The $3.5B Maverick Studio That Took Over Hollywood

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There is a lot going on right now in my world.

The Just Go Grind podcast is rolling on YouTube, Spotify, Apple Podcasts, and beyond.

I just recorded a new episode with John Andrew Entwistle, founder of Wander, which will be coming out in a couple of weeks and I think it’s one of my best yet.

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Among it all, I still got an incredible deep dive ready for you all.

How?

Thanks to my wonderful writer, Erika, who I hired through Athyna.

I’m super excited about this one.

Erika has been working on it for weeks and it turned out great. There’s so much we can learn from this company. It’s available in full for premium subscribers.

Let’s dive in.

A24 was born in the A24—the famous Italian highway, that is.

The Autostrada 24 connects Italy’s east coast to the capital and it’s where Daniel Katz, David Fenkel, and John Hodge were when an idea hit.

It’s really no joke that all roads lead to Rome. At least, the world’s most prestigious indie studio does.

But what happened in Italy had been a long time coming.

The year was 2012. Hollywood was thriving off of The Hunger Games, The Hobbit and Marvel’s Avengers’ overwhelming success.

Numbers stated that ‘people wanted to see what they’d seen before, with a new twist’.

Daniel Katz, however, had a different perspective.

He was a long time fan of Miramax, the studio that became synonymous with independent cinema back in the nineties. Most of their films explored unconventional themes that set them apart from Hollywood’s gems at the time.

Above all, Miramax was known for having directors take the front seat—having them unleash their creativity and explore their vision deeper. As a result, it was cradle to some of cinema’s modern classics like Trainspotting, Life Is Beautiful and none other than Tarantino’s Pulp Fiction.

A24 was ultimately built upon this influence.

KEY TAKEAWAYS FROM A24

Don’t have time to read the whole piece?

Here’s what you need to know from the founding story of A24, tying its lessons into ones we’ve previously learned from other founders we’ve covered:

• When used smartly, social media goes a long way. We all know it: it’s proven to be a direct and impactful way to achieve the most outreach and build community with the audience. But in doing so, A24 never pushed their own narrative onto users; they made their own way into the existing social media ecosystem by understanding and embracing its idiosyncrasies as they already were, instead of trying to reshape them.

• Betting on the different. The done-to-death is easy and efficient, but the out-of-the-ordinary is what people ultimately remember. A24 has built such a distinct nature for itself, that it’s found the way to organically draw both audiences and filmmakers in.

• A24 was never scared of pushing boundaries with its unconventional marketing tactics. Social media profiles, cross-promotions with retailers and unique merch pieces are only a few of the original yet affordable ways they’ve found to make people look their way.

• A24 approached its founding much like a tech company, prioritizing the digital side of the business for the impact it was poised to have on the future. With a strong online presence from the outset, A24 has consistently managed to stay ahead of the curve.

Although Katz was the one to come up with the idea, it was alongside David Fenkel and John Hodge that he actually made A24 happen.

They all came from the film industry and knew each other from the indie movie circuit. Most importantly, they all shared both a sense of void of independent cinema in mainstream media, and a not-too-positive view on the general state of the industry.

Despite this, however, their areas of expertise could not have been more different.

Daniel, for one, had been leading the film division at the Guggenheim’s investment group since 2005, hence his background on the financial aspects of film.

On the other hand, David was experienced in both production and acquisition from his days at Big Beach Films and Universal’s Focus Features.

Meanwhile, John had already co-founded a distribution company in the past, called Oscilloscope Laboratories way before A24 ever came to existence.

Their experience and connections in all different areas truly created the perfect foundation for what would later become the world’s favorite indie studio.

They didn’t know that yet, though. At first, it was chaos.

But they were on a roll, and they were committed to make A24 happen.

The three of them quit their jobs to make building the studio off the ground their sole focus. As seed money, Daniel used 12 million dollars from his connections at Guggenheim.

They set up an office in New York, instead of Los Angeles. It added another layer of difficulty to the A24 journey, since it placed them far away from the Mecca of cinema.

For more reasons than one, A24 was unique from day one, with beginnings that looked more like those of a Silicon Valley startup than a traditional Hollywood studio.

Influenced by tech companies, to this day A24’s headquarters operate with a flat organizational structure, under the belief that less hierarchy enhances creativity. No individual offices, just an open-plan floor thought to—literally—throw down any walls between team members that might stop them from sharing ideas and building together.

But when we say build, we don’t yet mean producing top-charters and Academy Award winners, as those days were still ahead of A24.

In the beginning, it was all about distributing unknown independent films.

A24: THE DISTRIBUTOR

A24 originally started as a distribution company. They acquired the rights to promising movies and focused on promoting them to get tickets sold.

They made a deliberate choice to seek out auteurs with bold visions and original storytelling—the very thing that would go on to define their path forever.

They counted with a tight budget to set the ball rolling, however, so it was made clear from the beginning that they would need to sharpen the eye for small bets that could make a significant return.

And oh boy, did they do just that.

That first year, film festivals became the team’s workspace. That’s how they secured Roman Coppola’s A Glimpse Inside the Mind of Charles Swan III and Sally Potter’s Ginger & Rosa.

