franchises aren’t common. In fact, there had previously been only one, but its parallels to these contemporary franchises reflect a recent major shift in international independent distribution.

True or false, The Lord of the Rings is an indie film

In May of 2001, I, as a Tolkien fan since high school, was resolutely ignoring the production of a film adaptation of The Lord of the Rings, going on in New Zealand. The first part of the trilogy was to be released in December, and there was widespread skepticism in the press, both popular and trade, and among fans and industry insiders concerning the possibility of the film’s being a success. Another fantasy adaptation, Harry Potter and the Sorcerer’s Stone, looked likely to be the hit of the Christmas season, eclipsing New Line Cinema’s expensive gamble.

Then came New Line’s Cannes event of 2001. Over a three-day weekend, the studio presented an elaborate program to reveal the film. On Friday night there was a screening of a 26-minute preview of footage from all three films, with an extended portion of the Mines of Moria scene in nearly completed form as its centerpiece. Even cast and crew members present, as well as top New Line officials, had not yet seen any of the film’s finished footage until that screening, and they were overwhelmed. Jaded reporters cheered and asked to have the preview re-run. Extra screenings had to be arranged. A series of press interviews were held, and a lavish party complete with sets and props from the film was held in a chateau. Suddenly the popular press was full of infotainment pieces predicting that the trilogy would be a blockbuster hit. Fan webmasters invited to the event posted enthusiastic, even ecstatic reports.

Variety’s report of the preview screening is the first article about the film that I remember reading. It began:

It’s hard to imagine a more relieved group of distribs gathered into one place than the collection who’d just finished watching a 26-minute film from New Zealand that cost $270 million.

The enthusiastic response from distribs, exhibs and worldwide press to the screening of footage from New Line’s “Lord of the Rings” at Cannes Olympia theater means that foreign companies that bet the farm on the three-year franchise now have cause for confidence they’ll recoup their investment–with coin to spare. […]

In marketing meetings after the screenings, NL execs told distribs that the target is for all of them to outdo the previous top grosser in their territory. In some countries, that’s going to mean spending as much again on P&A [prints and advertising] as they did to buy the films in the first place, but at least now that seems more like an opportunity than a terrifying risk.

Rolf Mittweg, at the time head of New Line’s international marketing and distribution, noted: “My Japanese distributor said he had a knot in his stomach for the whole year, and now it has dissolved.” [Adam Dawtrey, “Will ‘Lord’ ring New Line’s bell?” 21-27 May 2001, pp. 1, 66.]

This considerably intrigued me, and it was probably the first step in the long path that ended with me writing The Frodo Franchise: The Lord of the Rings and Modern Hollywood.

What Variety was referring to, it turned out, was the twenty-six independent distributors from various territories around the world who were forced by New Line, if they wanted LOTR, to pay large sums up front for the film, sight unseen. That in itself wasn’t odd, since independent films were commonly financed in part by pre-sales to international distributors, often on the basis of a script or a star attached to the project. The difference here was that the chosen twenty-six had to pay a lot (as much as $8 million for the larger European territories) for all three feature-length parts of the film. If the first one flopped, the second and third would be almost worthless. Small wonder they were nervous going into the Cannes event.

As everyone knows, LOTR went on to enormous success, with the third installment becoming only the second film to cross a billion dollars in worldwide grosses (the first having been Titanic in 1997).

Many people would be surprised to learn, however, that LOTR was not the product of one of the major Hollywood studios. It came from an independent company, New Line. True, New Line was at that point owned by Time Warner, but it operated as an independent film producer-distributor. That is, it didn’t receive financing for its films from its parent company but through pre-sales–pretty much the definition of an indie establishment. It was also a studio that thrived in part because it stressed franchises, notably the Nightmare on Elm Street, Teenage Mutant Ninja Turtles, Rush Hour, and Austin Powers films. Successful though these were, LOTR was a step up for New Line, both in terms of prestige and budget. It was perhaps the first indie blockbuster franchise.

It was such a blockbuster, in fact, that LOTR helped pull the international independent and foreign-language film market out of a major slump that had begun in mid-2000 in the wake of over-production in the late 1990s. The crises in the Brazilian and Argentinian economies in 1999, the bursting of the dotcom bubble in mid-2000, and the 9/11 attacks in 2001 worsened the decline. I won’t go into detail here. (You can read a more thorough account in Chapter 9 of my book.) Suffice to say that the crisis happened to be at its worst when The Fellowship of the Ring came out in mid-December, 2001. During the first half of 2002, there were slight signs of a recovery, but the accumulating income from the film and also from the summer release of the DVD strengthened it considerably. By the time of the American Film Market in early 2003, The Hollywood Reporter ran the caricature above and declared, “With his quest to save Middle-earth from the Dark Lord, the intrepid hobbit might have helped rescue the annual event from the clutches of a global recession.”

As a result, the lucky 26 distributors were able to buy more at the AFM and other important indie sales venues. Reporting from Cannes, Variety declared, “The global bonanzas of ‘Lord of the Rings’ is playing its part in driving big-budget pre-sales.” Screen International said New Line was “buoying the indie market with The Lord of the Rings.” Sales and pre-sales of indie films were up. Small companies could afford to buy more desirable films than in the past. For example, SF Film in Denmark (a branch of Sweden’s AB Svenska Filmindustri) was able to acquire Million-Dollar Baby, a film that previously would have been beyond its means. A few of these companies also used their LOTR money to produce local films or to open art-house cinemas.

