James Cameron and Peter Jackson are the kings of the CGI world. Cameron, of course, directed Titanic, the highest-grossing movie of all time--which he says he'd make with no ship if he were filming today. Jackson was the guy behind bringing Middle-earth to the big screen in the Lord of the Rings trilogy. Now they are back with Avatar and The Lovely Bones, two of the most-hyped films of the holiday season. We asked them about their new films and how technology is changing Hollywood. Excerpts:

CAMERON: So how's the road trip been on The Lovely Bones?

JACKSON: It's all right. Not too bad. Having a harder job getting over the jet lag than I normally do, but never mind. Getting older, I guess. I'm in . . . Berlin.

CAMERON: Ha, ha! You had to think about it for a minute!

JACKSON: I did! I'm flying to Paris as soon as this phone call is over. So we're talking about technology and movies?

CAMERON: People often ask us about the future of filmmaking because we've both been innovators in the last few years, creating cutting-edge stuff that gets widely or narrowly adopted. I think the simple answer is that filmmaking is not going to ever fundamentally change. It's about storytelling. It's about humans playing humans. It's about close-ups of actors. It's about those actors somehow saying the words and playing the moment in a way that gets in contact with the audience's hearts. I don't think that changes. I don't think that's changed in the last century.

JACKSON: There's no doubt that the industry is in a weird position. It's not just Hollywood--it's international. The loss of the independent distribution companies and the finance companies, and the lack of ability to get medium-budget films these days. The studios have found comfort in these enormous movies. The big-budget blockbuster is becoming one of the most dependable forms of filmmaking. It was only three or four years ago when there was a significant risk with that kind of film. Now, especially last summer, we saw blockbuster after blockbuster be released, and they all had significant budgets and they're all doing fine. It almost doesn't matter if the film is a good film or a bad film, they're all doing OK. They've lost the ability to have that happen with a low-budget movie and with midrange-budget movies.

CAMERON: But they've also lost the courage to make, frankly, a movie like Avatar, which is a blockbuster-scaled movie not based on prior arc. All the blockbusters of the last four years, like Transformers, Harry Potter, Spider-Man--they're all films based on other films or part of a franchise. The idea of making a film of that scale that's a unique piece has been lost. In the meantime, we have all these increases in technology. And there's no clear way to pay for these blockbuster movies in the old traditional way. It's not clear that the technology will come down in price in the near future.

JACKSON: People are holding on to the idea of lowering the price. The vast majority of the CGI budget is labor. Unless everything goes to China or Eastern Europe in the sweatshops, that sort of approach, labor is never going to go down. It's only going to go up.

CAMERON: Because computers don't create beautiful images. People do. Down at your place in Wellington [New Zealand], we had 800 people working on Avatar for the past six months.

JACKSON: The ones that are conscious anyway.

CAMERON: I'm sure there was a big night at the Wellington pubs a few days ago when they turned over their last shot.


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