In a world as complicated as the Avatarverse, for a movie, the first point would be deciding just what it wants to say, I think. The first movie, in my opinion, should have its focus on Aang and his fight with his destiny: is he the Avatar? Does he want to be the Avatar? Is there any out for him if he's NOT the Avatar?
That said, here's more or less how I'd picture the movie. N-not in actual screenplay script since, you know. That would take months and months and MONTHS. Sort of a summary, I guess, of the screenplay I'd write. In case you've forgotten, I have no intention whatsoever to see the movie.
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The movie would start the way the cartoon does, with Katara explaining the world, possibly even with the way the animation was set, or even showing different benders in each of their nations, to start world building. Four nations, each nation has its kind of bender, there has been a war. And as she's about to explain about the Avatar (with a highlighted figure with glowy eyes), she gets splashed, a scroll she had been studying getting wet as well. This gets her mad and she yells at Aang, who's playing with Appa or Momo, with Sokka making maps.
The movie, I think should start mid-res, with Aang, Katara and Sokka already in their way to the North Pole, because if not it'd be much harder to summarize the whole season. So the movie should have them resting on an island so that we can properly establish their personalities. Katara tells Aang off since he's not taking seriously his Waterbending lessons, Aang being the dorky happy kid and telling Katara that there's still time before the North Pole, and Sokka doing the thing where he attempts to be the Mature Guy when he's really dorky, too (not to confuse him with the Comedic Relief, please: there SHOULD be proof of his scientific mind somehow).
Now, in a movie that should be, tops, two hours, puuushing perhaps two and a half, there needs to be a lot cut out, and have not more than three major conflicts, in my opinion. The ideal would be two, I think, but I'll put the three I think would fit with the movie. The ones I thing that would translate the best - and would help the most to show the world's situation, as well as the story - are:
a) Kyoshi island: possibly the first island where they rest for a while before we see the first of Zuko and the firebenders. This would also help bring Suki to the story, since in the second movie she SHOULD be. We should start seeing here that Aang has issues with being the Avatar. Perhaps he's compared to Kyoshi, or even better, after that we see Aang discussing with Roku, Roku telling him about the Comet and how they only have a short time left. Aang should be secretive about this and Katara and Sokka should feel that there's something wrong without actually knowing yet. Anyway, fight, the trio+Momo+Appa fly away.
b) The prison for the Earthbenders: this would help show much more how the world has been oppressed by the Fire Nation. Here they find Zhao for the first time, and boy is he pissed that they are fighting inside his previously perfect prison and helping the Earthbenders break free. This would be the moment where a distraught Aang (who, remember, is a pacifist, for not mentioning, still a kid) yells at Katara and Sokka that he doesn't want to be the Avatar, and the brothers will find out that one hundred years ago Aang run away from the Air Temple because he didn't want to be the Avatar, but there was a storm so he and Appa got frozen. At this point, one of them gets injured. Possibly Sokka, I think, so they rush to the North Pole. This creates a lot of tension between Katara and Aang.
c) And yes, the North Pole gets to be the set for the Big Important Fight for the last part of the movie. Something I didn't mention before is that with the focus having to be on Aang and with the time measured, Katara SHOULD be, from the beginning of the movie, a more than capable Waterbender. I'm not talking bestest ever, but yes on she being one of the better fighters on the movie 'til this point and it showing. So then we get to the North Pole and she gets demoted to healer, one of the few skills she didn't know she could do with her Waterbending, Aang gets whupped by the Waterbenders and Sokka wakes up to Yue healing him. Yes, I know Yue wasn't a healer on the series, but work with me here.
(Something that should be worked between these scenes is the ever so rich Spiritual World in Avatarverse. I already mentioned Roku there, so that helps, but there needs to be more. At some point BEFORE they reach the North Pole, someone should explain how the Waterbenders get their power from the moon while the Firebenders get it from the sun, in such a way that doesn't come to obvious. Perhaps with a children's song that Aang's singing, mentioning that back then he used to have friends from the four Nations. This would of course have to be made up, but it's possible. Aang is a legend already. Adding more legends to him would only set him apart in the way that Aang didn't want and which made him run away). This would be needed to make the bargain for suspension of disbelief easier. Perhaps even Appa should be a Spirit of sort.