The problem was, the film had only three parts. New Line’s next attempt at a blockbuster franchise would knock the biggest supplier of indie films to foreign distributors entirely out of the market.

The New Line void

On December 7, 2007, The Golden Compass was released, the first in an intended trilogy based on the “His Dark Materials,” a trio of prize-winning books by another English author, Philip Pullman. With a reported production budget of $180 million, the film grossed about $70 domestically, though it managed $372 million worldwide.

On March 28, 2008, four years and four weeks after The Return of the King won eleven Oscars, Time Warner announced that New Line would be absorbed into Warner Bros. Entertainment as a genre unit. Its domestic distribution and international sales activities would be dissolved. The top executives of the international sales wing, Rolf Mittweg and Camela Galano, who had helped put together the enormously complex group of foreign distributors who largely financed LOTR, would soon be out of jobs. The fact that the change came less than two months before the Cannes Film Festival led trade papers to assess New Line’s importance as a supplier to the international independent market and to speculate on what companies might step into the void left by its departure.

(For my own analysis of what the loss of New Line product would mean for the indie market, see “Filling the New Line gap,” from November 6, 2008.)

Shortly after the March announcement, Screen International editor Mike Goodridge looked back at the impact of Peter Jackson’s trilogy on the distributors who released it abroad:

The success of the three films for the international partners cannot be overestimated. Nor can the fact they, more than anybody involved, took a huge risk on the trilogy. The risk paid off. The Greens at Entertainment [UK distributor], the Hadidas at Metropolitan [French distributor] and others genuinely shared in the profits of one of the box-office phenomenons of of the last 20 years. It was the international buyers’ dream. Instead of losing money on studio cast-offs, they had a hefty piece of a trilogy which grossed nearly $2bn outside North America. [“The End of the Line,” 7 March 2008, p. 6.]

Goodridge points out that although The Golden Compass, New Line’s intended first entry in the “His Dark Materials” trilogy, had not done well in North America, its box-office abroad was likely to hit in the region of $300 and speculated that if it did, “Warner Bros. will be hard-pressed to deny production to a sequel.” [p. 8]

This optimistic view generously assumes that Warners would want to reward New Line’s old customers abroad by making the two remaining films in the trilogy despite a possible repeat of the first installment’s lackluster domestic gross. Instead, Jeff Bewkes had no interest in keeping up alliances with those loyal distributors, since by investing in the production of films up front, those distributors got to keep most of the box-office takings in their respective countries. As Bewkes said, “With the growing importance of international revenues, it makes sense for New Line to retain its international film rights and to exploit them through Warner Bros.’ global distribution infrastructure.” (For more on the international implications of the absorption of New Line, see this piece on my Frodo Franchise blog.)

Goodridge quotes San Fu Maltha, head of Dutch distributor A-Film (which had the LOTR trilogy for the Netherlands): “New Line was one of the supplier of major films. For [the distributors,] it was, if not a lifeline, an important source.” New Line films from 2007 that had done well abroad included Hairspray, Rush Hour 3, and The Golden Compass. Earlier hits had been entries in the franchises that had traditionally driven New Line’s success: the Austin Powers series, the Nightmare on Elm Street series, and so on. Goodridge concluded that Summit and Overture would be major sources of quality films for the foreign market.

In early May, 2008, with Cannes looming, Variety ran a story about the opportunities opened by New Line’s departure from the market. The subtitle suggests how big the change was perceived to be: “Opportunities Rock: Fresh contenders eager to join international indie scene’s new world order.”  The story speculated on the various independent sales groups that will be at Cannes and which ones might be strong enough to replace New Line: QED, with W, District 9, and A Perfect Getaway; Essential Entertainment, with My One and Only; The Film Department’s Law Abiding Citizen and The Rebound.

Swart also noted changes in two major suppliers to the indie market. Summit was growing, having opened its own domestic distribution wing. It “is chasing studio ambitions, which seems to have taken the main emphasis off foreign sales.” Mandate (notable for Juno and the Harold and Kumar sequels) had been acquired by Lionsgate in September, 2007.

Cannes also provided the occasion for a second in-depth analysis of the New Line void by Screen International. Author John Hazelton suggested that New Line’s regular supply of six to eight films to its regular distributors overseas benefited international indies as a whole:

 Many sales executives, in fact, go further and suggest that by boosting the fortunes of the distributor partners with which it had ongoing output or package deals—companies including the UK’s Entertainment, France’s Metropolitan, Australia’s Village Roadshow and Spain’s Tri Pictures—New Line effectively elevated the independent international industry as a whole. Other sellers benefited, for example, when the New Line distributors reinvested profits from The Lord Of  The Rings and Rush Hour movies—or from last Christmas’ The Golden Compass—in the acquisition of non-New Line films.

Hazelton quotes Steve Bickel, president of The Film Department’s international wing: “New Line provided a great service to all of us because they helped make strong companies that we’re now able to sell to.” The author also presciently singles out Summit and the newly merged Lionsgate and Mandate as “leading the field of remaining big picture suppliers,” noting that both companies had recently expanded into domestic distribution and were signing output deals in some foreign countries.

