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If there is any on-location shooting in Venice, then the budget will need to be higher (I'm guessing). But they probably can get away with a few key shots there and do the rest in the Mandalorian immersive green screen thing. So the middle option seems like the best one.

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Oh, 100%.

Especially as most of Venice is fairly closed off walkways and alleys, which can be easily built on backlot/soundstages without needing that much greenscreen work.

I did see that unlike the first two Branagh did, this is shooting at Pinewood Studios (which Disney owns the lease on for the next few years).

Suggests a greater willingness to bring him and this kind of 20th Century adult drama closer into the fold? Maybe?

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