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James Cameron is finally following up that movie about the boat accident. His new project, Avatar, is an epic, 3-D sci-fi film about an ex-Marine on an inhospitable planet where humans can only survive by projecting their consciousness into genetically engineered bodies (a.k.a. ”avatars”). The people of earth want to exploit the planet’s natural resources, of course, causing the inhabitants to revolt and a war to break out. The rub for the protagonist, named Jake (played by newcomer Sam Worthington), is that he’s fallen in love with a native (Zoe Saldana), forcing him to choose a side in the battle. Fox has gone out on a limb, granting Cameron a whopping $195 million to tell the tale — but hey, what’s a couple hundred mil for a guy who racked up 11 Oscars with his last full-length feature?

ENTERTAINMENT WEEKLY: For a while now, you’ve been debating between two different projects: Avatar, which is an original screenplay that you wrote, and Battle Angel, adapted from a series of Japanese comics. So why pick Avatar?
Well, Battle Angel and Avatar were being developed at the same time. The thinking was that we’d be using similar technology to create either one or both of those films. It was little bit of a horse race there for a while to see which one was going to be done first. The way I pitched it to Fox was, ”We’re doing both these films.” The order is relatively arbitrary, because we’re making an investment in a methodology and a technical infrastructure that could produce both. But I ultimately had to choose which one was going to be first, and I began to run into a bunch of script problems with Battle Angel, because I was synthesizing down these graphic novels. There are 10 of them. It was the kid in the candy store problem — too many good ideas and no story. So we went through five drafts and didn’t solve them. So I switched to Avatar and we started developing that. Then, of course, a great script came in on Battle Angel! Which is a good problem to have, because I had two great projects, either one of which the studio would be happy to go ahead with. I would say it was August or September of 2005 we decided to push ahead with Avatar. Believe it or not, it was that long ago.

What was the deciding factor?
We did a test of the performance-capture techniques we wanted and needed to use to make this film — a live action, real-time, director-centric performance-capture process. In other words, as the actors perform, I’m able to see in the monitor not only what they might look like as their CG character, but in the CG environment we’ve created, and direct them accordingly. When we did the test, we chose Avatar, just because it seemed like the easiest one to get going for a test, for a lot of reasons.

This is an original screenplay, correct?
That’s correct.

How did you come up with this story?
Well, my inspiration is every single science fiction book I read as a kid. And a few that weren’t science fiction. The Edgar Rice Burroughs books, H. Rider Haggard — the manly, jungle adventure writers. I wanted to do an old fashioned jungle adventure, just set it on another planet, and play by those rules.

Your premise reminded me a lot of the Edgar Rice Burroughs John Carter, Warlord of Mars series.
It’s definitely got that feeling, and I wanted to capture that feeling, but updated. To be certain, I wanted a film that could encompass all my interests, from biology, technology, the environment — a whole host of passions. But I’ve always had a fondness for those kind of science fiction/adventure stories, the male warrior in an exotic, alien land, overcoming physical challenges and confronting the fears of difference. Do we conquer? Exploit? Integrate? Avatar explores those issues.

How long has this been in your head?
I wrote an 80-page treatment 11 years ago. We were working from the treatment in designing the world and the creatures and so on. I wrote the script the first four months of 2006.

Is it true you have developed a whole culture and even a whole language for the aliens in this movie?
Absolutely. We have this indigenous population of humanoid beings who are living at a relatively Neolithic level; they hunt with bows and arrows. They live very closely and harmoniously with their environment, but they are also quite threatening to the humans who are trying to colonize and mine and exploit this planet.

Sounds like you’ve crafted a story with a lot of political resonance.
Only in the very broadest sense of how we as a Western technological civilization deal with indigenous cultures; we basically supplant them. If not in an active, genocidal way, then in a passive manner. They just kind of wither away. Our impact on the natural environment, wherever we go — strip mining and putting up shopping malls. Now, we’re extending that to another planet.

How long did it take to brainstorm the language? Did you work with people on that?
There’s a guy named Paul Froemer who I was lucky enough to encounter a year ago. He’s the head of the linguistics department at USC. I talked with a number of linguistics experts, but he was the one who kind of got the challenge. He said, ”We’re going to beat Klingon! We’re going to out-Klingon Klingon! We’re going to have a more detailed and well thought out language than Klingon!” He’s been working on this for a year. It began by riffing off things in the treatment, but from there, it went to how sentences would be constructed, and what the sound system would be. It would have to be something that was pronounceable by the actors but sounded exotic and not specific to human languages. So he’s mixing bits of Polynesian and some African languages, and all this together. It sounds great.

What was the tipping point in terms of realizing that this movie was technically possible?
Looking at what Peter Jackson was able to do with Gollum, and then King Kong. And Davy Jones [from Pirates of the Caribbean] — all these examples of compelling photo-realistic, fully CG characters, in a photo-realistic world. I don’t think many people are aware that a lot of the jungle scenes in King Kong were actually CG. They did a lot with miniatures, but toward the end they were doing a lot of the jungles in CG.

Was the number of theaters that could exhibit a 3-D movie also on your mind in terms of when to go forward with this?
Absolutely. There’s been a sense for me over the past two or three years of, ”Well, if not this year, then it’s okay next year for me to start a movie, because the longer I wait, the more theaters there will be,” and I want to be able to land in 1,000, 1,500 theaters — as many theaters as I can — in digital 3-D. Because I’ve been working with our 3-D cameras over the past six years. We’ve refined them. They work great. They work perfectly. I love working with them. I don’t want to go back to shooting on film. I don’t want to go back to shooting in 2-D, so for me it was just a question of waiting for the right moment. In fact, I think I’ve actually waited too long. Everybody else is out there making animated films and putting them in 3-D and this is such a big picture. We’re not going to land in theaters until summer of ’09. But I think we can be sure that we will have a lot of 3-D screens by ’09 at the rate they’ve been increasing.