The article refers to The Weinstein Company and The Film Department as promising new players. Relativity, having produced Atonement, Evan Almighty, Baby Mama and Pineapple Express, was moving for the first time into international sales at Cannes. Other companies are mentioned as possibilities. Hazelton concludes:

On its own, Relativity probably will not fill the gap created by the disappearance of New Line from the business that A Nightmare On Elm Street, The Mask and The Lord of the Rings helped build. And neither will any of the other sales companies or producers now eyeing the fresh demand for upscale product from international buyers. But between them, the new entrants, growing boutiques and established players will be trying fill the New Line-shaped void appearing on the international sales landscape.

Reporting that autumn on the American Film Market, Screen International noted that The Weinstein Company had sold five films to Entertainment, formerly supplied by New Line. These included The Reader, Zack And Miri Make a Porno, and Piranha 3-D. Relativity had closed multi-year output deals with several overseas distributors, including former New Line customers Village Roadshow (Australia, New Zealand, and Greece) and Alliance Films (Canada).  Neither company, however, would be the one to release the second indie blockbuster franchise.

 From New Line to New Moon

In 2008, the world was in a global recession brought on by the financial crisis of 2007. But even as the trade press was speculating on which company or companies would replace New Line, help was on the way. Summit’s release of Twilight came in November of the same year, and although it did not make as much as the three following films in the franchise so far released, it grossed nearly $393 million internationally, $200 million of that outside North America. A healthy take for a film reportedly budgeted at $37 million.

The modest title did not indicate that Twilight was the launch of a franchise, though obviously Summit was hoping that it would be. The subsequent entries were more forthright and more lucrative: The Twilight Saga: New Moon (November, 2009, nearly $710 million worldwide), The Twilight Saga: Eclipse (June, 2010, about $700 million), and The Twilight Saga: Breaking Dawn Part 1 (November, 2011, just over $705 million), with the final installment due out in November of this year.

On the occasion of the second film’s release, Mike Goodridge of Screen International noted that the franchise’s success echoed that of a certain earlier series:

Distributed in major territories by companies which had signed to output deals with Summit Entertainment for its in-house productions, the first film, Twilight, was a sensation buyers were hardly anticipating when they made the initial deals. [….] Seeing E1 Films take nearly $20m in the UK, SND in France scoring $17m, Eagle in Italy $14.3m and Aurum in Spain $13.7m last weekend brought back the heady days of The Lord of the Rings openings.

Goodridge also pointed out:

 What The Lord of the Rings proved and the Twilight Saga reaffirms is that this kind of independent success is good for everybody. The Twilight distributors will have more money to invest in financing and acquisitions, benefiting other independent productions, while sales companies struggling to get films off the ground in a turgid distribution world will hopefully encounter a renewed buoyancy in the international markets.

He concluded, “For independents, the loss of New Line wasn’t as damaging as first imagined.” [“New Moon’s new line of success,” ScreenDaily.com, 26 November 2009.] It should be pointed out, though, that the gap between the third LOTR film and the first Twilight one was six years.

The Lionsgate share

On January 13, 2012, Lionsgate finalized its deal to buy Summit, thus acquiring the Twilight series. On March 23, Lionsgate released The Hunger Games, with an opening weekend of over $152 million domestically and a worldwide gross of $637 million after 9 weeks in release. Within less than three months, the company came to control the two largest indie franchises since LOTR. In late March, a financial analysis of Lionsgate by The Hollywood Reporter remarked, “The rest of the Hunger Games movies will now bring in significantly higher returns.” [Alex Ben Block, “How ‘Hunger Games’ Box Office Haul Impacts Lionsgate’s Bottom Line,” The Hollywood Reporter, 3 March 2012.] The reference was to the sales of foreign distribution rights, not higher box-office grosses.

Given how recent these events are, it happens that only two international distributors control both the Twilight series and The Hunger Games for their respective territories: Paris Filmes, of Brazil, and Nordisk Films, Denmark. Peter Philipsen, general manager for independent films at the latter told Variety that such series are rare: “There are not a lot of franchises in this business that really work, let along in the independent market,” Philipsen notes. “The last one before ‘Twilight’ was ‘Lord of the Rings,’ which was huge and gave a really big boost to the business as a whole.” [Diana Lodderhose and Adam Dawtrey, “International buyers eye bigger pics,” Variety.com, 5 May 2012.]

If Twilight helped ease the pain of the global recession for many indie distributors worldwide, by Cannes, 2012, the accumulating impact of its franchise and the addition of The Hunger Games led to greater prosperity. Those films and other successful non-franchise movies (some presumably bought with money from the Twilight franchise) led foreign distributors at this year’s Cannes festival to look for bigger films. Diana Lodderhose and Adam Dawtrey reported in Variety:

 Sales agents brought a number of well-received big-budget projects to market last year, notably “Cloud Atlas,” “Pompeii” and “Enders Game.” But this year, with the indie sector stronger theatrically than it has been in years, and with international distributors flush with success from pics like the “Twilight” franchise and “The Hunger Games,” as well as “The Iron Lady,” “The Woman in Black,” “The Artist” and “Midnight in Paris” all having performed well territorially, there’s a feeling among buyers that bigger is better.”

A large number of new indie companies have emerged, many of them started by executives formerly at Summit, Lionsgate, and New Line. Among those represented at Cannes for the first time this year is Speranz13 Media, headed by Camela Galano, mentioned above as having helped arrange pre-sales for LOTR at New Line. Variety commented:

Pre-Cannes, a raft of new sales outfits headed by esteemed execs […], coupled with more money in the pockets of indie distribs who had successful runs with such pics as the latest “Twilight” installment, “The Hunger Games” and “The Intouchables,” suggested that this would be a market with greater liquidity.

