The issue was the focus of national hysteria. The Hobbit was in danger of leaving loyal New Zealand soil to travel to some cheaper, foreign location, writes Sophie Gilmore of Logan Park High School.
Never again, it seemed, will little Bilbo gleefully frolic in native Kiwi bush.
The cause of this panic, of course, was the protest and resulting boycott of the film by the Actors Equity Union, led by Simon Whipp (who comes from Australia, so why is it any of his business anyway?)
This made executives at the film's production company Warner Brothers very cross, and threaten to take their movie where it was really wanted.
In a brief recap: in an interview on Campbell Live director Peter Jackson, who appeared on the verge of tears, said he felt "ambushed" by the protest, and wanted nothing more than to make the films here.
However Warner Brothers said, in tones which resembled a schoolroom telling-off, that continuing production here would be unlikely.
The Prime Minister John Key then jumped in to save the production, conferencing with the Warner Brothers executives and bringing about a law change, making him look more heroic than usual.
On top of this, the film company secured around $93 million dollars of subsidies from the government to fund and advertise their $600 million film.
The Hobbit would stay, but at a heavy cost.
Now, when you look at the figure, "$93 million" seems like an awful lot.
But will it be worth it in the long run? Key said "It was only commercial. We did the business, " which doesn't sound particularly conclusive.
It looks like everyone was so determined to keep the film here, that any price was reasonable.
A poll on the same Campbell live episode showed that ninety percent of people blamed the actors' union, not the film company, for all the trouble.
It seems that when we New Zealanders really get attached to someone - like Jackson- they can never do wrong, and we will always support them, no matter the issue.
Of course we must look at the other side, and see what the production company got out of it.
They used the strike to their advantage to gain more benefits, although they appeared to have no problem with the price of production before the strike.
The question is: was there ever any danger of them leaving at all? Have we been sneakily manipulated in our hospitality? What will we get out of the film that will make it so worth while? What was it we were all so desperate not to lose? The tourism potential, for a start.
Last year, tourism was the country's biggest export earner, bringing in $9.3 billion.
Much of this must be attributed to NZ's international fame as "Middle Earth", which will certainly be boosted again after these two films are made.
Another is the film industry potential.
Many massive-budgeted Hollywood films have been made here following the Lord of the Rings, because of the striking locations and also because of our good reputation, and more are on the way, such as the next two Avatar films.
All that would be in serious danger if Warner Brothers decided we were too much trouble to deal with.
But those two things don't seem enough to explain the panic of the situation, the endless news headlines and the heated public discussion.
What is it that makes The Hobbit so important?
The thing which seems to matter most to the average New Zealander, it seems, is the fact that The Lord of the Rings has become such an integral part of out national identity.
It's what put our country on the map.
Who didn't sit in the cinema and feel themselves inflate with pride watching Aragorn and Legolas prance ruggedly across familiar Central Otago? Without analyzing the money side blow-by-blow, let's instead look at what the films have given us holistically.
A sense of uniqueness. A sense of pride.
Middle Earth has become as much of a New Zealand institution as Kiwifruit, rugby and the summer bach.
Can you put a price on that?
- Sophie Gilmore, Year 13, Logan Park High School.
