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Cover Story January 21, 2010, 5:00PM EST

King of the World (Again)

The inside story of how Avatar's James Cameron became the most powerful commercial force in the movie business—twice

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Cameron on the Avatar set: "I knew that if this failed my name would be dirt" Twentieth Century Fox/Kobal Collection

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Cameron with Landau (second from right) and Avatar cast at the Golden Globes Marcocchi Giulio/Sipa

Reasonable people can debate the artistic merits of James Cameron's work. Anyone for whom Arnold Schwarzenegger is a frequent muse is not likely to specialize in observing the human condition, unless it's in the aftermath of an exploding building or a run-in with a mercenary robot from the future.

What's indisputable, however, is that the Avatar director's influence extends far beyond his movie credits. More than George Lucas or Steven Spielberg, Michael Bay or Pixar (DIS), Cameron is the most important commercial force in modern film, and his vision for the future of the movie business is rapidly demolishing anything that gets in its way.

There are 1.64 billion reasons that Cameron is Hollywood's director of the moment—that figure being the mid-January worldwide gross of Avatar, the blue-aliened, 3D extravaganza that earned Golden Globes for best director and best dramatic picture. By the time you read this, Avatar may have passed the $1.84 billion mark set by 1997's Titanic, Cameron's previous feature and current holder of the title Highest-Grossing Film of All Time.

The money is impressive, but it only hints at Cameron's impact. It took Titanic several months to reach $1 billion worldwide at the box office. Avatar hit that milestone in 17 days. How? Because cinema operators say they can charge at least 30% more per ticket if a movie is in 3D. By persuading a huge number of filmgoers to put on the 3D glasses and pay more for the privilege, Cameron has changed the economics of the movie business. "Films can change people's minds, and the aim with Avatar was to introduce the industry to the possibilities of 3D," Cameron told Bloomberg BusinessWeek. "I decided, let's go make a movie that they can't ignore."

At 55, the man who declared himself king of the world at the 1998 Oscars has mellowed some. Cameron accepted his 2010 Golden Globes with a mix of humility and amazement. No one knows better than he how close Avatar came to not being made. Despite Cameron's track record for delivering large profits on big budgets, Twentieth Century Fox (NWS), which co-financed Titanic, hesitated to make an even riskier film that required the creation of a three-dimensional alien world. "I knew that if this failed my name would be dirt, but that's the nature of this business," says Cameron. "Every director knows that you can flame and burn like the Hindenburg, and do it very publicly."

With the studio balking, Cameron had to turn himself into an inventor-entrepreneur. Using his own funds, he developed the technology to bring Avatar to the screen, betting that what he saw in his head would be so visually persuasive that, ultimately, he could sell his souped-up camera rigs back to Hollywood at a potentially considerable profit.

Until Avatar came along, 3D movies—even such recent efforts as 2008's Journey to the Center of the Earth and 2005's Chicken Little—had the stigma of novelty. Now fellow directors, convinced their movies will attract a wider audience in 3D, are willing to pay Cameron to use his gear. Avatar 's technological wizardry also coincides with a big push by Sony (SNE), Panasonic (PC), and other consumer electronics companies to bring 3D into the home with a new generation of TVs and DVD players. "This is a game-changer," says Rupert Murdoch, chairman and CEO of News Corp. (NWS), which owns Fox. "If you create a film of this quality and make it an event, it shows that people will pay to come see it. We will see more [3D in] films and TV."

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