And it has been.

“Many indie buyers have money now and they know what they want, which is studio-level movies,” said Foresight’s Tama Stuparich de la Barra, whose projects “Lone Survivor” and “Motor City” sold out at the market. [Diana Lodderhose and Dave McNary, “Cannes market totes up solid business,” 21 May, 2012.]

One notable aspect of all this is a return to pre-sales for financing big independent films. A few years ago, pre-sales were declared dead, partly because distributors couldn’t afford to invest in unmade projects. Lionsgate, however, financed about 60% of The Hunger Games through the sales of individual foreign sales rights. Production rebates from North Carolina kept the film’s budget at a relatively modest $80 million, limiting the studio’s risk on the film. These strategies are similar to what New Line tried while making LOTR.

I have yet to see coverage of Cannes that explicitly dubs Lionsgate the successor to New Line, the new indie “mini-major” that will supply a steady stream of films to foreign distributors with which it has output deals. Still, the conclusion seems all but made. At Cannes it began pre-sales for Catching Fire, the sequel to The Hunger Games. On May 23 it announced a long-term renewal of its partnership with the powerful French producer-distributor StudioCanal, including a deal for  StudioCanal to distribute Catching Fire in German-speaking regions. Under this partnership Lionsgate has certain distribution rights to StudioCanal’s huge library of film and television titles, the third largest in the world, including titles ranging from Grand Illusion and The Discreet Charm of the Bourgeoisie to Terminator 2 and The Deer Hunter. [Dave McNary, “Lionsgate, Studiocanal extend pact,” Variety.com, 23 May 2012] On May 24, Screen International summed how various sales for various companies at Cannes were going:

Patrick Wachsberger and Helen Lee Kim reported a roaring trade on the Lionsgage slate, especially the Dirty Dancing remake. “It has been a strong market for us and the team has been seamless,” Wachsberger said of the post-merger infrastructure. [Jeremy Kay, “Market buoyed by sellouts,” 24 May 2012, p. 1.]

No doubt at some point Lionsgate will face a financial crisis and lose its central status, but with two big indie franchises in progress, it seems settled for the foreseeable future and beyond.

Ironically, the blockbuster franchise that started it all will resume this year, but not in the indie sector. The two parts of The Hobbit, due to be released in December of this year and 2013 as prequels to LOTR, are being produced by New Line. They are not being financed by pre-sales to indie distributors around the world. Instead Warner Bros. is providing funding, and it will also distribute.

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I have linked to stories when I could find them online, but some articles I quoted are either behind paywalls or simply not online. They are taken from issues of the trade papers mentioned in the text.

The illustration at the top of the entry topped an article called “Hey, Big Spenders,” cited above. It appeared in The Hollywood Reporter (February 2003), pp. 1, 4, 8, 12. The piece dealt with the American Film Market, which at that time still happened in the spring. Naturally the caricature of Frodo tossing money around caught my eye. (The distributors flush with LOTR cash are, left to right, Joel Pearlman of Roadshow Films, Australia (?); Trevor Green of Entertainment Film Distributors, UK; and Hiromitsu Kurukawa, Nippon Herald Pictures, Japan.) This was one of the few articles I found in the trade press that dealt with the considerable impact that LOTR had on the international indie and foreign-language film market. I used the caricature as an illustration in Chapter 9 of my book. After all, how do you illustrate the concept of a film helping pull the indie business out of a global slump? That picture was ready-made for such a topic. I contacted the artist, Victor Juhasz, for permission to reprint the image, which he kindly gave. It occurred to me that he would be the ideal person to provide an image for the cover of the book as well. Again, how do you illustrate the general concept of a franchise based on The Lord of the Rings? Have a character surrounded by licensed products based on that character, I figured. Fortunately the University of California Press agreed. Based on photos, an action figure, a polystone collectible bust, and a video-game strategy book that I sent him, Victor produced exactly what I had in mind. A small image of that cover illustration appears up at the right, beside the Hollywood Reporter caricature.

Richard Taylor during the October 20 anti-boycott march.

Kristin here:

Ordinarily I post about Peter Jackson’s Tolkien-adapted films on my other blog, The Frodo Franchise. But over the past five weeks a dramatic series of events has played out in New Zealand in regard to the Hobbit production. Those events tell us interesting things about today’s global filmmaking environment. As countries around the world create sophisticated filmmaking infrastructures, complete with post-production facilities, they are creating a competitive climate. Government agencies woo producers of big-budget films by offering tax rebates and other monetary and material incentives. Usually such negotiations go on behind closed doors, but the recent struggle over The Hobbit was played out more publicly.

Back in late September, the progress of Jackson’s project seemed slow. We Hobbit-watchers were mainly fretting over the lack of a greenlight for the two-part film “prequel” to The Lord of the Rings.

Of course, Tolkien’s LOTR (1954-55) was a sequel to The Hobbit (1937), but the films will have been made in reverse order. That’s due to MGM’s having the distribution rights back in 1995 when Peter Jackson went looking to use Tolkien’s novels to show off Weta Digital’s fancy new CGI abilities. Miramax bought the LOTR production and distribution rights and the Hobbit production rights.

