Amazon has made the surprise decision to move production of its $1bn-plus Lord of the Rings series from New Zealand to the UK, rejecting tens of millions of dollars in incentives to shoot the TV show in the same location as the blockbuster films. Amazon, which four years ago paid $250m to secure the TV rights to JRR Tolkien’s works after founder Jeff Bezos demanded a Game of Thrones-style hit for its streaming service, chose to film the first series in New Zealand after competitive bids from around the world. It is understood that the Tolkien estate had been keen for the series to be shot in the UK, the land that inspired JRR Tolkien’s original books, although did not have any right to determine the TV production’s location. Amazon decided that the TV series, which is based in Tolkien’s Middle-earth before the events and characters viewers are familiar with from the Lord of the Rings trilogy of books, would be shot in the same location as director Peter Jackson’s blockbuster quartet of films which have grossed more than $1bn at the box office. “We want to thank the people and the government of New Zealand for their hospitality and dedication and for providing The Lord of The Rings series with an incredible place to begin this epic journey,” said Vernon Sanders, vice president and co-head of TV at Amazon Studios. Production will continue in New Zealand until June next year with the premiere of the first series, which has reportedly cost $465m, scheduled for 2 September 2022. The production has not been without controversy in New Zealand. Earlier this year, the government had to defend its deal with Amazon Studios following criticism that it was ‘bending over backwards’ for one of the richest companies in the world, by offering it multimillion dollar rebates to bring its production to the country. The government was informed of Amazon’s decision to pull out of New Zealand on Thursday. The economic development minister Stuart Nash said it was disappointing, especially for the local film industry. Amazon said that it will not look to take advantage of further rebates and incentives offered by the government in exchange for choosing to shoot in New Zealand, which have reportedly amounted to well over $100m to date. “Amazon Studios advised that post-production work on season one will continue in New Zealand until June 2022,” said Stuart Nash, New Zealand’s economic development minister. “However, season two will be filmed in the UK as part of a strategy by the studio to expand its production space and consolidate its footprint in the UK.” The UK offers attractive rebates for TV series that cost more than $1m an episode to shoot and is the home of many high profile Amazon productions. Shows including Good Omens and Sex Education are shot in the UK. One additional factor is the strict Covid policies that continue to operate in New Zealand, which Jacinda Ardern, the prime minister, said would mean the country’s borders would effectively remain closed until the end of the year. Any time a member of the cast or crew left the country – roughly half the cast is from the UK – they would have to quarantine for 14 days and there are limits on how many people can leave the production at any given time. Amazon will still receive a 20% tax credit from the New Zealand government for its first season, but is forgoing an additional 5% it could have received for future series shot. It is estimated that Amazon Studios’ qualifying local expenditure totals around NZ$663.74m so it could be eligible for a NZ$132m rebate under the 20% rule. “We do not intend to actively pursue the season one memorandum of understanding five per cent financial uplift with the New Zealand government or preserve the terms around that agreement,” said Albert Cheng co-head of Amazon Studios. The New Zealand Film Commission chief executive David Strong said the Amazon production had employed nearly 2,000 New Zealanders. “It’s a shame and I feel for everyone who has put their hearts into this production. Season two was expected to begin later in 2022, so our role now is to work hard to keep the Kiwi screen sector employed.” Strong said the Studio’s departure will open up avenues for other international productions to shoot in New Zealand.