The Hobbit: Inside Hollywood's global sausage factory

Where do our movies come from? Sometimes it's a question you might not want answered.

Peter Jackson's The Hobbit: An Unexpected Journey made its world premiere last week (it will be on U.S. screens from December 14), and it's sure to be a global hit. But for the last two years, The Hobbit has caused bitter divisions in New Zealand, where it was filmed, over a labor dispute and accusations of animal cruelty.

It's a story most Americans probably don't know, according to Dr. Carolyn Michelle, a researcher at the University of Waikato in New Zealand, who studies how people respond to films.

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"Generally, outside of New Zealand, there's a lack of awareness about these issues," she says, "though people in the industry [in the U.S.] seem to know what's going on."

Michelle just completed the first stage of a study to measure global reactions to The Hobbit. She jokingly calls her project "the one research study to rule them all" (if you don't get the pun, you need to brush up on your Tolkien). She says her team got over 1,000 responses from 75 different countries.

The latest Hobbit controversy came when four wranglers — professionals who care for animals during production — claimed that 27 animals died because the movie's producers kept them on a farm full of "death traps," like bluffs and sinkholes. One of the wranglers, Johnny Smythe, claims he was dismissed for talking publicly about the abuse meted out to horses, chickens, goats and sheep, according to a report in the New Zealand Herald. The filmmakers say Smythe fabricated the accusations only after being fired for cause.

In a statement to Latitude News, Warner Bros. and New Line Cinema questioned "the timing of this misinformation — given The Hobbit's imminent release." And on his Facebook page, Peter Jackson defended the film's treatment of animals and criticized the activist group People for the Ethical Treatment of Animals (PETA), which helped publicize the accusations.

But a spokesman for the film told the Herald that two horses did die unnecessarily, and that producers spent thousands of dollars upgrading the animals' facility during production. In an email to Latitude News, The American Humane Association — which supervises the treatment of animals during filming and had observers in New Zealand — called the injuries and deaths on the farm "needless and unacceptable." It has asked that its powers of oversight be expanded so that it can monitor how animals are treated off set, as well as on.

Making movies can be a dangerous business, for animals and people alike. Last year, Warner Bros. settled a lawsuit by an Australian stuntman who suffered permanent brain damage after an accident on the set of The Hangover 2 in Thailand.

On set, little fellowship for the film

Perhaps this begs a question: Why film The Hobbit in New Zealand?

Yes, Peter Jackson is a Kiwi, and the stunning landscape of this beautiful country is a cinematographer's dream. But it's also possible that financial considerations played a role in the decision to shoot Down Under. Unlike their counterparts in the U.S., actors in New Zealand have no collective bargaining rights and their treatment on set is governed by guidelines, not binding conditions.

When the actors tried to unionize in 2010, Warner Bros. threatened to move production elsewhere. As a result, the International Federation of Actors — which includes several American acting unions — instructed its members to boycott The Hobbit if it was taken to another country.

But the government of Prime Minister John Key believed the loss of the film would hurt New Zealand's economy and, in an unusual move, forced legislation through parliament that prevented the actors from becoming employees, rather than independent contractors. According to a report in The New York Times, the New Zealand government also agreed to pay a total of $109 million towards the film's production and marketing costs, at a time when the government is tightening its belt elsewhere (Warner Bros. has budgeted around $500 million of its own money for The Hobbit and two sequels).

"The government was really keen to keep the production in New Zealand," Dr. Michelle explains, "to give employment opportunities to New Zealand workers and the industry, and preserve a lot of tourism potentially flowing from the film."

A coup for New Zealand and a boon to its economy, but some actors felt they had been mistreated on set. The Dominion Post reports that Phil Dawkins, vice president of the group Actor's Equity New Zealand, told a conference in Wellington that actors were "verbally abused, denied shelter, and not... offered blankets or warm drinks after long shoots in the water."

In further comments carried by The Hollywood Reporter, Dawkins complained that "New Zealand is the only English-speaking nation on the planet where professional performers ply their trade at the mercy of their lords and masters. And they are supposed to do this feeling nothing but enormous gratitude for the fact that there is even work available."

In a recent interview with Radio New Zealand, Peter Jackson hit back at what he saw as strong-arming by the actors, and said the threat to move The Hobbit to another country was very real. "There's no way [the studio] is going to spend an extra cent," Jackson explained, "for the sentimental reason of doing it because that's where Peter lives."

He added that New Zealand must continue offering tax incentives and other goodies if it wants to remain a Hollywood destination: "If you want to be in the game, you've got to be in the game."

But is playing worth the cost? In New Zealand, Dr. Michelle says public opinion remains divided. But die-hard fantasy fans may be reminded of a moment from another popular series when the spymaster Varys says to Lord Ned Stark: "Why is it always the innocents who suffer most, when you high lords play your game of thrones?"

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