New Zealand companies are showing how useful drones can be in various situations from agriculture to film and television production.

Drones are changing the way films are made and movie mogul James Cameron is supporting more innovation in the emerging technology.

The top international filmmaker is throwing his support behind C-Prize, a Callaghan Innovation-led competition aimed at developing the unmanned aerial vehicle (UAV) sector and boost New Zealand's position as world-leader in the development of the cutting-edge technology.

The the C-Prize compettion was officially launched at an event in Propeller Studios, Miramar on Wednesday night.

LUCY NICHOLSON/REUTERS James Cameron.

Avatar director Cameron and producer Jon Landau both expressed interest in what the competition could do to help the film industry.

The blockbuster filmmaker said he supported the opportunity to improve UAV technology for use in filmmaking.

"I am starting to really like drones as camera platforms. Any improvements that can be made to make them more stable and quieter would enable them to be used for a wider variety of world class shots. This is what excites me about the C-prize; teams can develop technology to reduce noise, increase stability and track filming subjects. I look forward to seeing what people come up with."

Landau said New Zealanders' innovative nature and passion for filmmaking made this country the right place to launch such an initiative.

"I can't think of a better place to launch this technology challenge," he said.

NZ Film Commission head of international relations Chris Payne said drones were increasingly used in the film industry but also in TV and for music videos.

They extended the potential to be creative and the sky was the limit for users, he said.

New Zealand was at the forefront of innovation in the drone space.

The competiton was exciting both creatively and commercially, he said.

"It will enable New Zealanders to become leaders in design and gain revenue from IP."

At the Beijing International Film Festival commission staff met with world leaders in drone technology and opportunities to work with China in the drone space was a possibility, he said.

The New Zealand Film and Television School head tutor Sima Urale said drones were a wonderful filmmaking technology.

"They are growing more popular and although costly, are much cheaper than hiring a helicopter. They are definitely a fantastic development for the industry."

Film school technician Mark Jackson said although drones were not used at the school, many in the industry were using UAV technology more often and TV shows, such as travel programmes, had adapted to using them.

Filmmakers used drones for for long stretch flyovers in place of a camera dolly or a crane, he said.

Callaghan Innovation chief executive Dr Mary Quin said internationally, filmmakers were increasingly looking to use unmanned aircraft to help them tell their stories in innovative new ways.

Support from a prominent director like Cameron showed there was strong industry appetite for the initiative and major opportunities for Kiwi innovators and entrepreneurs seeking to commercialise world-leading UAV technology.

"The C-Prize is set to stimulate continued development of the UAV sector, commercialise high value technology products bred in New Zealand and stimulate a new generation of hi-tech entrepreneurs," Quin said.

The C-Prize

NZ-based students, innovators, and entrepreneurs are invited to solve technical challenges including improving the ability of UAVs to record and reproduce high-definition sound, operate in rough weather, and track objects for augmented reality and visual effects purposes.

The overall winner gets $50,000 plus an expenses-paid trip to exhibit at the 2016 National Association of Broadcasters trade show in Las Vegas.