Image credit: James Cameron: Disney/Walden Media

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James Cameron

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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.