With 'Hobbit,' New Zealand fuses film and tourism

Hollywood is also looking to China, where the government is building expensive movie facilities and offering access to a vast market in exchange for a stake in American studio pictures.

New Zealand does have language in its favor, since the crews speak English. Still, for Mr. Key and others, the primary challenge remains linked tightly to Mr. Jackson: how do you build a significant and enduring economic sector from a local business dominated by one man?

"You can't base an industry solely on one person," said Mr. Key. "That's a very vulnerable business strategy."

Smaller filmmakers say the priority given to big productions like Mr. Jackson's has hurt them. In Auckland, where an independent film culture once thrived, Mr. Jackson is acidly referred to as "Sir Peter," emphasizing the honorific he received in 2010.

Mr. Jackson, 51, disagreed with the notion that New Zealand's film industry rested squarely on his shoulders. "If I started to think like that my head would explode," he said. "I can't take responsibility for everyone's employment."

He does, however, employ thousands. His Stone Street Studios include four soundstages, two sophisticated enough to allow him to construct a rushing river inside, as "Hobbit" scenes required. A few blocks away, Weta Digital employs a thousand graphic artists, technicians and support staff. Also nearby is the 300-employee Weta Workshop, which builds props, designs film-related merchandise and fills private orders for rich collectors- like a full-size working Panzer tank.

The collection of companies takes up so much space it has been given a nickname: Wellywood.

As "Lord of the Rings" tourism peaked in recent years, about 6 percent of international visitors to New Zealand, or roughly 150,000 people, cited the films as a reason for coming; 11,200 said it was their only reason.

As Mr. Key explained, "Peter is a very, very big fish in quite a small tank."

The New York Times