The Little Movie Studio That Could

PARK CITY, Utah — At the Sundance Film Festival here in January, executives at A24, the upstart movie and television studio, stood in the back of a makeshift theater looking as if they were about to be physically ill.

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The Little Movie Studio That Could
, New York Times

PARK CITY, Utah — At the Sundance Film Festival here in January, executives at A24, the upstart movie and television studio, stood in the back of a makeshift theater looking as if they were about to be physically ill.

A24’s latest offering, “Eighth Grade,” an intimate coming-of-age dramedy set for release in theaters July 13, was minutes away from its festival premiere. What if the audience hated it? “This movie is just so personal for me,” Nicolette Aizenberg, an A24 executive, said to someone who had just asked why she was quite literally shaking in her brown snow boots.

There was zero reason to worry: “Eighth Grade,” directed by 27-year-old comedian Bo Burnham, received sustained hoots of approval from the hipster attendees and universal raves from critics, most likely setting up the film as another art house hit for A24, a little New York company that has — seemingly out of nowhere — established itself as Hollywood’s leading tastemaker brand: Miramax for a new generation.

Since starting five years ago, A24 has delivered one cultural thunderclap after another, peaking with “Moonlight,” last year’s surprise winner (especially to the folks of “La La Land”) of the Oscar for best picture. Other A24 hits over the past few years include “Spring Breakers,” about college girls who get mixed up with a messianic drug and arms dealer; the creepy-cool “Ex Machina,” which introduced future Oscar-winner Alicia Vikander to most viewers; “The Lobster,” a dystopian cult favorite; and the Oscar-winning “Room” (Brie Larson for best actress). Among the A24 films up for Oscars at Sunday’s Academy Awards ceremony are “The Disaster Artist” (adapted screenplay) and “The Florida Project” (Willem Dafoe, supporting actor).

But the studio’s biggest hit so far, both critically and commercially, is the film nominated for five Oscars this year, including best picture: Greta Gerwig’s “Lady Bird,” which has collected about $50 million in North American ticket sales. (Its other Oscar nominations include best director, for Gerwig, and best actress, for Saoirse Ronan.) Scott Rudin, a producer of both “Lady Bird” and “Eighth Grade,” said in an email that A24 has “the best team I have ever worked with anywhere, and since I am now approaching Methuselah’s age, that is a considerable statement.” Last year, A24 edged ahead of art house titan Fox Searchlight in domestic market share and trounced Annapurna, a like-minded upstart founded by Oracle heiress Megan Ellison. Most other specialty film studios are focusing on older audiences (Sony Pictures Classics), working to regain their footing after retrenchments (Focus Features), or essentially out of business, including Broad Green Pictures and the scandal-plagued Weinstein Co., which last week reached an agreement with an investor group that will apparently allow it to avert bankruptcy.

“They are the original Coca-Cola,” Rudin said of A24, “and everybody else is New Coke. Except for Searchlight, which is Tab.”

A24 is moving full speed into television. The studio’s odd “Comrade Detective,” starring Channing Tatum and purporting to be a lost Romanian cop show, arrived on Amazon in August. Agents say that A24 ultimately hopes to self-finance four to six new series annually.

Exactly how has A24, an offbeat, 55-person company named after an Italian highway, managed to get tough customers like Rudin eating out of its hand? Moreover, how has the company so quickly created such a strong consumer identity, with analysts saying that fans are starting to buy tickets simply because they see A24’s retro logo on a trailer?

And what makes A24 think it can avoid the usual indie film pitfalls? Burn hot, crash hard. (See: Miramax.)

A24 declined interview requests. Its founders — David Fenkel, Daniel Katz and John Hodges, all of whom have extensive art film experience — seem to see a sense of mystery as part of their branding and competitive strategy, or at least they don’t want A24 to fall into the trap of a Weinstein-style cult of personality. “Frankly, nobody outside the tent has the slightest understanding of what they do, which is very, very smart,” Rudin said.

Founded with a few million dollars in seed money from Guggenheim Partners, where Katz once led the film finance group, A24 has been constructed around one notion: There has to be a better way.

As the DVD market collapsed, making thin studio profit margins even thinner, film companies became desperate to cut marketing costs (“spray and pray” television campaigns mostly) by going directly to consumers through Facebook, Instagram and Twitter. But most established studios — hindered by hierarchies and allergic to talk of social media algorithms — were struggling to treat tweets and Instagram posts as the spine of a marketing campaign instead of an add-on.

The A24 founders decided the only way to seize the moment was to forget about retrofitting a company and build a nimble new one from the ground up. As a foundation, they made a deal with Amazon Prime for exclusive post-theatrical streaming rights. DirecTV agreed to spend tens of millions to jointly acquire films with A24 for offer on its video-on-demand system, giving the fledgling studio a digital laboratory of a sort (and a place to dump titles not ready for theatrical scrutiny). For most theatrical releases, A24 would spend roughly 95 percent of its marketing money online, using data and analytics to stitch films into the social media firmament in ways that prompt movie lovers to feel a sense of discovery and pass the message on organically — persuading fans to persuade one another. “Everything about A24 is just fresh as a new daisy,” said Barry Diller, the former Hollywood mogul who runs IAC/InterActive Corp. and has invested in several A24 projects. “Enthusiasm. Aggression. Sheer smarts.”