How did you convince Fox to do this movie?
Walking them through the process. It’s a good thing we actually had built a functional stage environment that was producing usable footage. When they came down and saw it they went, ”Wow, maybe this is the way to make one of these movies, where you have so much more of a sense of control and confidence as you’re making the pictures.” Because I’ll be able to literally turn over cut sequences as we go, right from the get-go. Right from the time we start with the actors, the studio will be able to see it. So instead of spending an enormous amount of money, and then after the money is all spent, still not having scenes with a rough sense of what they really like because the special effects process hasn’t really even begun yet, they’ll be able to see what it looks like as we go along.

To be clear, Fox was financing all this development, correct?
Correct. We were on a week-to-week funding scheme, where we continued to develop and do budgets and do the F/X breakdowns. But while we were doing that we were actually doing capture on a weekly basis. I would do a day, or two days, or three days of motion-capture work. We were actually working out the methodology. So I was able to bring them down and tour them through the facility and show them all the design work and really give them a sense of how much preparation this film had under its belt. I think they felt that yes, this is a very daunting project, but that it was also the most intricately planned project since… well, since ever. [Laughter]

When did you invite them down and give them that tour and show them what you had been doing?
l would say that was a couple months ago. And then the conversation evolved into casting. We were going to make this big expensive film — were we really going to do it with a cast of unknowns? Relative unknowns, not stars. Not Tom Cruise. So we had to get our minds around that. Or they had to. I was already pretty happy with our choices.

And you had already made those choices.
Well, we had already cast a few actors. What we were talking about was the lead, the male lead. I had found Sam Worthington fairly early in the process. He really hung in there and trooped with us for a long time. He came in for a couple screen tests, and kinda hung on, hoping. So I have to give him credit for that. It was a very exhaustive process. We looked at a lot of people. There were people who were championed by the studio and I even screen-tested them. Ultimately, when I showed them Sam against their champions, they was no comparison.

Was there any concern at the studio about the potential budget for this, given their experience with you on Titanic?
Absolutely… A lot of the last six months was about figuring how to make this a very, very finite process that’s not prey to all these pitfalls of these big effects movies. So a lot of scrutiny was spent on the contracts with Weta [the New Zealand-based F/X facility], a lot of scrutiny on the budget, the methodology, on testing and so on. As the process went on, the confidence level increased that the number was not going to change.

The reported figure is $200 million. Is that accurate?
The reported figure is supposed to be $195 million — that’s what our budget is. Is that figure going to drift by a couple percentage points up or down? Probably. I don’t think you can do any big project and land exactly on budget. But I’m hoping to come under. Really shock everyone.

That would shock everyone.
But the history of the last six years is that that’s all I’ve done. I did 44 hours of television — Dark Angel — that was done on budget and on schedule. I did four major documentary projects that were subject to Atlantic and Pacific storms and all these exegeses of major ocean expeditions, and they were all done on budget. I’ve spent really the past few years working on our methodology for this type of big, mainstream effects film, and doing it within parameters, which is something Hollywood typically isn’t very good at… A film like Titanic, we had a six-month shoot. At the end of those six months, because we had been working flat-out, six days a week, very little of the picture was cut, there was very little to be turned over to the F/X guys in terms of finite counts, and so all of the F/X got jammed into the last four months of making the movie. That’s why we didn’t make our release date and why we went over budget in effects, because we had to divide it up amongst 14 vendors to even attempt to make our date. In direct contrast to that, I have almost two and a half years on this film, and we’ve already been doing performance-capture for four months, and the F/X guys are already working… Our live action shoot is just 31 days — it’s a fifth of Titanic, all on stages, all interiors. We’ll do all that in New Zealand. All the sets are designed now. We don’t even begin site construction until May.

When will you start shooting those 31 days?
Late August. Might drift to September.

How excited are you to be back making movies like this?
Oh yeah! I always assumed I would come back and be that guy again. I didn’t think it would take this long. I was having too much damn fun doing expeditions. And frankly, I’ve already been working on this movie pretty exclusively for a year and a half. So I feel like I’ve already been doing it. We’re just announcing it now; it feels like I’ve been part of the Manhattan Project and we’re going public.

Will you still do Battle Angel?
Yeah. In fact, this film has a very long tail on it, about a year and half of post-production. Basically, after I finish my job as a director, after directing the actors and editing a film and turning over a cut, I think it’s very possible that I can slip a good six months of pre-production of Battle Angel into that period.

Will Fox be involved?
That’s a Fox project, as well.

When you go down to New Zealand, will you be bunking with Peter Jackson?
Peter and I have gotten to be friends over the past couple years. He’s a 3-D fanatic, like I am, and he loves the effects, and he loves the big show, and he loves fantasy filmmaking. I’m going to be relying on all the infrastructure he’s built down there, from the live action soundstages to the Weta workshop, where they’re going to make all the props and sets. It’s going to be, ”Thanks for building all this, Peter. Now can you move out for a year and let me use it?”

For more about Avatar, check out the upcoming issue of Entertainment Weekly, on stands Jan. 12.