Peter Jackson The Hobbit
Julian Broad for Variety

The Dec. 17 debut of “The Hobbit: The Battle of the Five Armies” marks both an end and a beginning for Peter Jackson.

It represents the culmination of his 16-year, six-film J.R.R. Tolkien marathon — an outsized success in duration, execution, visual-effects wizardry and overall popularity. No director in history has maintained tighter control over the creative direction of a global film franchise, which so far has amassed close to $5 billion in ticket sales alone.

But after bringing his Middle-earth spectacles to the masses, the world’s most famous Kiwi is ready to downsize and return to his low-budget roots: The 53-year-old director-producer-screenwriter is working on adapting several true stories about his native country, with his longtime partner Fran Walsh, that he says will be similar in tone and scope to his 1994 murder tale, “Heavenly Creatures.”

“We really feel a bigger urge now to not continue with another Hollywood blockbuster for a while, but to go back and tell some New Zealand stories,” Jackson told Variety in an interview just hours before the London premiere of his final “Hobbit” installment last week.

He’s also toying with virtual reality, and studying entertainment opportunities in the emerging technology that has primarily been used to help e-tailers provide 3D ad-friendly versions of cars and couches to consumers.

Julian Broad for Variety

“We’re right on the cusp of a major upheaval of the entertainment world once that technology really kicks in,” he says. Jackson will devote a year or two on the project, but he’s not sure if the best fit will be for films or videogames.

The filmmaker also continues to tinker with the bigscreen experience, such as his embrace of higher frame rates. When the first “Hobbit” film debuted in 2012, some critics said that at 48 frames per second, the images looked like something out of TV soap operas. So Jackson improved the grading and color-timing of the subsequent pictures, and the furor died down.

Both the frame-rate experiment and the polarizing reaction raise larger questions about the future of the film business.

“Films 100 years ago were 16 frames per second, no sound, no color,” Jackson says. “So if you look 100 years ahead, I don’t know what films will be, but I can guarantee they won’t be 24 frames per second and 2D. The audience is falling away, and you have to compete with all the other forms of entertainment. So to get people into the cinema, we need to experiment to survive.”

The studios are interested in whatever road Jackson takes.

“All of us at New Line and Warners would like to continue being in business with Peter — and plan to,” says New Line president Toby Emmerich.

Carolyn Blackwood, senior exec VP of strategy and operations for New Line (and an exec producer of the “Hobbit” movies) adds that Jackson can pretty much write his own ticket. “No question we consider Peter part of our family. But there’s no ‘when is the next one, when is the next one?’ That’s not how he works best.”

Their commitment is understandable. The five Tolkien films accumulated $4.8 billion at the worldwide box office and spawned merchandise, DVDs and ancillary sales ranging from international TV to Legos worth, conservatively, an estimated $500 million, including sale of the first trilogy in 2002 to Turner/TBS/the WB for $150 million for 10 years of showings. The mobile videogame “The Hobbit: Kingdoms of Middle-earth” has grossed more than $100 millon since its November 2012 release.

As he prepares to walk the red carpet for the London premiere, Jackson sounds sleep deprived. The filmmaker had been working 36 hours straight to add finishing touches to the film that concludes the “Hobbit” trilogy.

He’s proud of the movie, and notes that it has a different tone than its predecessors. “I wanted to give it the pace of a thriller,” says the filmmaker. “I wanted to make it sharp and fast rather than the epic-quest type pace.”

It also benefits from a higher body count. “I know it’s a primitive thing to say, but you can get so much more emotional power when you have a main cast member with a death scene,” he says.

The sprawling shoot, which encompassed 266 days of principal photography and 10 weeks of pickups, ended on a particularly bittersweet note for Jackson and his collaborators.

”We’ve got a big cast, so these farewells would come upon us fairly regularly,” he says. “The hardest ones were the guys who had been around for so long.”

None was harder than that of Ian McKellen, whose final shooting scene as the wizard Gandalf consisted of a quiet moment where he sits with Martin Freeman’s Bilbo after a massive battle. The emotion of the moment inspired Jackson to cut the dialogue at the last minute so as to let the actors’ reactions speak for themselves.

“Just to say to Ian — you’re never ever going to put this beard on again, you’re never ever going to wear the robes and the hat,” recalls Jackson. “I did find that pretty tough.”

For McKellen, the sense of finality was leavened with deja vu. “It was emotional, but I’ve been saying goodbye to Gandalf since the year 2000, and I keep getting called back,” he jokes.

Aside from being a technological innovator and renowned director, Jackson has another claim to fame: No other filmmaker has single-handedly boosted a country’s economy.