But the true hit came with Harmony Korine’s Spring Breakers. For better or worse, the movie became a defining milestone not only for the future of A24, but for pop culture itself.

The road to acquisition was paved with determination. They could sense Spring Breakers blowing up. It’s 2012, your cast features Selena Gomez, Vanessa Hudgens, and Ashley Benson, and your soundtrack includes Britney Spears and Skrillex. A24 knew they had to get in on this cultural juggernaut in the making.

How did they do it then? Delivering to the producers glass-gun shaped bongs with the Spring Breakers logo engraved on them.

It did the trick, believe it or not. From a $5 million budget to $32 million at the box office, Spring Breakers became their first big win.

As early as with their 3rd movie, A24 was already showing hints of the outside-the-box way of thinking that is so sought-after in the industry, and that would later inevitably become the key to their identity and success.

The glass-gun shaped bongs? That was just the beginning. The promotion of Spring Breakers is the prime example of the innovative mentality that actually set the studio apart from day one.

And speaking of generating buzz—you just had to be there when this picture dropped on A24’s Facebook page.

James Franco as Jesus in the Last Supper was enough to earn 174 million impressions, gather 600,000 likes in Facebook, and make Spring Breakers trending topic on Twitter for more than a few weeks.

It was with this poorly photoshopped image that they first dipped their toes into virality—something they would soon become all too familiar with.

A24 took a risk with this film. It pushed boundaries in and of itself, and so did the promotion strategy. But it paid off with the biggest premiere of a movie in limited release in 2013.

That same year, A24 partnered with another rising director and pop culture icon—Sofia Coppola, for The Bling Ring. They also secured the quintessential teen romance of the 2010s, The Spectacular Now by James Ponsoldt.

What did all these movies have in common? Not much, at first glance. But they were starting to build a creator-centered curated selection, one that was based on not much more than a leap of faith.

And that was kind of the secret to all the films that came next. A24 was not run by experienced businessmen but passionate movie enthusiasts instead.

Still a new, unestablished firm though, they were strict on the budget. In order to earn the luxury of handpicking their next project, they had no choice but to cut on marketing costs and let it all go towards acquisition.

At this point in time, they had experienced the power of social media firsthand. Spring Breakers had been a huge hit thanks to cutting-edge digital strategies that were still taking form in their marketing department.

In September 2013, they struck a $40M deal with streaming giant DirecTV to co-finance and market A24’s indie movies in exchange for exclusive release in their Pay-Per-View service 30 days prior to release on the big screen.

In the midst of a huge marketing push, DirecTV was trying to differentiate itself from competitors and other cable companies. They did so by betting on a newcomer that was already standing out from other studios for its unique voice.

Later that same year, they hit yet another multilayer deal, this time with Amazon Prime. Spring Breakers and The Bling Ring were such popular picks among Amazon’s customers in terms of DVD and digital sales that it only made sense to bring A24 into their acquisition. All past and future A24 releases would be available at no additional charge in their streaming platform ‘Amazon Prime Instant Video’ soon after physical release.

Both these deals were huge for outreach purposes, since it meant a whole new wave of potential viewers before and after theatrical release. It also guaranteed an archive of sorts for their growing collection.

The initial plan was to distribute eight to ten movies a year. That got a little out of hand.

Having sold nearly 3.5 million tickets and reached over $27M in revenue during that first year, A24 upped the ante to eleven movies in 2014—Enemy, Under the Skin and A Most Violent Year being the most successful in the box office.

For one of their first horror films, Kevin Smith’s Tusk, they stirred things up again with their chosen approach.

According to A24’s marketing strategist Graham Retzik, Tusk was “right at the intersection of art and stoner culture,” so they partnered with a Los Angeles cannabis retailer to create two specially branded strains of marijuana as a cross-promotion.

Overall, however, it wasn’t the greatest of years for A24.

It was in 2015 that they pulled another buzz marketing move, with the release of Alex Garland’s sci-fi classic Ex Machina, starring Alicia Vikander.

They took the film to South by Southwest for its first ever US screening. They needed something bold to promote it; James-Franco-as-Jesus kind of bold.

Something like an Alicia Vikander Tinder chat-bot profile.

The so called ‘Ava’ was coincidentally based in Austin, just like SXSW that was right around the corner. Everyone who matched with Ava and engaged in a brief conversation would get asked quite unusual questions about what it felt like to be human. But with that, they would also get invited to follow her on @meetava, her Instagram account, only to then realize they had entered a promotional site for Ex Machina.

Did it come close to crossing the line of identity fraud, impersonation and spam? Yes. But boy did it work wonders for getting tickets sold.

Ex Machina became A24’s top-grossing movie up until that point, having sold over 25 million in the box office, even surpassing what Spring Breakers had done two years prior.

The Tinder strategy was groundbreaking. It was debatably wrong yet so unexpected that it made people curious. They were introduced to a character before even knowing about the movie itself; it only made sense to at least know what Ava was up to in the story.

Since then, they’ve only doubled down on these strategies. Guerrilla marketing is now an A24 staple.

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