So by then we have an unhappy Katara, and unhappy Aang... and a happy head-over-heels Sokka, who is really enjoying his time with Yue. Yue can explain how she has blessed by the moon when she was a baby as she shows the physical representation of the Moon and the Ocean (aka yin and yang fishies!), and Katara and Aang can reconcile a bit, Katara explaining how much she hates being told she can't be a Waterbender and Aang offering to practice with her, one of the first times he offers to practice something besides Airbending without Katara having to make him. At some point they get discovered by Pakku, who starts scolding them... and then it's when the alarm sounds that the Fire Nation is attacking.
So the battle. Zhao decides to go and kill the Moon fishie because, as the song told us before, Waterbenders can't bend when there's no moon. Iroh says that messing up with the spirits is a Bad Idea. Zhao convinces Zuko to follow him, or something like that.
I'll take this chance, since I've not mentioned Zuko much before, that I see two ways to go with him through the first movie (since it's me writing this, we'll go with there being three movies if I had the moneys to produce this). I'm not quite sure which one would be better, but since this is just a What If, here are both of them:
1) The first movie shows practically nothing from his POV. Let the whole POV be from the people fighting against the Firebenders, with perhaps a bit, just a little bit of insight about why Zuko is the way he is. A small flashback of his Agni-kai, perhaps. Close ups to his scar. Iroh telling him that he doesn't have to choose this. Something like that that shows us that while at the moment he is the bad guy, there's more to Zuko than what our brave heroes think. This would work if we consider that by the second season of the show, one of the most important things is showing Zuko growing up and we have much more of his POV.
2) The movie has some scenes in between the world building with Zuko and Iroh. My only worry with this is that it could end up being choppy, considering how I'm setting this first movie mostly to show the conflict against the Fire Nation. We get a scene of the Agni Kai, and more of Iroh (which is never a bad thing). Things like that.
I think you can probably guess which one's my favorite (yes, number 1, for those of you wondering) but, as I said before, both are doable and both could work well.
SO. ANYWAY. BACK TO THE BATTLE. Everyone's fighting! At some point Katara saves Pakku, Aang is using water and air to fight at the same time, and Zhao finds Sokka and Yue at the pond with the Fishes, Zuko and Iroh there, too. Zhao tells Zuko to kill the Moon fish and make his father proud. Iroh tells Zuko not to do it. Zuko hesitates and Zhao decides to kill the fishie himsef.
SO. THE MOON DIES. The world turns gray, Waterbenders stop being able to bend, the Fire Nation seems about to win everything. The Ocean fishie gets really, really, REALLY angry. And since the Ocean fish is a Spirit, Aang Feels It. And the rage of the Ocean Fish is so big that Aang kicks into the Avatar state. I should remark that we shouldn't have seen Aang use the Avatar state before this. The Avatar State is a huge Deus Ex Machina that, if pulled out at another moment of the movie, would pretty much render the story and pace useless, killing disbelief a painful death. 'Man, if he can do that, then why he didn't do it before?'.
Anyway, Spiritied!Aang proceeds to destroy Fire Nation ships. At this point Zhao probably ran away from the pond, Zuko watching horrified what the death of the Moon fish caused. Iroh probably says how without the Moon the balance of the world is ruined. And then Yue remembers how she was blessed, so she says goodbye to Sokka and sacrifices herself so that the Moon fish can be alive again.
The moon has color again. The Waterbenders go back to kicking Firebenders asses. Spirited!Aang sees Zhao running away and the Ocean gets him. An extremely dizzy Aang is left standing on the ice of the South Pole while the Ocean Spirit takes Zhao.
Iroh and Zuko go away when everyone's distracted, Zuko saying something about how there's so many things he doesn't understand, Iroh saying that he's still young and the fact that he's questioning himself is already a step on the right direction. They probably cut their knot-tops here.
Back to the heroes of the movie, Pakku apologizes with Katara and acknowledges her as a teacher. Aang starts accepting that he's the Avatar and that he does want to help stop the war. And Sokka mourns mourns, but he's also telling them that they should get ready to go to the Earth Kingdom ASAP.
The movie ends how it started. With Sokka and Aang having a mock fight to see who should hold Appa's briddle, there's a slow zoom on Katara, and her voice again explaining the four nations, the four kinds of bending, and how the Avatar is the only one who can control the four, how the Avatar protects the peace of the world.
But this time she's not interrupted while she says that she thinks that Aang can actually save the world.
AND END FIRST MOVIE.
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I KNOW THIS ISN'T PERFECT. I'm still learning how to do scripts and screenplays, but this is, more or less, the live action movie that I would have liked to see for A:TLA.