According to the New Zealand tourism board, international arrivals to Wellington jumped 87% in the 12 years since the first “Lord of the Rings”; the Hobbiton movie set, on NZ’s North Island, has attracted 700,000 visitors since opening in 2003, with 250,000 of those in the past year.

Since the first “Lord of the Rings” began pre-production in 1998, Jackson has helped the local economy — and Kiwi filmmakers — by building five companies, including Weta Digital, outside Wellington, which collectively employ approximately 1,000 people year-round (though more than 4,000 were needed for the three “Hobbit” films).

Aside from Jackson’s films, including “The Adventures of Tintin,” which he produced and Steven Spielberg directed, they have handled complex projects like “Avatar” and mini-budget local pictures, and serve one of Jackson’s avowed goals: to increase production in New Zealand.

Jackson was at the center of the country’s tax breaks for filmmakers, which now offer a rebate of up to 20%, and his team is working with the New Zealand Film Commission to find fresh ways to bolster production. The members of the Wellington team are affectionate toward their boss and protective of his privacy. Even the location of his office is kept confidential. Many of the key workers today were there when the companies started up. “It’s a passionate group of people coming together to tell a single person’s story, not to make a business deal,” says design house Weta Workshop’s Richard Taylor.

Park Road Post’s Cameron Harland, general manager at another one of the five Wellington-area firms, credits Jackson’s overall vision for the ventures’ success. “One commonality is Peter — and he’s a filmmaker. That’s important. It’s not about an accountant making decisions.”

For a game-changing moviemaker, Jackson is low-key and private, choosing to live in the same house as he did in the 1980s. His usual attire — pants cut off below the knees, an untucked shirt and bare feet — reflects his down-to-earth personna.

“He personifies the New Zealand culture: humble, friendly and full of can-do ingenuity,” says Mark Ordesky, co-topper of the multimedia company Court Five, who oversaw production of the three “Lord of the Rings” movies when he was an executive at New Line.

Jackson and Walsh, who’ve been together since 1987, and have a son and a daughter, are very protective of their family’s privacy. Walsh doesn’t like to be photographed, and declined to appear on any DVD extra for the previous Tolkien films.

Born in Wellington and raised in the nearby coastal town of Pukerua Bay, Jackson was the only child of immigrant parents from England. His mother was a factory worker and later, housewife; his father a payroll clerk. Jackson grew up a film fan, and as a young boy learned about editing, special effects and makeup by experimenting on his own by making shorts on the family’s Super 8 camera. He attempted to remake “King Kong” — his favorite movie — using stop-motion models. He also shot a World War II drama called “The Dwarf Patrol,” producing his first special effects by poking pinholes in the film stock to approximate gunshots.

At 16, Jackson dropped out of school, and for seven years worked as a photo engraver for the local newspaper. Two years in, he bought himself a 16mm camera and began shooting a film that later became his first feature, 1987’s “Bad Taste,” a science fiction horror comedy about hungry alien invaders.

While Jackson is warm to reporters, the press is not a priority. This is one of the few interviews he’s giving on behalf of “The Hobbit,” and Variety’s visit to Wellington was one of the rare times a major publication has been allowed into his lair.

Jackson would rather directly interact with his fans. He interrupted post-production work on “Hobbit” in late July to fly to Comic-Con in San Diego, where he headed a panel discussion. Afterward, he spoke with those in the audience until he had to be dragged away by his handlers.

“He knows who his fans are and how to reach them,” Blackwood says. “He is very reverential of their needs.”

Jackson is hands-on, and has a keen eye for detail, according to Blackwood. He makes decisions as both a fan and filmmaker. “He has huge technical skills, but he’s also a creative artist,” she says. “Those things are not mutually exclusive.”

Actors who work with Jackson say he is a quiet but authoritative presence on set. He likes to make changes on the fly and has been known to act out scenes in order to demonstrate what he wants.

“There are times when so much existed in his head that he would need to articulate physically what he saw, so he’d embody a hobbit or a different character,” says Elijah Wood, who played Frodo in the “The Lord of the Rings” movies. “It was always helpful and incredibly charming, and it gave us a laugh.”

Richard Armitage, the dwarf leader Thorin Oakenshield in “The Hobbit,” notes that discussions about character tended to occur during production rather than before it. “When I wanted to talk, he was open to it,” Armitage says. “He prefers to have conversations as we’re filming, and to make tweaks and adjustments in a way that feels organic.”

Melanie Lynskey made her feature film debut at 16 in “Heavenly Creatures,” and says Jackson assumed a paternal role while guiding her through the psychological terrain that her character in that true-life murder mystery required.

“Peter made sure I could go to emotional places without losing my mind,” she says. “I always felt protected and supported. At the end of each scene, we had a process where I’d check in, and he’d make sure I was feeling OK.”

