The Hobbit tourism boom

June 5th, 2013 at 11:00 am by David Farrar

Olivia Wannan at Stuff reports:

It’s not just Bilbo journeying there and back again through Middle-earth – almost one in 10 international visitors are here for the same reason.

Tourism New Zealand figures published yesterday show overseas tourist arrivals were up 10 per cent from 2012 for the first four months of the year.

Of the one million international visitors in those months, 8.5 per cent said was a factor in their choice.

For one in eight tourists, a Middle-earth experience, such as visiting Hobbiton, near Matamata, was high on the to-do list.

Yet it almost all didn’t happen thanks to the Australian Hobbit Hater and his mates. And even today they attack the Government for keeping the film in New Zealand, after the Australian union initiated a global boycott of the film.

Now let us try to estimate how much money NZ has made from tourism, associated with the film (and it may increase once the DVDs go fully out with NZ tourism segments on them). 1,000,000 over four months is 3,000,000 over a year. 8.5% of that is 255,000 extra tourists.

That average spend by an international tourist is $2,697 so the direct extra spend is around $687 million a year. Recall that every time someone attacks the Government for saving the film. And no doubt if the Government had done nothing, and if the films had gone overseas, they’d blame the Government for that also.

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48 Responses to “The Hobbit tourism boom”

  1. speters (108 comments) says:

    I think it’s slightly disingenuous to imply that every tourist for whom the Hobbit was “a factor” would not have come if the movie hadn’t been made.

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  2. Redbaiter (8,878 comments) says:

    What I don’t get is that if its such a great commercial success, why did the government need to sponsor it?

    Surely the NZ tourist industry should have stumped up the money to subsidize the production here in NZ. If movies help tourism then it is this industry that should be forming investment groups to attract film makers.

    Getting the government involved is not in line with National Party founding principles, and they should return to them and let the private sector make these kind of decisions / investments.

    I am for small government and a private sector driven economy, and I am not going to go back on that view just because the National Party thinks otherwise.

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  3. Kea (12,841 comments) says:

    I can say that people overseas will tend to link NZ with Lord of the Rings, far more than a bunch of guys in skimpy shorts groping each other in a paddock.

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  4. dime (9,972 comments) says:

    Crony capitalism i tells ya lol

    red – while i agree with your ideology, JK’s move made sense. there is always scope for a deal that will benefit NZ while pissing off the unions :D

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  5. Dean Papa (784 comments) says:

    it’d be really unfortunate if people overseas link us with LOTR, given it is a very English tale, written by an Englishman, and has no real cultural connection with NZ. But as the great philosopher Prince Phil once remarked, “Tourism?, it’s just national prostitution”. Good to see we are leading the world in prostituting ourselves.

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  6. hmmokrightitis (1,590 comments) says:

    Simple weddy – risk and return.

    Success was not guaranteed – yes, in this case it was probably more likely – but studios will always look to offload some risk, makes huge commercial sense. And when the country can – and in this case has – gain from the process, it makes sense to hit the gubbermint up.

    But I agree with speters DPF, youve drawn a hard conclusion based on a “It was part of their decision” statement. Yes, they came partly becuase of, not entirely because of. Its part of the draw. But again, something to celebrate and yes, the current gubbermint did well.

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  7. Tautaioleua (305 comments) says:

    Dean Papa is right. Once Were Warriors is our cultural connection to the world :-)

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  8. Redbaiter (8,878 comments) says:

    “it makes sense to hit the gubbermint up.”

    No it does not.

    The taxpayer should not be forced to underwrite commercial risk in film making. That is a clear private sector role.

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  9. Ultima (29 comments) says:

    Redbaiter (3,254) Says:
    June 5th, 2013 at 11:12 am
    What I don’t get is that if its such a great commercial success, why did the government need to sponsor it?

    Yes but the gov didn’t fork out any money to sponsor it. Just like the convention centre deal, no tax payer money was put in up front. So the risks, if the films are duds, are minimal to the tax payer.

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  10. dime (9,972 comments) says:

    “Yes but the gov didn’t fork out any money to sponsor it” very true.

    jeez red, whats next? the govt is borrowing for tax cuts?

    tax cuts are a big cost for the govt? ya sound like a communist :D

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  11. RRM (9,924 comments) says:

    …not in line with National Party founding principles…

    That old chestnut again?

    Maybe they’ve grown up… rejected dogma..?

    Ideological purity is for churches.

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  12. Redbaiter (8,878 comments) says:

    “Yes but the gov didn’t fork out any money to sponsor it.”