Most of the news I was then blogging about related to MGM’s financial problems and how they would be resolved. Would Spyglass semi-merge with the ailing studio, convert its nearly $4 billion in debt into equity for its creditors, and bring it back into a position to uphold its half of the Hobbit co-production/co-distribution deal with New Line? Or would Carl Icahn push through his scheme to merge Lionsgate and MGM? The answer, by the way, came just this Friday, October 29, when the 100+ creditors voted to accept the Spyglass deal. I have been saying all along that the MGM situation was not the primary sticking point that was delaying the greenlight, even though most media reports and fan-site discussions assumed that it was. The greenlight having been given before this past week’s vote, I assume I was right. The real reason for the delay has not been revealed.

Meanwhile, other websites were speculating about casting rumors. Would Martin Freeman really play Bilbo, or were his other commitments going to interfere? (He will play Bilbo. Good choice, in my opinion. The man looks just like a hobbit.)

Then, on September 25 came the news that international actors’ unions were telling their members not to accept parts in The Hobbit. There was a boycott. The result was a maelstrom of events for the past five weeks or so. You may have heard about some of them. There were meetings and petitions. When Warner Bros. threatened to take the film to a different country, pro-Hobbit rallies followed. A visit by some high-up New Line and WB execs and lawyers to New Zealand led to hurried legislation to change the labor laws to reassure the studios that a strike wouldn’t happen. Finally, the government ended up raising the tax rebates for the production. Result: The Hobbit will be made in New Zealand after all. New Line, by the way, was folded into Warner Bros. by their parent company, Time Warner, after The Golden Compass failed at the box office. It remains a production unit but no longer does its own distribution, DVDs, etc.

The news that followed the launch of the boycott has come thick and fast, often involving misinformation. It was complicated, centering on an ambiguity in New Zealand labor laws as applied to actors and on a strange alliance between Kiwi and Australian unions. One of the biggest American film studios decided to use the occasion to demand more monetary incentives from the New Zealand government. I tried to keep up with all this and ended up posting 110 entries on the subject. (In this I was helped mightily by loyal readers who sent me links. Special thanks to eagle-eyed Paul Pereira.) That was out of 144 total entries from September 25 to now. There was plenty of other news to report. During all this, the MGM financial crisis was creeping toward its resolution, firm casting decisions were finally being announced, and the film finally got its greenlight. Whew!

For those who are interested in The Hobbit and the film industry in general but don’t want to slog through my blow-by-blow coverage, I’m offering a summary here, along with some thoughts on the implications of these events. Those who want the whole story can start with the link in the next paragraph and work your way forward. Obviously the links below don’t include all 110 entries.

In some cases the dates of my entries don’t mesh with those of the items I link to, given that New Zealand is one day ahead. I’ve indicated which side of the international dateline I’m talking about in cases where it matters.

September 25: Variety announces that the International Federation of Actors (an umbrella group of seven unions, including the Screen Actors Guild) is instructing its members not to accept roles in The Hobbit and to notify their union if they are offered one.

At that point, the film had not yet been greenlit, so it wasn’t clear how this would affect the production. The action against The Hobbit originated with the Australian union MEAA (Media Entertainment & Arts Alliance) and its director, Simon Whipp. Because relatively few actors in New Zealand are members of New Zealand Actors Equity, that small union is allied with the MEAA. The main goals of the union’s efforts were to secure residuals and job security for actors. The MEAA maintained that Ian McKellen (Gandalf), Cate Blanchett (Galadriel), and Hugo Weaving (Elrond) all supported the boycott; so far no evidence for this has been offered. Possibly they agreed to abide by it but were not in favor of it. Given the lack of a greenlight, none had been offered a role yet.

The main bone of contention has been a distinction made in labor laws in New Zealand. Actors are considered to be equivalent to contractors rather than employees, since they are hired on a temporary basis; it is illegal for a company to enter into negotiations with a union representing contractors. On that basis, Peter Jackson, who was first contacted in mid-August, refused to meet with the group. Besides, he isn’t the producer hiring the actors. Warner Bros., through New Line, is. As with all significant films, a separate production company, belonging to New Line, has been set up to make The Hobbit. It’s called 3 Foot 7. (The LOTR production company was 3 Foot 6, the average height of a hobbit being 3’6″.)

September 27. Peter Jackson responded angrily to the boycott, laying out the issues that would ultimately guide the New Zealand government’s response to the crisis:

“I can’t see beyond the ugly spectre of an Australian bully-boy using what he perceives as his weak Kiwi cousins to gain a foothold in this country’s film industry. They want greater membership, since they get to increase their bank balance.

“I feel growing anger at the way this tiny minority is endangering a project that hundreds of people have worked on over the last two years, and the thousands about to be employed for the next four years, [and] the hundreds of millions of Warner Brothers dollars that is about to be spent in our economy.”

Losing The Hobbit would leave New Zealand “humiliated on the world stage” and “Warners would take a financial hit that would cause other studios to steer clear of New Zealand”, Jackson said.

“If The Hobbit goes east [East Europe in fact], look forward to a long, dry, big-budget movie drought in this country. We have done better in recent years with attracting overseas movies  and the Australians would like a greater slice of the pie, which begins with them using The Hobbit to gain control of our film industry.”

Various people and organizations in New Zealand soon line up behind one side or the other. Those siding with Jackson include Film New Zealand (which promotes filmmaking by foreign countries in New Zealand) and SPADA (the Screen Production and Development Association) and eventually the government. On the unions’ side is the Council of Trade Unions.

