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The United States tech giant Amazon told the Government on Thursday the second season of the as-yet unnamed series would be filmed in the United Kingdom.
Shooting of the first season, which began in Auckland in February last year, wrapped on August 2.
Amazon Studios announced that post-production work on the first season would continue until next June, but the second season would be filmed in the UK because it wanted to expand its production capacity there.
In its application to the Environmental Protection Authority for a fast-tracked consent, Silverlight studio, which hopes to build a film park, complete with a replica of a New York park, on the outskirts of Wanaka, said the series being filmed in New Zealand would mean a lack of studio space in the country.
A lack of space both nationally and internationally would contribute to the viability of the project.
Silverlight Studios team member Mike Wallis said it was disappointing for the country’s film industry.
However, Mr Wallis was confident the lease held by Amazon would be taken up by another studio or streaming service soon.
The Silverlight proposal would add "massive" value to New Zealand’s film industry, he said.
"To be competitive New Zealand does need to expand the number and quality of facilities in the country. Large productions need big infrastructure."
Others in the Otago and Southland film industry say the decision will have minimal impact in the South.
Film Otago Southland chairman Brad Hurndell said he was disappointed for the industry as a whole, but particularly for film crew from the region who had relocated to Auckland to work on the production.
"It’s a shame, because there are a lot of crew involved, and there’s a significant risk that some of them might follow that work over to the UK."
He accepted Amazon’s reasons for leaving, and the closed borders, even with exemptions for major productions, were probably a contributing factor.
Enticing other international productions to replace it was going to be difficult.
"There are productions that are not able to happen, which would keep those guys and girls busy, because of the border issue."
Queenstown industry veteran Brett Mills said the only work in the region he knew about was some shooting of landscape backgrounds, known as "plates", at Mt Kidd, in Fiordland, earlier this year.
It was a "million-dollar question" whether that kind of work would continue now.
"They might need a second unit to be shooting on the landscape ... we’ve got to see the show to see how much the landscape features."
Mr Mills said it was a massive blow for Auckland, where there had been 1000 people on set on some days.
However, everyone in the industry knew it was "like rock ‘n’ roll".
"Nothing lasts forever, and they’ve had two years of really high-paid work.
"Hopefully, they’ve been putting a fair amount away for a rainy day."
Economic development minister Stuart Nash said in a statement yesterday the Government would no longer proceed with part of the deal to support the production.
The 5% incentive it provided, on top of the standard 20% rebate for all international productions, would be withdrawn.
It was estimated the company could be eligible for a $132million rebate under the 20% rule, based on its qualifying local expenditure of $663.7million, Mr Nash said.
"We have no regrets about giving this production our best shot with government support."
New Zealand Film Commission chief executive David Strong said the decision was a shame, but the production had employed nearly 2000 New Zealanders "in a year of Covid".
Amazon announced in 2017 it would produce a multi-season series exploring new storylines preceding author J.R.R. Tolkien’s The Fellowship of the Ring.
The eight-episode series is scheduled to premiere on Amazon’s Prime Video streaming service on September 2 next year. — Additional reporting Marjorie Cook