A24: A Start-Up Story
Brand loyalty to a film distribution company?! It’s possible, but only if you’re A24 | #001
Everything1 must start somewhere. For A24, the beginning was a small rented space in Manhattan. David Fenkel, who had previously been at Oscilloscope Laboratories, an indie film distributor which he co-founded, decided it was time to leave and start another film distribution company2. A new one. His former company would be handed over to executives within the firm, and though there was some chatter about Fenkel’s exit, it did not quite make the front page. Coverage about the new start-up (and that term seems appropriate here), was also limited. Variety ran an article that touched upon potential purchases in the upcoming Toronto Film Festival, but in general, there was no big splash. It was a quiet launch.
I started my career at USA Films, which became Focus Features. That company and the old Miramax and Fox Searchlight had a real brand and a hold on their audience. - John Hodges, Founder of A24.
Fenkel’s partners in this were John Hodges and Daniel Katz. Hodges had started his career in Focus Features, which was another film production and distribution company also working on smaller films. To date, their biggest hit has made just under $200 million globally, with the median gross closer to $15 million. But Hodges learnt a bit about branding here. And a lot more about independent films. He and Fenkel were clearly in this for their love of cinema. It was 2012. They were young enough to think about the future and old enough to remember the 90s fondly. This was a passion project.
Katz was a little different. He was the money guy in the room. Coming from Guggenheim Partners, Katz’s expertise lay in understanding the financial aspects of the deals (and in investing in them). Yet, in one way, he was similar to them – he had always wanted to start a company, “always had dreams”, and all of sudden, it could come true. This was his chance. This was their chance. Talent. Money. Drive. What could go wrong?
Part one: Heartbreak and five chances at redemption
A24 released five movies in 2013. Some you might have heard of. Others, forgotten in the sands of time. The story began a year prior at the Toronto Film Festival. The movie that they wanted was ‘Frances Ha’. Greta Gerwig’s mumblecore3 classic, which featured her in the titular lead role. They didn’t get it. In fact, they didn’t even have a real shot at it - their phone calls went unanswered. Instead, they walked away with some other films.
The movies here are – Sally Potter’s ‘Ginger & Rosa’, Harmony Korine’s ‘Spring Breakers’, Sofia Coppola’s ‘The Bling Ring’, James Ponsoldt’s ‘The Spectacular Now’, and Roman Coppola’s ‘A Glimpse Inside the Mind of Charles Swan III’. How many do you know? One? Two? It can’t be all of them. ‘A Glimpse Inside the Mind of Charles Swan III’ made just $200,000 in total. Okay, so maybe it was critically acclaimed? Also no. This was A24’s first movie. Not a stellar start.
Fortunately for them, some of others on the list made good returns. ‘The Bling Ring’ was much more flashy, with Emma Watson on the poster, and made $20 million. ‘Spring Breakers’ did even better, making $10 million more than ‘The Bling Ring’. On the critical acclaim front, ‘The Spectacular Now’ pushed boundaries and received a full four-star review from Roger Ebert4, in one of his last reviews. It also won some awards along the way.
“Here is a lovely film about two high school seniors who look, speak and feel like real 18-year-old middle-American human beings. Do you have any idea how rare that is?” - Roger Ebert, Film Critic.
A24 had made its mark.
Part two: The new cool kid
Over 2014 and 2015, the number of movies produced by A24 went up dramatically, averaging a little more than ten movies a year, which was double their start. Even better for them, their picks were getting more traction than before. Acclaim was pouring in. Whether through a single-person story like ‘Locke’ or systemic corruption in ‘A Most Violent Year’, A24 was slowly establishing itself as a place for indie films. The hits kept on coming with Alex Garland’s ‘Ex Machina’ and Lenny Abrahamson’s ‘Room’, both of which were nominated for the Academy Awards (i.e., the Oscars). On the documentary side, ‘Amy’ won Best Documentary – Feature at the ceremony. Articles started being written.