September 28. New Line, Warner Bros., and MGM weigh in with a statement that ups the ante. It dismisses the MEAA’s claims as “baseless and unfair to Peter Jackson” and continues:

To classify the production as “non-union” is inaccurate. The cast and crew are being engaged under collective bargaining agreements where applicable and we are mindful of the rights of those individuals pursuant to those agreements. And while we have previously worked with MEAA, an Australian union now seeking to represent actors in New Zealand, the fact remains that there cannot be any collective bargaining with MEAA on this New Zealand production, for to do so would expose the production to liability and sanctions under New Zealand law. This legal prohibition has been explained to MEAA. We are disappointed that MEAA has nonetheless continued to pursue this course of action.

Motion picture production requires the certainty that a production can reasonably proceed without disruption and it is our general policy to avoid filming in locations where there is potential for work force uncertainty or other forms of instability. As such, we are exploring all alternative options in order to protect our business interests.

Thus the specter of the production being not only delayed but also taken to another country is raised, and the implications of such a threat will gradually force the government to take measures to prevent that happening.

Peter Jackson also makes a statement to the Wellington newspaper that the Hobbit production might move to Eastern Europe. (The next day he reveals that WB is considering six countries for it.)

That night, a group of 200 actors met in Auckland, issuing a statement again asking the producers to meet for negotiations.

October 1. Jackson and WB voluntarily offer a form of residuals to Hobbit actors:

Sir Peter Jackson said New Zealand actors who did not belong to the United States-based Screen Actors’ Guild had never before received residuals – a form of profit participation. Warner Brothers had agreed to provide money for New Zealand actors to share in the proceeds from the Hobbit films.

It would be worth “very real money” to New Zealand actors. “We are proud that it’s being introduced on our movie. The level of residuals is better than a similar scheme in Canada, and is much the same as the UK residual scheme. It is not quite as much as the SAG rate.”

After much speculation, an announcement is made that Peter Jackson will definitely direct the film (which Guillermo del Toro had exited in May).

At about this time members of the filmmaking community begin campaigning actively against the boycott. An anti-boycott petition for New Zealand filmmakers and persons indirectly related to production to sign goes online; it ends with 3275 people having endorsed it.

October 15. The Hobbit is greenlit, but the possibility of moving the production out of New Zealand remains. Actors who have already been auditioned begin to be officially cast.

October 20. Actors Equity NZ is due to meet in Wellington. Richard Taylor (head of Weta Workshop) calls for a protest march. The actors’ meeting is called off due, the union says, to the “angry mob” that results. (Videos and photos posted online show a lengthy line of people walking through the streets in a peaceful fashion; that’s Richard talking to the press in the photo at the top. A person less likely to incite a “mob” to anger I cannot imagine.) An actors’ meeting scheduled for the next day in Auckland is also called off, putatively for the same reason, though no protest event had been planned there.

The turning-point day

October 21 (NZ). Jackson and his partner Fran Walsh issue a statement that implies that Warner Bros. has decided to move The Hobbit elsewhere:

“Next week Warners are coming down to New Zealand to make arrangements to move the production offshore. It appears we cannot make films in our own country even when substantial financing is available.”

Helen Kelly, president of the Council of Trade Unions calls Jackson “a spoiled little brat” on national television, helping turn the public against her cause.

Fran Walsh hints during a radio interview that WB might move The Hobbit to Pinewood Studios in England (where the Harry Potter films have been shot).

Prime Minister John Key says he hopes the production can be kept in New Zealand. Economic Development Minister Gerry Brownlee says he will meet with the WB delegation.

The international actors’ boycott against The Hobbit is called off.

October 21 (U.S.)/22 (NZ). WB is still considering moving the production, saying it has no guarantee that the actors will not go on strike. Key suggests that the labor law might be changed to provide that guarantee. The proposed legislation soon will become known as the “Hobbit bill.”

The Wall Street Journal suggests that a slight slip in the value of the New Zealand dollars against the American dollar is partly due to uncertainties about whether The Hobbit production will stay in the country.

WB announces the casting of Martin Freeman as Bilbo, plus several actors chosen as dwarves.

Bilbo Baggins by Tolkien and Martin Freeman, Bilbo-to-be.

A “positive rally” to convince WB to keep the production in New Zealand is announced. This eventually results in individual rallies in several cities and towns on October 25.

( U.S. time) Variety reports that unnamed sources within WB have said the studio is inclining toward keeping the production in New Zealand. This is the only hint of positive news from inside WB that comes out during the entire process.

Over the next few days, much finger-pointing takes place. Figures concerning the potential loss to NZ tourism if the film goes elsewhere are released. Helen Kelly apologizes for her “brat” remark.

October 25 (NZ). The WB delegation of 10 executives and lawyers arrive in Wellington. The pro-Hobbit rallies take place.

Pro-Hobbit rally in Wellington (Marty Melville/Getty Images).

October 26. News breaks that if The Hobbit is sent to another country, the post-production work (originally intended for Weta Digital and Park Road Post, companies belonging to Jackson and his colleagues) could take place outside New Zealand.

The WB delegation arrives at the prime minister’s residence in a fleet of silver BMWs. After the meeting ends, Key puts the chances of retaining the production at 50-50. He reiterates that the labor law might be changed.

