King of the World (Again)

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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

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

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In December producer John Davis (I, Robot; AVP: Alien vs. Predator) screened Avatar at a special VIP showing in Hollywood. "I saw how 3D could improve a film," he says. Davis hopes to persuade Fox to shoot a remake of the 1963 movie Jason and the Argonauts in 3D. Transformers director Michael Bay and Star Trek director J.J. Abrams have said they would like to convert their franchises to 3D, too, though Paramount has not yet agreed.

Not every movie will warrant the investment that 3D demands. For the foreseeable future it will remain a high-risk, high-reward medium that excludes Woody Allen movies, and Sandra Bullock ones, too. But for directors and producers of action and fantasy films, 3D has to be a consideration. "What Avatar showed is that there is still a reward in taking the risk to make a large-budget film that will bring people out of their homes," says former Fox studio chief Bill Mechanic, who produced the 3D Coraline in 2009.

Vincent Pace has had a steady stream of inquiries since Avatar was released. His company rents out its 3D cameras and associated gear to other directors at a rate of $1.4 million to $3 million per film, depending on the difficulty of the shoot. Director Joseph Kosinski is using one for Tron Legacy, which is due out in December.

Pace says advertising agencies have also expressed interest in using the camera rigs for commercials, and networks are eyeing it for 3D TV sports broadcasts. "The perfect storm has kind of swept by," says Pace. "We're quite excited that what we embarked on 10 years ago is being accepted in a very commercial way." Pace says he and Cameron own the patents on the gear and that, given the buzz generated by Avatar and the coming wave of 3D TVs, it won't be long before they recoup their initial investment and start to reap a profit.

As Cameron anticipated, Avatar has theater owners rushing to equip more of their cinemas with 3D technology. "Avatar has put an exclamation point on what we have done and what we are going to do," says Michael V. Lewis, CEO of RealD, a Los Angeles company that supplies 3D screens, projectors, and glasses to theaters. Of the 38,000 screens in the U.S., only about 3,600 are currently 3D-ready. Lewis says RealD plans to add an additional 5,000 screens in the next 18 months.

The director has emerged from his 12-year odyssey far more powerful than after his previous box-office record-breaker. Even with credit still tight, money almost certainly will flood his way. And like any good businessman, Cameron will put his development costs to work with brand extensions. In other words, look out for that Avatar sequel.

Grover is Los Angeles bureau chief for BusinessWeek. Lowry is a senior writer for BusinessWeek in New York. White is a reporter for Bloomberg News.

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