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Director Peter Jackson first came into contact with The Lord of the Rings when he saw Ralph Bakshi's 1978 film. Jackson "enjoyed [the film] and wanted to know more."[5] Afterwards, he read a tie-in edition of the book[6] during a twelve-hour train journey from Wellington to Auckland when he was seventeen.[7]

In 1995, Jackson was finishing The Frighteners and considered The Lord of the Rings as a new project, wondering "why nobody else seemed to be doing anything about it".[7] With the new developments in computer-generated imagery following Jurassic Park, Jackson set about planning a fantasy film that would be relatively serious and feel "real". By October, he and his partner Fran Walsh teamed up with Miramax Films boss Harvey Weinstein to negotiate with Saul Zaentz who had held the rights to the book since the early 1970s, pitching an adaptation of The Hobbit and two films based on The Lord of the Rings. Negotiations then stalled when Universal Studios offered Jackson a remake of King Kong.[8] Weinstein was furious, and further problems arose when it turned out Zaentz did not have distribution rights to The Hobbit; United Artists, which was in the market, did. By April 1996 the rights question was still not resolved.[8] Jackson decided to move ahead with King Kong before filming The Lord of the Rings, prompting Universal to enter a deal with Miramax to receive foreign earnings from The Lord of the Rings whilst Miramax received foreign earnings from King Kong.[8]

When Universal cancelled King Kong in 1997,[9] Jackson and Walsh immediately received support from Weinstein and began a six-week process of sorting out the rights. Jackson and Walsh asked Costa Botes to write a synopsis of the book and they began to re-read the book. Two to three months later, they had written their treatment.[10] The first film would have dealt with what would become The Lord of the Rings: The Fellowship of the Ring, The Lord of the Rings: The Two Towers, and the beginning of The Lord of the Rings: The Return of the King, ending with the death of Saruman, and Gandalf and Pippin going to Minas Tirith. In this treatment, Gwaihir and Gandalf visit Edoras after escaping Saruman, Gollum attacks Frodo when the Fellowship is still united, and Farmer Maggot, Glorfindel, Radagast, Elladan and Elrohir are present. Bilbo attends the Council of Elrond, Sam looks into Galadriel's mirror, Saruman is redeemed before he dies and the Nazgûl just make it into Mount Doom before they fall.[10] They presented their treatment to Harvey and Bob Weinstein, the latter of whom they focused on impressing with their screenwriting as he had not read the book. They agreed upon two films and a total budget of $75 million.[10]

During mid-1997,[11] Jackson and Walsh began writing with Stephen Sinclair.[10] Sinclair's partner, Philippa Boyens, was a major fan of the book and joined the writing team after reading their treatment.[11] It took 13–14 months to write the two film scripts,[11] which were 147 and 144 pages respectively. Sinclair left the project due to theatrical obligations. Amongst their revisions, Sam is caught eavesdropping and forced to go along with Frodo, instead of Sam, Merry, and Pippin figuring out about the One Ring themselves and voluntarily going along after confronting Frodo about it, as occurs in the original novel. Gandalf's account of his time at Orthanc was pulled out of flashback and Lothlórien was cut, with Galadriel doing what she does in the story at Rivendell. Denethor attends the Council with his son. Other changes included having Arwen rescue Frodo, and the action sequence involving the cave troll. Arwen was even going to kill the Witch-king.[10]

Trouble struck when Marty Katz was sent to New Zealand. Spending four months there, he told Miramax that the films were more likely to cost $150 million, and with Miramax unable to finance this, and with $15 million already spent, they decided to merge the two films into one. On 17 June 1998, Bob Weinstein presented a treatment of a single two-hour film version of the book. He suggested cutting Bree and the Battle of Helm's Deep, "losing or using" Saruman, merging Rohan and Gondor with Éowyn as Boromir's sister, shortening Rivendell and Moria as well as having Ents prevent the Uruk-hai kidnapping Merry and Pippin.[10] Upset by the idea of "cutting out half the good stuff"[11] Jackson balked, and Miramax declared that any script or work completed by Weta Workshop was theirs.[10] Jackson went around Hollywood for four weeks,[11] showing a thirty-five minute video of their work, before meeting with Mark Ordesky of New Line Cinema.[12] At New Line Cinema, Robert Shaye viewed the video, and then asked why they were making two films when the book was published as three volumes; he wanted to make a film trilogy. Now Jackson, Walsh, and Boyens had to write three new scripts.[11]

The expansion to three films allowed much more creative freedom, although Jackson, Walsh, and Boyens had to restructure their script accordingly. The three films do not correspond exactly to the three volumes of the trilogy, but rather represent a three-part adaptation. Jackson takes a more chronological approach to the story than did Tolkien. Frodo's quest is the main focus, and Aragorn is the main sub-plot,[13] and many sequences (such as Tom Bombadil and the Scouring of the Shire) that do not contribute directly to those two plots were left out. Much effort was put into creating satisfactory conclusions and making sure exposition did not bog down the pacing. Amongst new sequences, there are also expansions on elements Tolkien kept ambiguous, such as the battles and the creatures.

Above all, most characters have been altered for extra drama: Aragorn, Théoden, and Treebeard have added or modified elements of self-doubt, whilst the personalities of Galadriel, Elrond, and Faramir have been darkened. Boromir and Gollum are (arguably) relatively more sympathetic, whilst some characters such as Legolas, Gimli, Saruman, and Denethor have been simplified. Some characters, such as Arwen and Éomer, have been combined with lesser book characters such as Glorfindel and Erkenbrand, and as a general matter lines of dialog have sometimes been switched around between locations or characters depending on suitability of the scenes. New scenes were also added to expand on characterization. During shooting, the screenplays continued to evolve, in part due to contributions from cast looking to further explore their characters.[11] Most notable amongst these rewrites was the character Arwen, who was originally planned as a warrior princess, but reverted back to her book counterpart, who remains physically inactive in the story (though she sends moral and military support).[14]

The most comprehensive study of the making of the films is The Frodo Franchise (2007) by film historian Kristin Thompson.[15]

In order to develop the fight and sword choreography for the trilogy, the filmmakers employed Hollywood's recognized sword-master, Bob Anderson. Anderson worked directly with the talent including Viggo Mortensen and Karl Urban to develop the many sword fights and stunts within the film.[16] Bob Anderson's role in the Lord of the Rings Trilogy was highlighted in the film Reclaiming The Blade. The documentary Reclaiming The Blade on sword martial arts also featured Weta Workshop and Richard Taylor, Lord of the Rings illustrator John Howe and actors Viggo Mortensen and Karl Urban. All discussed their roles and work on the trilogy as related to the sword.[17]