    $34m deal sees Hobbit stay in NZ

    http://www.nbr.co.nz/article/key-comes-through-the-hobbit-will-be-made-nz-132198

    “ya sound like a communist”

    You sound like a crony capitalist. Really far more the communist.

    If tax cuts are good for the economy (as they are) then we should have them across the board. Not for a “favourite” industry.

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  13. dime (9,972 comments) says:

    “And the government has scored through an agreement that New Zealand will be promoted through all the marketing DVDs and other material that will be used to publicise the two Hobbit movies, as well as hosting one of the world premieres.

    To get that it will offset $US10 million of Warner Brothers marketing costs.”

    so its a media buy.

    tell me red, would you put your hand on the bible and swear that the Hobbt deal was crony capitalism?

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  14. Redbaiter (8,878 comments) says:

    “tell me red, would you put your hand on the bible and swear that the Hobbt deal was crony capitalism?”

    I’m astonished that anyone could see it as anything else.

    Dime, if we are going to have a real and functional economy, crony capitalism has to be defeated, everywhere it is found. You can’t be selective and say it is OK here but not here. You can’t have the government picking favourites. (Remember Jimmy Anderton and Sovereign Yachts?)

    Crony capitalism, no matter how it might appear on the surface is always the enemy of freedom and real economic success.

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  15. RRM (9,924 comments) says:

    Crony capitalism… is always the enemy of freedom and real economic success.

    Spoken like a true dogmatist. There is no God but God, and Mohammed is the prophet of God.

    Tell me, who is the Hobbit deal an enemy to?

    Who lost something, so that they might win?

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  16. dime (9,972 comments) says:

    Remember Jimmy Anderton and Sovereign Yachts? – nope. before my time or i was overseas!? when was it?

    i can see the case that its crony.. in a minor way though. i think sometimes you just do whats best for the country. what the best business deal is.

    of course, its a slippery slope and we probably will pay the price when the left use it as a precedence do justify some abomination of a deal.

    ive weighed it up, i would have rolled the dice as JK did.

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  17. mandk (993 comments) says:

    Redbaiter,
    Waht you don’t get is that the film industry is extremely footloose.
    The Gov’t was investing to keep our film industry here.
    Aus used to have a film industry, but it has virtually disappeared.
    Let’s not allow that to happen here.

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  18. thedavincimode (6,759 comments) says:

    I’m astonished that anyone could see it as anything else.

    That will surprise no one. So, the Government paid to make sure the film came here – bought it if you like. That’s crony capitalism? The Government bought something? Really? That’s it? You should spend less time with your Palin doll, draw back the curtains and see what the real world looks like.

    Without Government intervention, there would have been no infrastructure set up in this country. We have sweet fuck all by way of a capital base in the private sector and sweet even less fuck all by way of domestic purchasing power. Without Government interventions in respect of initiatives that can create economic growth in sectors that lack foreign capital and/or have no natural attraction to foreign capital, and/or are incapable of being leveraged to attract domestic capital, we would have fuck all. But then, you might be happy to allow a perfect free market to evolve over another hundred years. That doesn’t solve the problems of today. In all your facile ranting and raving, you steadfastly ignore that we are fuck all sitting down at the end of nowhere. We are not in North America or Europe. We exist on the edge of the planet as far as the rest of the world is concerned. We grow grass, get visitors and export minerals and we aren’t smarter than anyone else. That’s it. Stop being a tit.

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  19. Ultima (29 comments) says:

    “$34m deal sees Hobbit stay in NZ

    http://www.nbr.co.nz/article/key-comes-through-the-hobbit-will-be-made-nz-132198

    You’ll find that the money is for marketing campaigns that Warner will do with Tourism NZ, not as subsidies for making the films in NZ. As with any marketing budget, it should be compared with the potential revenue from the product, in this case $billions. Anyway, when the agreement was signed the production was for 2 films, but its now 3 films, for the same marketing budget for Tourism NZ. Win win for NZ inc.

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  20. Viking2 (11,471 comments) says:

    Interesting, because just this weekend my contacts tell me that tourists have stopped in the last month.

    Perhaps some right now stats would be more appropriate.
    You don’t keep earning a living from your last sale, you keep earning from the next one. Rest on your comfort zone at your peril.

    What are the forward bookings and how do they compare.
    That’s what we should be considering.

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  21. Redbaiter (8,878 comments) says:

    “Without Government intervention, there would have been no infrastructure set up in this country.”