Photo: NZPA

Presumably at this meeting, WB also puts forward a demand for higher tax rebates or other incentives; other countries it has been considering have more generous terms. Ireland has offered 28%, while New Zealand’s Large Budget Screen Production Grant scheme offers only 15%. This demand is not made public until later. During Key’s speech after the meeting, however, he mentions the possibility of higher incentives, but says the government cannot match 28%.

Editorials soon appear attacking the idea of changing a law at the behest of a foreign company.

The government’s deal with Warner Bros.

October 27. The New Zealand dollar again slips in relation to the American dollar, again attributed to uncertainty about The Hobbit.

Key and other government officials meet again with the WB delegation. The legal problem has been resolved to both sides’ satisfaction, but WB is holding out for higher incentives.

In the evening, Key announces that an agreement has been reached and the Hobbit production will stay in New Zealand:

As part of the deal to keep production of the “The Hobbit” in New Zealand, the government will introduce new legislation on Thursday to clarify the difference between an employee and a contractor, Mr. Key said during a news conference in Wellington, adding that the change would affect only the film industry.

In addition, Mr. Key said the country would offset $10 million of Warner’s marketing costs as the government agreed to a joint venture with the studio to promote New Zealand “on the world stage.”

He also announced an additional tax rebate for the films, saying Warner Brothers would be eligible for as much as $7.5 million extra per picture, depending on the success of the films. New Zealand already offers a 15 percent rebate on money spent on the production of major movies.

(The figure for the government’s contribution to marketing costs is later given as $13 million.)

October 28 (NZ). Peter Jackson returns to work on pre-production, which his spokesperson says has been delayed by five weeks as a result of the boycott. Principal photography is expected to begin in February, 2011, as had been announced when the film was greenlit. (The two parts are due out in December 2012 and December 2013.)

The Stone Street Studios. The huge soundstage built after LOTR is at the left; the former headquarters of 3 Foot 6 at the upper left.

In Parliament, a vote to rush through consideration of the “Hobbit bill” passes, and debate continues until 10 pm.

October 29 (NZ). The “Hobbit bill” passes in Parliament by a vote of 66 to 50, thus fulfilling the governments offer to WB and ensuring that The Hobbit would stay in New Zealand. It was known in advance that Key had enough votes going into the debate to carry the legislation.

It is revealed that James Cameron has been in talks with Weta to make the two sequels to Avatar in New Zealand. (Avatar itself was partly shot in New Zealand, with the bulk of the special effects being done there.) The timing has nothing to do with the Hobbit-boycott crisis. The two films are due to follow The Hobbit, with releases in December 2014 and December 2015.

October 30 (NZ). It is announced that the Hobbiton set on a farm outside Matamata will be built as a permanent fixture to act as a tourist attraction. (The same set, used for LOTR, was dismantled after filming, leaving only blank white facades where the hobbit-holes had been; nevertheless the farm has attracted thousands of tourists. See below.) Warner Bros. had been persuaded by the New Zealand government to permit this, though whether this was part of the agreement made with the studio’s delegation is not clear. I suspect it was.

It is also announced that the extended coverage of the 15% tax rebates specified in the “Hobbit bill” will apply to other films from abroad made in New Zealand—but only those with budgets of $150 million or more. (Presumably in New Zealand dollars.)

A remarkable outcome

In a way, it is amazing that a film production, even a huge one like The Hobbit, virtually guaranteed to be a pair of hits, could influence the law of a country–and make the legal process happen so quickly. Yet given the ways countries and even states within the USA compete with each other to offer monetary incentives to film productions, in another way it is intriguing that such pressure is not exercised by powerful studios more often. In most cases, a production company simply weighs the advantages and chooses a country to shoot in. Maybe countries get into bidding wars to lure productions or maybe they just submit their proposals and hope for the best. Certainly the six other countries considered briefly by WB were quick to jump in with information about what they could offer the Hobbit production.

In the case of Warner Bros. and The Hobbit, everyone initially assumed that the two parts would be filmed in New Zealand, just as LOTR had been. Yet the actors’ unions created an opportunity. The boycott gave Warner Bros. the excuse to threaten to pull the film out of New Zealand. Meeting with top government officials, WB executives demanded assurance that a strike would not occur–and oh, by the way, we need higher monetary incentives. As a result, a compromise was reached, the incentives were expanded, and there was a happy ending for the many hundreds of filmmakers of various stripes who would otherwise have been out of work.

Although there is considerable bitterness among the actors’ union members and those who supported their efforts, many in New Zealand see the tactics of the MEAA as extremely misguided. Kiwi Jonathan King, the director of the comic horror film Black Sheep, sums it up:

But this was all precipitated by an equal or greater attack on our sovereignty: an aggressive action by an Australian-based union taken in the name of a number of our local actors, backed by the international acting unions (but not supported by a majority of NZ film workers), targeting The Hobbit, but with a view to establishing a ’standard’ contract across our whole industry. While the actors’ ambitions may be reasonable (though I’m not convinced they are in our tiny market and in these times of an embattled film business), the tactic of trying to leverage an attack on this huge production at its most precarious point to gain advantage over an entire industry was grotesquely cynical and heavy-handed, and, as I say, driven out of Australia. Imagine SAG dictating to Canadian producers how they may or may not make Canadian films!