Jackson says he likes to have fun on sets, and at the same time establish a tone of tranquility. “I think that if I’m calm, everyone else has got to be calm,” he explains.

When he leapt from microbudget to megascale films, Jackson never seemed flustered by the pressure, Ordesky says. If studio or international executives got nervous, Jackson would repeat his mantra: “One job at a time, every job a success.”

His early films, splatter comedies like “Bad Taste,” “Meet the Feebles” and “Dead Alive,” offer no clues that the director would be able to tackle Tolkien, whose work he discovered as a young adult.

In 1998, Jackson came to New Line to pitch the idea of simultaneously filming two “Lord of the Rings” movies. Ordesky, then-president of the studio’s specialty division, Fine Line, had been a fan of “Bad Taste.” Jackson gave a verbal presentation for “LOTR” followed by a 30-minute video showing how technology had advanced enough to create huge army battles, a digital lead character like Gollum, and convincingly show a 6-foot-tall actor next to a small Hobbit.

New Line’s then-chairman and CEO Bob Shaye was so impressed that he proposed three films instead of two, and the company made a series of deals with overseas distributors to fund the trilogy. Jackson brought his tech savvy to the productions, and his ingenuity for making a budget look bigger. Actor Elijah Wood joked at the time that they were making “the biggest-budget indie film of all time.”

McKellen remembers shooting the movies in an old paint factory that had been converted into a studio, with no sound-proofing and no heat. “It was either very cold or noisy,” McKellen recalls. “And it was 10 minutes from where Peter and Fran live; it felt like making a home movie.”

The “Hobbit” trilogy — which cost $700 million to make (as opposed to just over $300 million for “LOTR”) — presented fresh complexities. The original plan was for Jackson to produce two movies, with Guillermo del Toro directing. But del Toro exited in 2010 when legal negotiations kept delaying a production start. “It was a big maze to navigate,” says New Line’s Blackwood. (Del Toro did not respond to a request for an interview.)

Multiple parties had, or have, a stake in the movies, including MGM (which was going through a financial crisis that eventually led to its bankruptcy), the late producer Saul Zaentz and Bob and Harvey Weinstein. As complex as that seems, it’s really a simplified version of the web of intrigue that delayed production on “The Hobbit” trilogy. (Go to Variety.com for Ted Johnson’s story on the trilogy’s legal tangles.)

When del Toro left, Jackson was wary of returning to the world of orcs, dragons and dwarfs, but it became clear he was best positioned to assume the reins.

“He felt it was important that the movies get made,” says Ken Kamins, Jackson’s longtime manager. “He felt a responsibility to New Line and Warner Bros. and to the crew and team in New Zealand.”

Jackson acknowledges the reluctance he felt originally, fearing he might be repeating himself. But, he discovered his concerns were unwarranted. “The scenes were different, the pages were different. I was able to find fresh things.”

The filmmaker says his confidence has increased with each “Hobbit” film, an attitude duly noted by Orlando Bloom, who plays the elf warrior Legolas in five of the movies. In fact, he says, Jackson appeared to be more laid back on the “Hobbit” films than he was while making the earlier trilogy.

“He was really enjoying it,” Bloom notes. “There was a lot of pressure on him during ‘Lord of the Rings’ and a lot of treading water. … He seemed more at ease during ‘The Hobbit,’ knowing that he had more power, and that there was more faith in him.”

While critical reaction to the new installment has been largely positive, it was more mixed on the first two. Oscar voters also have cooled to Jackson, after handing “The Return of the King” 11 statues in 2003, including best picture, director and adapted screenplay.

“I feel lucky to have the Oscars I got, so I don’t live in the hopes of getting more,” Jackson laughs. He wouldn’t mind, however, if the new film gets awards attention for the actors — and particularly the below-the-line crew.

“Their work has advanced in the 10 years (since ‘LOTR’),” says Jackson. “And hopefully with the third film, people will see more of the technical side.”

Jackson himself has his hands full with his fresh focus on New Zealand, overseeing his Wellington companies and mentoring local filmmakers.

Nevertheless, with all this going on, there remains the lingering question of whether the final chapter on Tolkien has been filmed. There’s a lot more material, including short stories, but they are tightly controlled by the Tolkien estate, which isn’t keen on more movies.

But what if things change, and the Tolkien properties become available for future filming. Would Jackson be interested?

“If I had to start tomorrow, I would say no, because I definitely would appreciate a break to clear my head and get my little New Zealand stories done, which is where my passion and my heart is heading now,” the director says. “But ask me in two or three years, and I’d probably say yes. It would be hard to see another filmmaker go into this world, because I certainly have an emotional ownership of it.”

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