But it was 2016 that really kicked things up a gear and it was all because of one movie. One little film that came from the mind of Barry Jenkins. Of course, I’m talking about ‘Moonlight’5. Yes, ‘Moonlight’ won best film at the Oscars next year. Yes, it remains their most acclaimed film till date. Yes, it’s made its way into the halls of modern cinema. It’s cannon. But, apart from this, there was another reason that ‘Moonlight’ was special – it was A24’s first production. And what a selection to make. With a budget of $5 million6, it went to make more than $60 million, making it A24’s highest grossing movie at that time.
The next few productions were also huge. 2017 was a good year. 2018 was even better. A24 simply kept on going7.
At this point, you may be asking – well okay, lots of people make money in film. Why is this important? Why A24?
I think it’s mainly because of the era that A24 came up in. Marvel had just emerged as a box office monster with ‘The Avengers’ around the time that A24 was starting out. In addition, sequels were being discussed as the single largest draw. There was a lot of pessimism in the air about the viability of smaller budget adult-oriented movies on the big screen.8 Apart from this, distribution companies don’t tend to become famous. At least, not at this scale. Then there’s the question of what does A24 stand for? After all, there is no similarity between ‘Room’ and ‘Ex Machina’, none between ‘The Disaster Artist’ and ‘Eighth Grade’. Still, something stuck. Consumers were willing to pay up for this brand. And the brand was continuing to deliver on quality. Variety didn’t seem to matter, A24 was capable of picking the best.
Of course, I think there is an explanation for this. It all goes back to marketing. That, and a little bit of faith.
Part three: I believe in you
One of things that is talked about when A24 is mentioned is their innovative marketing tactics. For ‘Ex Machina’, they used Tinder to build a fake dating profile that led to a trailer for the movie. This made sense for a certain kind of film, but A24 is very attuned to how they should market the film based on the subject. A movie about David Foster Wallace got the written treatment, with a Medium.com partnership, while a more flashy movie might get social media attention in a different way. Neon colors have often been mentioned, and they played a role in certain campaigns, including ‘American Honey’. The opposite is also true, with ‘The Lighthouse’ getting the paler, darker colors, given its horror genre and the fact that the film is in black and white.
Less discussed, and potentially more important, is A24’s ability to back the same creators over and over again. There is clear willingness to support creator vision and run with it, instead of really pushing a certain kind of film. Of the nearly one hundred and thirty movies listed for A24, thirty eight have been made by directors who have made more than one film with A24. That’s nearly 30%, which is hardly normal. Repeat collaborations mean something here. Some of the most important ones have been with Yorgos Lanthimos, the Safdie brothers, the Daniels (Dan Kwan and Daniel Scheinert) and Alex Garland. Even more so, that Noah Baumbach, Sofia Coppola and Claire Denis are also part of this list, helps highlight that A24 is not just going after newer directors. What this does, apart from building trust with creators, is that is allows A24 to become the audience facing brand for them. It also helps keep the brand consistent – the same creator may not make the same movie but, they will focus on delivering a certain kind of content. Additionally, since A24 is not encouraging sequels or franchises9, repeat creators become even more critical.
“They [A24] have balls.” - Harmony Korine, Director of Spring Breakers.
At the same time, there is the question of deals done at the other end, the theater side of things, the streaming side, which allows A24 to bring in more creators over time. Apple TV+ inked a multi-film deal in 2018, while Showtime inked a similar deal in 2019, which was expected to run till 2022. This would have given Showtime access to fifty movies or more. These partnerships went beyond just this and both Apple TV+ and Showtime has co-distributed films with A24. The same is true for Amazon Studios, Hulu and HBO.
Of course, the main thing that has kept A24 at the top is simply the quality of the films. It would be stupid to ignore this. Like a good venture capital fund, A24 knows how to pick films that deliver outsized returns. They know and love their industry. And now, there’s a love for TV as well.
Part four: It’s time for euphoria
Even before they achieved major success, back in 2015, A24 decided to enter the TV space. Initially, they started small, with just a few shows that year. There wasn’t much change in the next few years, and till 2018, they had made just ten shows. This could be termed as a relationship building exercise, something that A24 seems to do repeatedly. In this case, the relationships were with TV platforms, including Netflix, Amazon and HBO. During these years, they also raised money from banks, partially to fund TV expansion. With the money coming in from their film division, 2019 was a big year for TV. In all, they made more shows than the previous years combined10 but, the real prize was ‘Euphoria’.