Whether the deal was unwisely caused by a pushy Australian union is a matter for debate. Whether the New Zealand government unreasonably bowed down to a big American studio is as well. But the deal that the two parties reached is a remarkable one, perhaps indicative of the way the film industry works in this day of global filmmaking.

Warner Bros. gets more money and a more stable labor situation. What’s in it for New Zealand? First, the incentives for large-budget films from abroad to be made in the country are raised. This comes not through an increase in the tax-rebate rate but an expansion of what it covers:

The Government revealed this week that the new rules would mean up to $20 million in extra money for Warner Bros via tax rebates, on top of the estimated $50 million to $60 million under the old rules.

While the details of the Large Budget Screen Production Grant remain under wraps, Economic Development Minister Gerry Brownlee said it would effectively increase the incentives for large productions to come to New Zealand.

The grant is a 15 per cent tax rebate available on eligible domestic spending. At the moment a production could claim the rebate on screen development and pre-production spending, or post-production and visual effects spending, but not both.

If the Government allowed both aspects to be eligible, it would be a large carrot to dangle in front of movie studios.

Mr Brownlee was giving little away yesterday but said the broader rules would apply only to productions worth more than US$150 million ($200 million).

It would bridge the gap “in a small way” between what New Zealand offered and what other countries could offer.

During this period, it was claimed that WB had already spent around $100 million on pre-production on The Hobbit, which has been going on for well over a year now. That figure presumably is in New Zealand currency.

There are some in New Zealand who oppose “taxpayer dollars” going to Warner Bros. As has been pointed out–though apparently not absorbed by a lot of people–Warner Bros. will spend a lot of money in New Zealand and get some of it back. The money wouldn’t be in the government’s coffers if the film weren’t made in the country. It’s not tax-payers’ money that could somehow be spent on something else if the production went abroad.

Another advantage for the country is the permanent Hobbiton set, which will no doubt increase tourism. There are fans who have already taken two or three tours of LOTR locations and will no doubt start saving up to take another.

One item that didn’t get noticed much during the deluge of news is that one of the two parts will have its world premiere in New Zealand. That’ll probably happen in the wonderful and historic Embassy theater, which was refurbished for the world premiere of The Return of the King. It was estimated that the influx of tourists and journalists for that event brought NZ$7 million to the city of Wellington. About $25 million in free publicity was provided by the international media coverage.

The Embassy in October 2003, being prepared for the Return of the King world premiere.

The deal also essentially makes the government of New Zealand into a brand partner with New Line to provide mutual publicity for The Hobbit. As I describe in Chapter 10 of The Frodo Franchise, the government used LOTR to “rebrand” the entire country. It worked spectacularly well and had a ripple effect through many sectors of society outside filmmaking. The country came to be known more for its beauty, its creativity, and its technical innovations than for its 40 million sheep. Now in the deal over The Hobbit, the government has  committed to providing NZ$13 million for WB’s publicity campaign. But the money will also go to draw business and tourists. As TVNZ reported:

But the Prime Minister says for the other $13 million in marketing subsidies, the country’s tourism industry gets plenty in return.

“Warner Brothers has never done this before so they were reluctant participants, but we argued strongly,” Key said.

Every DVD and download of The Hobbit will also feature a Jackson-directed video promoting New Zealand as a tourist and filmmaking destination.

Graeme Mason of the New Zealand Film Commission says the promotional video will be invaluable.

“As someone who’s worked internationally for most of my life, you can’t quantify how much that is worth. That’s advertising you simply could not buy.”

If the first Hobbit film is as popular as the last Lord of the Rings movie, the promotional video could feature on 50 million DVDs.

Suzanne Carter of Tourism New Zealand agrees having The Hobbit production here is a dream come true.

“The opportunity to showcase New Zealand internationally both on the screen and now in living rooms around the world is a dream come true,” Carter said.

Marketing expert Paul Sinclair says the $13 million subsidy works out at 26 cents a DVD.

“It’s a bargain. It is gold literally for New Zealand, for brand New Zealand,” he said.

It’s not clear how the promotional partnership will be handled. There was a similar, if smaller partnership when LOTR was made. New Line permitted Investment New Zealand, Tourism New Zealand, the New Zealand Film Commission, and Film New Zealand to use the phrase, “New Zealand, Home of Middle-earth” without paying a licensing fee. (Air New Zealand was an actual brand partner during the LOTR years.) But for the government to actually underwrite the studio’s promotional campaign may entail more. That deal is more like the traditional brand partnership, where the partner agrees to pay for a certain amount of publicity costs in exchange for the right to use motifs from the film in its advertising. Has a whole country ever brand-partnered a film? I can’t think of one.

In my book I wrote that LOTR “can fairly claim to be one of the most historically significant films ever made.” That’s partly why I wrote the book, to trace its influences in almost every aspect of film making, marketing, and merchandising–as well as its impact on the tiny New Zealand film industry that existed before the trilogy came there. Years later, I still think that my claim about the trilogy’s influences was right. When an obscure art film from Chile or Iran carries a credit for digital color grading, it shows that the procedure, pioneered for LOTR, has become nearly ubiquitous. There are many other examples. The troubled lead-up to The Hobbit‘s production and the solutions found to its problems suggest that it will carry on in its predecessor’s fashion, having long-term consequences beyond boosting Warner Bros.’ bottom line. It will be interesting to see if other big studios announce they will film in one country and then find ways of maneuvering better terms by threatening to leave–or by actually leaving.

From Worldwide Hippies