    A lie, but even if it was true-

    Film making is a massive step further than infrastructure.

    Thanks anyway for at last dropping your “right wing” mask.

    Great to see some far left honesty for a change, even if it is so disagreeable.

    (BTW, was your inability to use paragraphs one of the additional reasons you were moved on ?)

    Oh, almost forgot-

    “we aren’t smarter than anyone else.”

    We sure won’t get that way if you guys keep governing.

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  22. Paulus (2,627 comments) says:

    Took a 45 years in New York rellie there the other day, and with the publicity films, and a great one on YouTube, he could not believe that this was real until we went.

    Everything was Wow. Never been to New Zealand before.

    Planning to come back with family next year, as amongst other things could not believe New Zealand was for real – and NO tips ?

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  23. dime (9,972 comments) says:

    Viking2 – of course tourist numbers are lower at this time of year. doesnt mean they cant still be up compared ot this time last year.

    tourist season is september – march.. give or take a few weeks either side

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  24. Redbaiter (8,878 comments) says:

    “The Gov’t was investing to keep our film industry here.”

    Mandk, if you like the film industry so much then you invest in it.

    You have no right to force other people to invest in an industry just because you happen to have an affection for that industry.

    All industry should stand or fall on its own. Including the film and tourist industries.

    We do not need politicians interfering, and using tax payer money to make themselves popular.

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  25. Kea (12,841 comments) says:

    This is small change compared to the money thrown at the rugby world cup. And unlike rugby, it may have some pay off. Globally few people really care about rugby but every one loves movies.

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  26. Redbaiter (8,878 comments) says:

    “This is small change”

    Like all progressives, Kea sees the principle as of no importance.

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  27. Kea (12,841 comments) says:

    Kea is pragmatic and likes good outcomes Reddy. If the money invested results in a positive return, then it is worth considering. The alternative is the ideological zealot approach you prefer, which focuses on the idea not the outcome in the real world. This is why considered folk regard you as a crank.

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  28. thedavincimode (6,759 comments) says:

    Russell

    You bear a striking similarity to your namesake Russell Norman in terms of capital-raising in that you seem to think that it is just a matter of pulling it out of your arse. That doesn’t work.

    When this country underwent its European colonisation, there was nothing here. The settlors weren’t in fact in a position to just drag schools, roads, telecommunications, hospitals a postal service, railways and electricity out of their arses. The fact that there is no need for central government to either own or monopolise that infrastructure 150 years later doesn’t mean that investing in it at the time was a bad decision, or that Government shouldn’t ever invest in other types of infrastructure of a more contemporary nature. I haven’t noticed the laissez faire free market economy turning South Pacific islands the size of Singapore and Hong Kong into thriving bastions of the free market economy. Gee, why could that be? Because they have fuck all and are in the middle of nowhere?

    No, filmmaking isn’t infrastructure and congratulations for noticing because I didn’t think you would. But our tourism industry is valuable capital infrastructure and the Hobbits against the background of the LOR tourism, subsidised by the marginal tax revenues arising from the filming being here, is a cheap and easily leveraged opportunity to add the value of NZ’s tourism brand. The fact that Government investment in a postal service is no longer warranted doesn’t mean that Government doesn’t have a role in promoting other types of infrastructure that lack organisation and capital to take advantage of opportunities that arise in a short time-frame. The fact that domestic industries themselves haven’t got it together does not necessarily mean that Government shouldn’t involve itself; particularly where the fiscal outcome is an increase in annuity tax revenues from the sector concerned.

    Why don’t you just stick to bile. It suits you better.

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  29. Dave Stringer (188 comments) says:

    I make that $103 million is extra GST revenue to the crown – I wish I could get tht kind of return on investment from my pension fund!

    Gud on yer Nats, excellent investment anagement.

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  30. mandk (993 comments) says:

    Redbaiter,

    Private investment made sure the film got made, but it could have been made in NZ, Aus, UK, Romania and many other places.

    Public investment ensured it got made here, and the return on that investment has been huge and growing.

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  31. Redbaiter (8,878 comments) says:

    Kevin, that some pen pushing fake journalist who makes a living from kissing John Key’s arse should lecture me on capital raising is the height of ignorance and arrogance. I’ve helped raise and spent more capital in millions than you have had hot showers you dirty little bludging state tit sucking commie.

    Whatever the state of NZ it would have reached the point we are at today without slimy politicians interfering and picking winners and buying themselves electoral support and cuddling up to crony capitalists. The myth that we couldn’t have done it without them only exists in your mind because it is a mind crippled by your limited political perspective, (probably) a result of being a state tit sucker all of your life.