If you haven’t heard of ‘Euphoria’, you’ll maybe want to know that it’s on HBO. That it has Zendaya. That it’s controversial and acclaimed at the same time. And that a lot of people watch it. Did I mention that it’s won nine Emmy Awards? Maybe you should just check it out for yourself.
In an industry that’s all about rewards for a select few, A24 kept making bets that turn out to be lottery winners. Some of this is about ambition11 but, there is also just clear instinct and a willingness to go against the grain. Who would have thought that a small, low budget movie about a gay black man set in Miami was a good idea? ‘Moonlight’ defied expectations and re-set them. In the same vein, ‘Euphoria’ is a defiance of expectations. Teenagers dealing with drugs and depression. That’s a story we’ve seen before. But, not like this. Not open and authentic. Not real.
Part five: Does anyone want a pet rock?
A24 knows what they’ve created. It’s a brand all in itself. What other film company would sell you a pet rock for $3512? The merchandising division, which is growing, has taken things to a different level – gingerbread tree house kit, cute pins, even a butt plug shaped candle with the description noting that you can “stick this in your cart”. Consumerism re-done.
Still, this is also a serious business. And with the number of big deals happening during the last three years, including Reese Witherspoon’s Hello Sunshine selling for $900 million, A24 was also on the market. The rumored price tag was $2.5-3 billion, an absurd amount for a company of its scale. There just aren’t that many assets, just a set of relationships and good strategy. But, negotiations went on, with Apple apparently hoping to close the deal. In this scenario, a major problem would be where the content would end up – would it go streaming first or spend some time in theaters? Without theater time, part of A24’s strategy simply falls apart.
So, the sale didn’t go through. What did remain is the valuation, with A24 raising $225 million in 2022, at a valuation of more than $2.5 billion. This was investment led by growth equity firm, Stripes and by an asset management firm called Neuberger Berman. It’s also just one more example of investment by Wall Street into content, which was earlier considered a terrible idea. Content is currently king in more ways than one.
Part six: It’s a film studio not and a personality trait
How much further can this go? Is A24 just a studio or more? The newest idea is an option for a paid membership, staring at $5 a month. This does not give you access to the movie library. Instead, you get a zine subscription (this is four times a year), a birthday gift, access to the close friends channel on Instagram and a chance to buy limited edition merchandise. You also get a membership pin. In short, you pay for a chance to buy more things and, there are enough superfans to make this a viable idea. Could any other studio do this and live to tell the tale?
With the recent investment, there has to be a plan in place to scale up. One change that is clearly visible in the increase in production. In 2023, of the sixteen planned movies, only four are not productions as well. There is more skin in the game. Documentaries are also becoming a bigger part of future plans. Personnel changes are in the air. Oscar nominations continue to come.
In the meantime, A24 has established itself as the place to be. It’s no longer the scrappy little studio pining away for ‘Frances Ha’, now, ‘Frances Ha’ pines for it.
Took a lot of restraint not to start with an ‘Everything Everywhere All At Once’ pun.
A distributor handles the release of a film. This includes the marketing strategy leading up to the release, the theatre licensing, the streaming deals etc. A24 currently dabbles in more than just distribution (production is another key component) but they started out with a focus on distribution.
Mumblecore tends to refer to a film movement or genre of film that is defined by low budget, character driven stories. People talking in rooms, that kind of thing.
An extremely well-known film critic who used to write for the Chicago Sun-Times.
Not much of a personal favorite but, I have to acknowledge how important the film is from a cultural standpoint. What did you think? Comment if you agree (or disagree).
This number changes from source to source, with some noting it as low as $1.5 million. I’ve taken the highest estimate as I think the point still stands.
The chart doesn’t include ‘The Lovers’ due to its small gross and small budget.
And this continues till today. Currently, there is conversation about why Spielberg’s new movie isn’t making money despite being well liked.
Rarely encouraging might be more accurate.
This includes shows that may not have actually made it to TV. Essentially, we are talking about pilot orders.
On this note, there are plans for an ‘Earthsea’ adaption – if that pans out, it’ll be one of the most ambitious things A24 has ever done.
Perhaps even more absurd is the fact that its currently sold out.