A24 Mania — MODA

A20 What?

A24 is a film distribution company known for its eccentric, out-of-the-box movies. Think of Everything Everywhere All at Once, Midsommar, Euphoria—that's A24.

But what exactly does a film distribution company do? They frequent festivals and buy movies from producers. Then, they distribute them to movie theaters or streaming companies. Responsible for mass amounts of behind-the-scenes work, distribution companies market, cut trailers, and negotiate foreign circulation. In a sense, they are like film curators, picking and choosing which films stand a chance against us, the consumers. Some other well-known film distribution companies are Paramount Pictures, Lionsgate Films, and 20th Century Studios.

The idea for A24 materialized when Daniel Katz, a former Guggenheim partner investor, drove down the A24 Italian highway with his buddies, David Fenkel and John Hodges.

The Founders of A24 Studios, David Fenkel (left) Daniel Katz (centre) & John Hodges (right). Source: Media C-suite

Imagine the three founders blasting heavy rock (or The Weekend or Noah Kahan or anything really) with the windows down (I’m sure they were down). A cooling sea breeze flows in as they kick their feet against the dashboard. One of them expresses their disappointment with the current film industry. The others agree.

The three founders agreed to push the film industry in a more artistic direction. Their combined knowledge of the film industry and finance allowed them to pursue such an ambitious dream. Upon returning to the States in 2012, they founded their firm in New York. Thirteen years later, in the current Hollywood frenzy of remakes, shameless cash grabs, and homogeneity, A24 makes its viewers feel like they have finally escaped the never-ending after-party. Their eclectic and authentic films take a unique designer-centric approach, placing the creator at the center stage and showing original content that tells honest stories.

Milestones

A24's success is partly due to its creator-centric approach. Their strategy: buy films from gifted filmmakers with distinct points of view to counter Hollywood's staleness and attract a younger audience. Instead of dismissing directors' questionable creative instincts, A24 leans into them. Every project is a matter of life or death.

Former Disney Stars

The company's first big release, Spring Breakers (2012), helped A24 get rolling. The movie follows four college girls who decide to rob a diner and head down to Florida for a much-needed spring break trip. Due to their robbery, the girls get arrested by cops and bailed out by a drug dealer, who invites them to join a life of crime. Since the film starred former Disney Channel stars Vannessa Hudgens and Selena Gomez, much of A24's marketing materials played up on the innocent Disney stars now grown up and ‘corrupted.’

When the distribution rights for Spring Breakers became available, Daniel Katz (one of the founders) sprang to action. In A24 fashion, he sent a gift basket to the movie's production team. But it wasn't a regular gift basket. It had a custom set of gun-shaped glass bongs with the film's logo engraved. It was Kat's way of letting the creators of Spring Breakers know that they understood their vision.

The gift baskets worked. A24 distributed Spring Breakers, turning a $5 million budget into $32 million at the box office.

Spring Breakers. Source: **On the Screen Reviews**

And The Winner Is?

In 2016, A24 decided they had enough traction. It was time to play the role of producer. They co-produced the film Moonlight with Barry Jenkins. Before Moonlight, Jenkins had taken an eight-year break from filmmaking. Returning with A24, he told the story of Chiron, a gay black man navigating adulthood. This film once again proved A24's taste and strategy. It won eight Oscar nominations and, after a Steve Harvey moment, was awarded Best Picture (beating the blockbuster La La Land).

A24's first original production proved another success at the box office. With a budget of $4 million, it scored over $65 million.

*Here’s the notorious Steve Harvey moment

The Daniels

If I had to describe Dan Kwan and Daniel Sheinert as film directors, I would say they are the definition of what A24 wants from their creators — strange ideas well executed. They are also the directors of A24's most significant success to date, Everything Everywhere All At Once.

However, before this film, the duo made a film titled Swiss Army Man. This 2016 movie follows a man stranded on an island. The man has lost all hope for life, but one day, a corpse (the corpse being Daniel Radcliffe, aka Harry Potter) washes up on the shore. But this isn't a normal corpse. Apparently, it farts?

As expected, this strange film caught A24's attention. While other film distributors were lowballing the movie, A24 was so keen on distributing it that the Head of Acquisition told the directors that "he would jump out of a window," if they went with another offer.

Six years later, the same duo released Everything Everywhere All At Once. It is a sci-fi comedy about a Chinese-American woman who runs a laundromat and has to save the multiverses. With a $25 million budget, they surpassed $140 million at the box office.