    Your argument for state intervention in industry is self defeating for there is always the simple rule that if it was such a good investment then it should have been financed by the private sector. If tourism profits from film making then Jackson should have gone to the tourist industry for part of the financing.

    The whole thing is a con, and that these cons work on so many otherwise intelligent people is to a large extent because of the statist propaganda put about by life long tit sucking commies like you, who with your intent to disseminate government lies are basically the same people that Hitler used to convince voters he was good for Germany, or that Mussolini used for the same purpose in Italy.

    And another thing, the purpose of industry is not to provide revenue for the government, it is to increase the living standard of every NZer. So your crap about increases in tax revenue is just more of the same bigoted uninformed uneducated anti-freedom statist BULLSHIT.

    You’re just like Tom Jackson, cloaking yourself in self importance and preaching for statism and fascism (for that is really what crony capitalism is) and communism and all the while pretending to provide us poor peasants with enlightenment when really you’re nothing but an uncivilised ignorant simian fool.

    What you need to do is just shut the fuck up, get out of the way and get yourself a real job. Milking cows. Picking fruit. Driving a bulldozer for a mining company. If you really cared about the state of this country you’d do it without me telling you to. But you won’t you’ll just go on robbing the taxpayer and sucking off the state tit and producing cynical lies for a corrupt statist political faction. A disgusting blight and drain on our society.

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  32. Kea (12,841 comments) says:

    Someone should tell Ranting Red that John Key might know a thing or two about money himself.

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  33. Redbaiter (8,878 comments) says:

    “John Key might know a thing or two about money himself.”

    He’s a foreign exchange trader you dullard. You should teach yourself something about what that entails. That said, whatever it entails, it does not make him any less a progressive or a socialist.

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  34. Kea (12,841 comments) says:

    So what are you Red ?

    Fact is Mr Key’s ideas appear to be working and he is still popular. Not an easy thing to do in a left leaning country. Your own ideas would never have such success and you would never see the reigns of power in any democratic society.

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  35. The Scorned (719 comments) says:

    Red is quite right…and Kea and others are falling for the economic fallacy of “That which is seen,and not seen”.

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  36. Kea (12,841 comments) says:

    Kea is falling for nothing. If something pays off it is a good investment. End of story.

    I do accept the point that central government should keep its nose out of these things, but I give credit where it is due. Red is blinded by ideological dogma.

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  37. Jack5 (5,137 comments) says:

    The film industry, Ngai Tahu, Sanitarium – tax bludgers all. Go get ‘em Reddy.

    As for Kea at 1.52:

    …Kea is pragmatic and likes good outcomes …

    And at 3.10:

    …Kea is falling for nothing…

    I thought it was only royalty who spoke about themselves in the third person. Delusions of grandeur?

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  38. thedavincimode (6,759 comments) says:

    Calm down Russell, you’ll pop your corset. Your blustering rant only reinforces the fact that you simply have no idea what you’re talking about.

    You’re rather out of your depth here, so why not paddle back to the shallow end where you’ll feel more at home hating people and because the water is warmer, you’ll feel less of a need to compensate for your shortcomings in the reproductive department.

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  39. James Stephenson (2,180 comments) says:

    And another thing, the purpose of industry is not to provide revenue for the government,

    So the problem with the government taking less tax upfront with the likelyhood of more tax via GST in the final analysis is what?

    The government’s job is to create an environment where private investors can create industry and employ people, which is exactly what they’ve done for one specific industry which is able to move easily around the globe. It’s not really any different from creating a specific tax regime for a geographic region where you’d like investment (special enterprise zone for Christchurch anyone?)

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  40. Redbaiter (8,878 comments) says:

    “The government’s job is to create an environment where private investors can create industry and employ people,”

    That is not the government’s job. That is just socialist crap.

    The govt’s job is to keep records maintain law and order and run the defence forces.

    EOS.

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  41. labrator (1,850 comments) says:

    So the problem with the government taking less tax upfront with the likelyhood of more tax via GST in the final analysis is what?

    If we replace “Hobbit films” with “Solid Energy” does the argument still apply? Seems because we “won” in this instance, the baby is thrown out with the bathwater.

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  42. thedavincimode (6,759 comments) says:

    Dear Abby
    I’m an economic guru and who believes that the free market can instantly solve any problem even where there is nothing. For example, if I was in charge of the Chatham Islands, my free market policies would turn the Chathams into a global economic powerhouse.

