A24 has long punched above its weight, but will it survive a pivot to blockbusters?

But is the brand’s box office success under threat with a strategic shift away from the indie fare that made it famous and towards mainstream IP?

The movie studio inspired by Silicon Valley

To assess the threat, we first need to recap the tactics that have made A24 the darling of Hollywood – and the hot young thing for cinephiles worldwide.

In his excellent analysis of the brand’s strategy, Mario Gabriele of Generalist identifies four tactics underpinning A24’s strategy: (1) a startup mentality, (2) making small bets, (3) backing auteurs and (4) embracing the internet.

The brand leads with a test-and-learn approach, having moved from small-budget to mid-budget films. This mentality extends to their investment thesis outside of film, backing the makeup brand Half Magic founded by Donni Davy, the lead makeup artist on Euphoria.

And it backs unorthodox creative talent, giving them complete creative control. It’s the reason every film has such a unique style. Last year’s Talk to Me is a great example. The horror hit was written and directed by the Philippou brothers, two relative unknowns (albeit unknowns who had racked up hundreds of millions of views on YouTube for their outlandish stunts).

All of this feeds into a bottom-up marketing approach: viral marketing campaigns that embrace the internet and hype their films from the ground up, creating fandom before films are even released.

Keeping its cool

In many ways, these are the same principles that auteur brands like Liquid Death, Crocs, and Duolingo follow. A24’s studio logo is a rare mark of cultural quality, regardless of genre. Along with HBO, it may be the only studio of which hype beasts would proudly wear the logo.

So why the pivot to big IP films? And will it succeed?

Well, as one Hollywood insider told The Wrap, “The auteur business is a lousy, high-risk business that does not attract potential buyers.”

A24’s success is relative. It’s doing amazingly well for a niche(-ish) arthouse shop, but when a private equity firm pumps $225m into the company, that won’t cut it. It can no longer afford to lose money on cult but financially unsuccessful films like The Green Knight and Beau Is Afraid.

Instead, they’ll have to pursue sure-bet, big-IP cash grabs. But does that work within the brand’s current strategy?

Let’s focus on three of those four pillars from Generalist’s analysis of the brand. First, startup mentality: big movies require big bets and an even bigger team. How does A24, at 10 times the size, make as many bets and, therefore, keep releasing unique cinema?

Second, backing auteurs. A24’s acquisition executive Noah Saco has said that the brand is “de-emphasizing traditional auteur-driven dramas” in favor of “action and big IP projects.” This makes sense; you can count on one hand which films in the top 20 grossing films of 2023 were original IP projects. Spoiler alert: it was one, Pixar’s Elemental (though Cocaine Bear at number 40 deserves a special mention).

Third, mastering new media. As David Ogilvy said, give me the freedom of a tight brief. Lots of A24’s early creative marketing was a result of lower budgets. The bigger budgets and many cooks involved in political blockbuster marketing will likely throw a spanner in the works. It’s the reason we get the same set of uninspired OOH posters to market every film. It’s top-down rather than bottom-up marketing.

So clearly, while aiming to become the next Marvel is the most Wall Street move co-founder Daniel Katz and co can make, it isn’t very artistic – and that is the exact danger A24 faces.

Bigger isn’t always better

A few lukewarm films filled with explosions and no emotion could alienate the young fan base the brand has built from the bottom up. In fact, a Tubi survey of Gen Z and Millennials found that 74% of them prefer original content and storytelling to remakes and sequels.

So A24 runs the risk of becoming just another studio when that logo suddenly won’t look so great on a hoodie.

In a sea of killer whales, the shark suddenly looks under threat.

Perhaps the answer lies not in going vertical (bigger budget movies), but horizontal (backing auteurs in other categories and extending IP to other mediums). That could turn the studio into the Mschf of movies – some have even posited what an A24 take on theme parks would look like, which in reality could be something in the region of A24 meets Secret Cinema.

But let’s stick to film for now. If it is to succeed in the blockbuster space then, ironically, the highest-grossing film of 2023 and seemingly the most cash-grabby IP of all time may be the blueprint for success: Barbie, which hits most of those pillars that built A24’s success. Sure, it had a massive budget (by no means a small bet). But it also had a director with a unique vision and creative control, and a clever bottom-up marketing campaign (relative to the big-budget Hollywood standard).

Ultimately, to succeed in its pursuit of big IP profit, A24 will need to find a way to work with the Mattels of this world who embrace their current strategy.

As always, they’ll need to entertain, or die.