Fenkel formerly ran the independent film company Oscilloscope, which he co-founded with Beastie Boys rapper Adam Yauch. Hodges started his career at USA Films, which became Focus Features. A24 is owned by management, with Eldridge Industries holding a minority stake. Eldridge, founded by the former president of Guggenheim Partners, Todd Boehly, also owns The Hollywood Reporter and Dick Clark Productions.

Insiders say that the A24 culture bears more similarities to Silicon Valley than Hollywood. It’s run like a collective. Nobody has a formal title. Young staff members are empowered to challenge the founders. It was Aizenberg, who focuses on publicity, who caught “The Florida Project” at last year’s Cannes Film Festival and made a passionate case for A24 to buy the stylized drama. (New York Times critic A.O. Scott called it “risky and revelatory.”) When NBCUniversal recently wanted to invest in A24, the studio decided it would rather remain independent.

“I felt like there was a huge opportunity to create something where the talented people could be talented,” Katz told GQ magazine in May.

It has not done it alone. One secret weapon has been Operam, a stealth data and marketing startup that helps studios, including Fox Searchlight, develop algorithms used to target potential ticket buyers on Facebook and other digital platforms. Another sophisticated vendor that has contributed to A24’s success is Watson/DG, a web-focused marketing agency.

At the same time, A24’s founders tapped into a deep unhappiness among young filmmakers about the state of the film business. Across Hollywood, all most executives talk about are franchises and “tent poles,” movies with edges sanded off so they can play to the widest possible global audience. Even most art house companies, struggling to fill seats in the age of Netflix, have become more dependent on stars and marketable concepts. Nothing bums out the auteur set faster.

At A24, the talk is about artistic impulses first and foremost — how do we make a really cool movie — and then the studio tries to lean into whatever that may be in its marketing campaign, even if it’s weird. “They seem like they are relying only on their taste and instinct, and that confidence makes everyone want to work with them,” said Scott Neustadter, who was nominated with Michael H. Weber for an adapted screenplay Oscar for “The Disaster Artist.”

Even so, the sustainability of A24 remains a question.

The specialty film business is an increasingly challenging one. Amazon and Netflix have been driving up prices for talent. With many viewers content to watch stylized film on their living room televisions, art house theaters have been going out of business. There is no guarantee that A24’s guerrilla marketing strategies will support more mainstream movies, as the studio aims to start adding to its slate. As A24 grows, it will become harder to avoid the clash of egos and calcification into hierarchies.

And A24 has savvy competitors hot on its tail. One is Neon, which is also focused on using social media to go after millennials. Founded last year by Tom Quinn, a longtime independent film executive, and Tim League, the chief executive of the Alamo Drafthouse theater chain, Neon was behind “I, Tonya,” the darkly comedic Tonya Harding biopic that has collected about $30 million. Its star, Margot Robbie, is nominated for best actress Sunday; Allison Janney is up for best supporting actress. The studio is also not the most successful new entertainment company to recently come along. That prize without question goes to Blumhouse Productions, which is focused on low-cost, auteur-driven horror movies like “Get Out” and has a first-look deal at Universal Pictures. Last year, Blumhouse films took in nearly $700 million worldwide. Blumhouse has also been behind “Whiplash,” nominated for the best picture Oscar in 2015, and the TV series “The Jinx: The Life and Deaths of Robert Durst.”

In fact, looking at A24’s box office results, it would be easy to wonder what all the fuss is about. Before “Lady Bird,” the studio’s biggest hit was “Moonlight,” which collected about $28 million at the domestic box office, making it one of the lowest-grossing films ever to be named best picture. (It also cost only $1.5 million to make, however.) A24 has also had its share of misfires, including the 2014 crime drama “A Most Violent Year,” which cost $20 million and collected $5.8 million.

But even those in Hollywood who believe A24 is overhyped — and there are plenty, perhaps nudged along by envy — concede that the studio has done an astounding job at building a brand.

And it appears to be just getting started. In an unusual move by Hollywood standards, the studio introduced its own podcast last week. (“A24 in your eardrums. No host, no ads, no rules.”) It publishes an A24 magazine that is distributed free in trendy hotels. The company also sells limited-edition merchandise on its website and is planning special musical events.

“What’s so interesting is that they’re tapping into a new type of entertainment enthusiast,” said DeeDee Gordon, an independent brand strategist who has consulted for A24. “It’s similar, I think, to what happened in foodie culture. It used to be a rarefied niche. Then it became democratized. Every income level. Every life stage. Global. That is the opportunity that A24 now has at its fingertips.”

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