    My problem is that nobody listens to me. Worse, people are now saying I’m stupid and insinuating that I’ve got a small willy.

    What should I do?

    Yours sincerely
    Russell of Tauranga

    PS Why haven’t you replied to my last letter you pussy-rubbing rug-munching progressive bitch?

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  43. Redbaiter (8,878 comments) says:

    What an oily disgusting coward you really are Kevin. With nothing to offer on any subject but sneers and derision. So typically Progressive.

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  44. Kea (12,841 comments) says:

    Redbaiter (3,274) Says:

    June 5th, 2013 at 4:08 pm
    What an oily disgusting coward you really are Kevin. With nothing to offer on any subject but sneers and derision.

    Let no man say Red does not have a sense of humour :)

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  45. thedavincimode (6,759 comments) says:

    Dear Russell of Tauranga

    Sadly, it seems that you are in fact stupid. My advice is to stop trying to prove it. Have you thought of taking up a hobby?

    Regarding your previous letter and the prevalence of homosexuals in our society, another correspondent happened to be at the bus stop when you bent over to pick up your Gold Card. Your letter failed to mention that the strain of bending over and, what I’m sure was only a momentary lapse in your concentration, resulted in a somewhat prolonged and resounding social indiscretion.

    The moans you heard weren’t in fact moans of desire, but rather were expressions of distaste at not only your lapse, but the evident pleasure that you derived from it. I’m reliably informed that this unfortunate and, by all accounts, well-lubricated shock wave, would have cooled the ardour of even the most passionate supporter of homosexual marriage.

    It appears that what you have interpreted as a lust-filled eyes staring at your behind was in fact shocked disbelief that your incontinence pads could cope with the magnitude of what might best be described as an unsanitary personal lahar. What’s more, after you caught your bus, there appears to have been speculation to the effect that having regard to the very evident bulk of your “man pads”, it was possible that the nature of your condition was so severe as to have been man made! :wink: Perhaps you should wear looser fitting trousers to disguise this condition. (By the way, that prospect and your propensity to denigrate others with epithets referencing arse-kissing and vaseline, raise the possibility that you might be hiding something from yourself. Have you considered talking to someone about this?)

    I’ve found your correspondence most informative. Please don’t write again.

    Warmest regards
    Abby

    PS The questions I’ve put to you are for your own personal reflection. Please don’t construe them as an invitation to further correspondence. Best, A.

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  46. wreck1080 (3,917 comments) says:

    100 years from now, people will be coming to New Zealand to see hobbiton.

    By then, it may even be an amusement park :)

    The long term spin-offs from large spending projects are immense and often invisible to those outside the project circle.

    I for one have been involved in IT projects driven by large corporations and the downstream benefits for certain people can continue for a decade or more even after the official project completion.

    I see the hobbit film as a bit like that.

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  47. Jack5 (5,137 comments) says:

    Wreck 1080 posted at 6.08:

    …100 years from now, people will be coming to New Zealand to see hobbiton…

    PR! Come off it! Do people now go to America to see the site of Birth of Nation or Citizen Kane? Do people go to Italy now because of Bicycle Thieves? Do people go to Leningrad or Moscow because of Eisenstein’s October or Ivan the Terrible. No, though they may go for reasons that may include history of the events that are the subject of the films.

    A film buff on a visit to Odessa would certainly look for the steps that featured in Eisenstein’s remarkable Battleship Potemkin. But very few people would make the journey to Odessa just to see these steps.

    Time will tell whether the Hobbits are classified with these great classics, but even if they are, so what? Make a 25 hour flight to NZ to look at old film settings? I doubt it.

    Subsidies for the film industry are a case of a Government picking winners. The only defence, IMHO, is that it may help tourism, which seems to be the one industry politicians from far left to centre right seem happy to subsidise. It’s still picking winners.

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  48. wreck1080 (3,917 comments) says:

    “PR! Come off it! Do people now go to America to see the site of Birth of Nation or Citizen Kane? Do people go to Italy now because of Bicycle Thieves? ”

    I was being a little bit tongue in cheek , i thought maybe the bit about the amusement park may have given it away :)

    However, I do recall travelling around Hawaii and we did make a stop at places featuring in movies , one being 40 years old or so.

    Even if we just got 5 years tourism mileage out of it you’d have to claim it as a success right? It has been 10 years since the Lord Of the Rings movie and people still come for that so it has been an amazing investment by the government.

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