Media Multiverse Conquered by A24’s Record Oscar?
According to the head of the venture capital firm that invested several hundred million dollars in A24’s last year, the indie producer-distributor’s “extraordinary” momentum could lead to a large international business and possible acquisitions.
A24 executives rarely talk publicly, but Stripes partner Ken Fox spoke with Deadline shortly after the studio’s record-breaking Oscar haul, which was highlighted by Everything Everywhere All at Once. As well as winning Best Picture and Best Director, the company won all four acting categories (counting Brendan Fraser’s role in The Whale as lead actor).
In March, Stripes invested $225 million in A24, leading the first institutional financing in the studio’s history since it was founded in 2012.
Fox said, “They have been able to create a lot of value.” A needle in a haystack is a company that wins in an attractive market because its products are amazing and loved. The market segment must be large enough, he explained, and the company must be at an inflection point, he explained.
Fox confirms “A24 is that thesis,” citing its management team, talent relationships, and growing film and television footprint as ongoing success factors.
It has forged a young fanbase as loyal and fervent as Marvel, though its fanbase is considerably smaller.
Daniel Katz, the former Lionsgate Films and Guggenheim Partners finance executive, and David Fenkel, the founder of Oscilloscope Laboratories, still lead A24.
We think A24 is very special, and we would partner with them to build a very large global business with them. I think A24 could be an acquirer.”
FOX, KEN
In spite of the company’s private nature, Fox said it has positive cash flow. In response to a question about whether Stripes would consider other entertainment investments given his experience with A24, he said, “At this point, we would do it in partnership with A24′′. A24 is special to us, and we intend to build a very large global business in partnership with them.”
Fox said A24 could be an acquirer, which was once considered a potential target for acquisition.
Stripes’ investments echo A24’s in terms of cachet, albeit largely outside of showbiz. A number of them are Swiss sneaker manufacturers (On). New York bakeries (Levain), a German beauty brand (Dr. Barbara Sturm) and an organic market in Los Angeles (Erewhon). Spotify recently acquired podcast company Gimlet for $230 million.
In addition to supporting larger-budget movies and television expansions. A24’s also added a budding membership program, consumer products, books, and music with the new funds. It recently acquired Half Magic. A makeup brand created by Euphoria’s makeup artist Donni. Davy an A24’s show that airs on HBO as well as #euphoriamakeup fans.
‘Everything’ Theory
How did a middle-aged Chinese immigrant deal with the metaverse sweep to glory in a kooky fantasy romance?
Due to Covid, the film’s box office gains (worldwide gross $108 million and counting off an estimated $25M budget) helped boost the indie box office during a particularly challenging time for indie theatrical release. Resulting from a combination of marketing and publicity expertise, organic talent, and audience enthusiasm, the film became a success.
Having worked on Swiss Army Man, the previous movie directed by the Daniels (aka Daniel Kwan and Daniel Scheinert), the A24’s team gained a better understanding of their tastes. They proved ideal spokesmen for the film, ubiquitous on social media and giving its out-there elements an appealing entry point. They even published a book about the multiverse, which is available on the A24’s website.
The casting of the stars in this movie was truly magical, they included Michelle Yeoh, Key Huy Quan and Jamie Lee Curtis all of whom brought something special to the production. The marketing strands were an interesting mix encompassing elements of a science-fiction adventure as well as a heartwarming story based on Asian immigrants that resonated with the AAPI community. This popularity soon led to merch being released, with $2 googly eyes and $36 hot dog finger gloves selling out quickly on the company website. To top it off, the poster art for this project perfectly unified all these elements together.
Someone involved in the marketing campaign said
“Remember when hot dog fingers were fringe. There were moments when we were scared of them. Now they’re mainstream.”
Like many indie distributors, A24 relies primarily on digital and social media, continuing that into this big awards push. It’s cheaper than TV, more targeted, and allows audiences to see how they respond.
In addition to the multiple Oscar wins for The Whale, A24’s also received nominations for Marcel the Shell With Shoes On and Aftersun, demonstrating the company’s diverse slate. Despite the compression of windows and experimentation with day-and-date releases, A24 has remained steadfast in maintaining a healthy theatrical runtime for its releases. It was the most nominated distributor at the ceremony.
In a market that was evolving even before Covid, A24’s output deal with Apple helped bring Macbeth to a broad streaming audience and provided financial stability. With its March 2022 theatrical debut and June digital release, EEAAO landed on Showtime’s streaming service months before the Oscars due to an ongoing distribution agreement with the cable network.
Last weekend’s win was also influenced by external factors. This Oscar season. EEAAO was helped by a softer slate of major studio contenders. The films of some A-list directors falling by the wayside. And an evolving Academy membership that is now more diverse and probably more attuned to commercial movies than ever before. Similar to CODA last year, the film also taps into a zeitgeist with its social justice themes.
The next step
Can the company live up to the high standard of its Oscar season of glory? It won’t be easy. One former company CEO who counts himself as a big admirer of A24’s says EEAAO is “a sensation but an aberration.” Even so, I’ve been fascinated to see how many singles and doubles they’ve hit along with the grand slam.”
There have been plenty of films that haven’t taken off at the box office: Under the Silver Lake, When You Finish Saving the World. C’mon C’mon.
EEAAO’s epic run began at SXSW where Julio Torres’ debut Problemista had its world premiere. Tilda Swinton stars in the thriller. Its line-up this year includes Beau Is Afraid, starring Joaquin Phoenix. Which is Ari Aster’s third film (after Hereditary and Midsommar); Past Lives, a Sundance and Berlin hit by Celine Song. Talk to Me, a Sundance pickup directed by YouTube creators Danny and Michael Philippou.
It will be interesting to see how the big-budget movies go,” says a studio source.” Will they be able to make good money across their slate?”