Everything Everywhere All At Once Source: NPR

Here are some of their movies from the past three years

2024: Baby Girl, Y2K, We Live in a Time, Maxxine, I saw the TV Glow

2023: Pricilla, PI, When You Finish Saving the World

2022: Everything Everywhere All At Once

Other notable titles: Lady Bird (2017), Eighth Grade (2018), Midsommar (2019)

Not everything A24 does is a critically acclaimed success. They have had their share of busts: The Sea of Trees (2015), Dark Places (2015), The Captive (2014), and Remember (2015). However, A24 has been able to maintain a brand synonymous with originality and uniqueness, and this image continues to work for them today.

Business Model

If you still don't think A24 is cool, look at their 2019 annual report—crazy statement. I know. https://sarahriedlinger.com/a24/welcome.html

This example is one of many that help create hype and recognition for the A24 brand. Simply put, they are marketing gods.

Their Success

Before diving deeper into their business model and their sources of revenue, let's recognize how successful A24 has been. In 2024, A24 was valued at $3.5 billion. This valuation proves that the small indie distribution company they once were is now a thing of the past.

It's important to note that starting an independent film studio is gruesome work. It requires a lot of upfront investments, and a return on investments is not always guaranteed. When there is revenue, it arrives in lumps (every time a movie is released). Still, revenue is hard to predict because it relies heavily on public interest (a volatile and unpredictable variable). Promising projects can flop, while underdogs can succeed. This is why it is safer for larger film studios to produce and distribute remakes. Cash flow is ensured.

Marketing Gods

So how did this New York-based independent distribution company beat the odds? Luck and chance explain a good portion of it. Careful planning and a strong strategy make up another portion. The last portion? The cherry on top that created the A24? They are absolute marketing gods.

Chronically Online

The founders of A24 understood that its audience had grown up on the internet. Reaching them through billboards and TV spots was likely to be cost-intensive and ineffective. They quickly adopted Instagram and populated their feed with shots of their merchandise and memes about their films. Going a step further, to promote their film Ex Machina, they created a Tinder bot to pass as Alicia Vikander's character, Ava. They've also created Twitter accounts for characters.

Consumer Goods

A24's constant outpouring of consumer goods is another successful marketing strategy that generates revenue and increases hype. With each movie release, they offer limited edition makeup, game boards, vinyl, screenplays, movie-branded T-shirts, socks, hats, etc.

In some ways, buying merchandise on artistic movies lets others know that one has consumed or engaged with art. It also creates a cult following for the brand. Some fans really take it seriously. They will drop hefty sums on buying out collections.

This merchandising strategy places a capitalistic gloss over all their films. It is not art for the sake of art, but rather, it is art to generate profit. Although this strategy may create cognitive dissonance with their indie roots, in my opinion, with their slim chances of success, their need to build hype around their brand, and the creative freedom they already allot their directors, this is exactly what they should be doing.

Special Access

For its die-hard fans, A24 offers a membership known as AAA24. This $5 per month membership creates a more direct relationship with consumers and helps with the customer retention rate. This membership provides a self-published A24 magazine every three months, occasional free movie tickets, early access to merch drops, and inclusion in A24's close friends Instagram story.

For A24, this membership provides a reliable source of revenue. Although they haven't released the number of members, their close friends contain around 17k people. This is likely an underestimate of the number of members. Some may not join the Instagram story. I would ballpark the revenue from AAA24 to around $1 million monthly.

Comparables

A24 is by no means as large as the media conglomerates that exist. Disney's valuation is $151 billion. While A24 has around 100 employees, Disney has more than 200,000.

View into the Future

Overall, A24's success relies heavily on building a loyal fanbase and pumping out content that others fear putting out there. However, when companies grow, it becomes harder to take risks. There is more to lose. This places A24 at risk of becoming a company that prioritizes revenue over artistic quality (like the rest of Hollywood right now). Although A24 was founded on filling a gap in a niche market, this might not always be the case.

Moreover, to put it bluntly, a free market is a world where big fish eat little fish. Columbia Pictures is owned by Sony, and Universal Pictures is owned by NBCUniversal, which is under Comcast. Warner Bros has been part of coalitions with Time, AT&T, and Discovery. A24 has already fended off acquisition interest. Apple courted the distribution company in 2021, but they did not sell.

Is A24’s success a case of lucky girl syndrome? Or will their strategy and innovation continue to bring in followers? I'm rooting for the latter.