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Where will Peter Jackson get the extra story to expand the Hobbit into three feature length films? If I remember correctly, the book was shorter than of any of the books in the Lord of the Rings.

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    The Hobbit describes a heck of a lot less than LotR. Reading the LotR trilogy, half of it is extremely detailed description, or extra non-plot dialogue. The Hobbit, since it was written for children, is pretty much solid plot. – Gabe Willard Oct 12 '12 at 19:13
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    He's just adding more walking and copter shots. – phantom42 Oct 12 '12 at 19:24
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From Wikipedia's article on the movie, under "Structure", bolding mine:

After his hiring in 2008, Del Toro confirmed the sequel would be about "trying to reconcile the facts of the first movie with a slightly different point of view. You would be able to see events that were not witnessed in the first." He also noted the story must be drawn from only what is mentioned in The Hobbit and The Lord of the Rings, as they do not have the rights to The Silmarillion and Unfinished Tales. Del Toro also added (before writing began) that if they could not find a coherent story for the second film, they would just film The Hobbit, stating "The Hobbit is better contained in a single film and kept brisk and fluid with no artificial 'break point'." By November 2008, he acknowledged that the book was more detailed and eventful than people may remember. He decided to abandon the "bridge film" concept, feeling that it would be better for the two parts to contain only material from The Hobbit

From Wikipedia's article on the movie, about the third film, bolding mine:

On Monday, July 30, 2012, Jackson confirmed plans to make a third film, turning his adaptation of The Hobbit into a trilogy. According to Jackson, the third film would make extensive use of the appendices that Tolkien wrote, to expand the story of Middle-Earth, and published in the back of The Return of the King. While not necessarily a "bridge" film, this story would bridge the gaps between The Hobbit and The Lord of the Rings.

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The answer is that they're going to use the story of the White Council vs the Necromancer (Sauron) and potentially other information, i.e. the story of Aragorn and Arwen, which occurred over the same period.

The direct quote from Jackson on the announcement of the third movie:

We know how much of the story of Bilbo Baggins, the Wizard Gandalf, the Dwarves of Erebor, the rise of the Necromancer, and the Battle of Dol Guldur will remain untold if we do not take this chance. The richness of the story of The Hobbit, as well as some of the related material in the appendices of The Lord of the Rings, allows us to tell the full story of the adventures of Bilbo Baggins and the part he played in the sometimes dangerous, but at all times exciting, history of Middle-earth.

Source via here.

So he's definitely using The Hobbit as well as material from the Appendices, which would include the explicitly mentioned "rise of the Necromancer" and "the Battle of Dol Guldur" featuring the White Council.

The original plan was for two movies, one of which was to contain The Hobbit and the second to contain the backstory (probably the story of the struggle against Sauron in those years - Sauron as the Necromancer, the White Council and Dol Guldur).

MGM is in early discussions with Peter Jackson to make two films. The first film would be a straight-up adaptation of J.R.R. Tolkien's prequel to The Lord of the Rings. And the second, he says, would be crafted using "footnotes and source material connecting The Hobbit with Lord of the Rings."

Source

Peter Jackson even commented that doing two movies for The Hobbit was a good idea before he was involved and again references the backstory of the White Council:

Reading about it on the Net, what interested me is the fact that [MGM is] talking about doing two Hobbit movies, which I thought was a much smarter idea than one. Not just for obvious financial reasons for the studios, but from a storytelling point of view, because one of the drawbacks of The Hobbit is it's relatively lightweight compared to LOTR. I mean, LOTR has this epic, rather complex quality to it, and The Hobbit, which was written some 10 or 12 years earlier by Tolkien as a children's book, is much more juvenile and simplistic. If they're seriously thinking about doing two, it makes it more interesting, because it allows you to expand The Hobbit. There's a lot of sections in which a character like Gandalf disappears for a while. From memory — I mean, I haven't read it for a while now — but I think he references going off to meet with the White Council, who are actually characters like Galadriel and Saruman and people that we see in Lord of the Rings. He mysteriously vanishes for a while and then comes back, but we don't really know what goes on. There's clearly lots of interesting politics happening concurrently with [Bilbo's] story, and doing two movies would allow you to explore a lot of those dark areas. You could make it feel more epic and more politically complicated.

Source

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