Sir Peter Jackson is being cast as Gandalf in a row about payment for actors in the new Hobbit films - warning dark, dark forces are bringing devastation and mayhem to Middle Earth.

The reaction to the dispute has also been dramatic - with some media backing Jackson.

Jackson has been such a phenomenal success financially and creatively his Kiwi fans in the media assume he must be right.

We've looked like a bunch of orcs, in my opinion.

The international boycott of The Hobbit has harmed the already troubled film, executive-produced by Jackson for Warner Bros and New Line.

Blacking of the movie by Aussie union Media Entertainment and Arts Alliance (MEAA) has diminished New Zealand's film business with agencies like Spada, New Zealand Film and The Film Commission.

We still have the skills to make good movies but we have lost the reputation - prized by the Hollywood studios - of having a weak actors' union.

And that is the true value of Jackson's warning that Hollywood studios will go to Eastern Europe if costs go up.

From an industry that depicts New Zealand as uniquely talented and creative, it's a reminder that our film future is more prosaic. It's about staying cheap.

There is a lot at stake. But did Jackson and his four page attack on the MEAA help - branding the Australians as union bullies?

According to Jackson the MEAA "is using The Hobbit in an attempt to widen it's membership, and power within the New Zealand film industry".

"I can't see beyond the ugly spectre of an Australian bully-boy, using what he perceives as his weak Kiwi cousins to gain a foothold in this country's film industry.

"They want greater membership, since they get to increase their bank balance," Jackson said.

It has been claimed Actors' Equity, the union run by MEAA, has about 200 members in New Zealand.

I'm not sure about the massive financial boost in the unlikely event of a few hundred joining the actors' union.

If they did, it would surely be a sign something was wrong.

Let's face it, union membership won't help you get a job in Jackson's studio.

Clearly there is ideology involved at both sides but organised labour is part of the entertainment business. Actors unions are powerful and have international tentacles.

The question is whether this union push against Jackson has come out of the blue - as one New Zealand producer claims.

Or could it have been foreseen?

And is Jackson right to claim some sort of nationalistic mission for limiting the union role in his studio?

And a question for the union - apart from not talking to the union, what else was Jackson doing wrong hiring actors?

Are the small number of actors involved being paid less on the Hobbit than they would in other territories?

Alas, after that flurry of activity earlier this week, Jackson and the MEAA have returned to their respective caves.

They will be planning the next scene.

GOVERNMENT BACKING

It's a dispute that may have repercussions for the New Zealand economy, with film and TV repeatedly given star treatment by successive governments.

The Government is supporting Jackson. The Council of Trade Unions pointed to the role of Arts Minister Chris Finlayson delivering Jackson a Solicitor General's opinion that collective contracts demanded by the union would not be allowed under New Zealand law.

The CTU points out there was no discussion with the union.

You can argue Finlayson was supporting an important export industry but the Government has also taken sides in an industrial dispute.

The film economy is a lot different to when Jackson made Lord of the Rings from 1997 to 2003.

The New Zealand tax loophole that paid for a big part of LOTR's budget is long gone.

But there are other subsidies such as the Large Budget Screen Production Grant with 15 per cent rebate on New Zealand spend - part of a bid to big studios to make movies in this country.

But the exchange rate for the New Zealand dollar against the greenback is much higher than it was a decade ago and that adds to the cost of making movies here.

SURVEY AWAY

Print media have commissioned research company Nielsen to produce a radically improved version of its newspaper and magazine readership surveys.

The new surveys - offering qualitative information such as how readers were engaged with newspapers or magazines - will be phased in from May next year, with the entire system available from the end of 2011.

Nielsen is the incumbent for readership surveys. Executive director Stuart Jamieson said the move - which follows a lengthy study and competitive tender - was the most significant change to surveys since they began.

Traditional masthead recognition would remain part of the survey.

But it would fuse New Zealand household expenditure monitoring to the print readership database. The survey would also include different questions.

The contract follows more than three years of planning by a group encompassing print media and ad agencies.

SHHH - SECRET SQUIRREL

Auckland's swank Northern Club has a quaint approach to being mentioned in the media.

You might remember the club was aghast to be mentioned as the venue for Dave Fane's ill-fated comedy cock-up about Jewish people, and is being very careful to make sure it doesn't happen again.

Media entering a function for accountancy firm Kensington Swan had to sign a form saying that the club would not be mentioned "in any form of media available to the public". It leaves media to decide how to describe the venue that dare not speak its name.

PAY'S THE WAY

Nobody can accuse the Government of giving TVNZ special treatment in free TV's battle with pay TV.

State-owned internet service provider Orcon is taking a key role in the new internet TV service iSky delivering content, and is one of the ISPs offering uncapped data for iSky.

Orcon - owned by Kordia - is building a nationwide content delivery network that will support iSky and is set to go live before Christmas.

Orcon will continue with its free downloads of TVNZ ondemand but it is now closely aligned with Sky and the pay TV sector.

That's a big move as pay TV accelerates ahead of free-to-air and with internet downloads expected to play a bigger role in the future of TV.

Orcon and iSky will be competing with the content from TiVo-linked Caspa by Hybrid Television Services, co-owned by TVNZ and the Australian Seven Network and backed by Telecom.

It's a good win for Kordia - which is about to lose a big part of its income from terrestrial analogue television after digital switch over in the run-up to 2013.

Sky has partnered with Orcon, Vodafone, Slingshot, Woosh, Xnet and Farmside to create un-metered broadband for iSky.

Sky TV chief executive John Fellet says Telecom has not ruled out Telecom being a partner offering uncapped broadband. Uncapped broadband will be key for IPTV allowing consumers to download movies and TV shows without using up all their data allowance.