Rising A24: Hollywood Got Beef

If I had $1 million, I would bet on A24.

But A24 isn’t waiting around for anyone, especially not for someone to hit the millionaire mark.

It is currently valued at $2.5 billion after raising a staggering $225 million in equity from a crew of investors, including Stripes in 2022. This figure is nothing short of crazy bonkers, especially when pitted against the long-standing titans of Hollywood.

In this week’s B-Roll, we will discuss:

• Attractiveness of A24 from a creative, filmmaker and movie-goer’s perspectives.

• How such an attractiveness curates A24’s appeal to investors as a private-owned company.

• Prospects of becoming a publicly traded company.

Speaking of beef, I’m not talking about dinner - I’m referring to one of A24’s highest grossing Netflix series, Beef, starring the incredible duo Ali Wong and Steven Yeun. Absolute jam.

Yesterday at the 30th Annual Screen Actors Guild Awards in LA, the pair won:

• Outstanding Performance by a Female Actor in a Television Movie or Limited Series for role of Amy Lau (Ali Wong)

• Outstanding Performance by a Male Actor in a Television Movie or Limited Series for role of Steven Yeun

This award-sweeping moment is just another feather in A24, explaining its $2.5 billion valuation and position as a rising contender in Hollywood.

🍊 AN ARTSY CULT

Yes, you read it right. A24 has successfully garnered a cult-like following that we have not seen since the Hollywood’s Golden Age.

A24 stands as its own aesthetics, rebellious yet highly stylized, and maintains its presence through extensive marketing strategies. 

What makes A24 films so ahead of the curve? Here are some of the reasons:

Make Auteurism Great Again

An auteur is simply a director who exerts a high level of control across all aspects of film, not just directing. They leave their printings in all parts: writing, editing, building characters.

Christopher Nolan, Jordan Peele, and the rising-star Celine Song are notable examples of contemporary auteurs with “trademark” films definitely their own.

People love auteur films because they are direct reflection of the director's artistic vision throughout all of the projects. And Celine Song is A24’s auteur in the making.

Relevant Content = Amplified Presence

Marvel was the “it” content five years ago: every household looks forward to once-a-year blockbuster release. But now, the superhero-word building is no longer relevant, becomes out of touch and lacks diversity.

But with A24, the company is doing diversity right, like highlighting cultural awareness and writing politically charged narratives without being watered down to abide by the Hollywood formula.

Let’s now unpack the investors’ choice: what are some of the reasons investors choose A24 and not other indie labels?

Ride with the Mass

It is clear that A24 films are not simply consumer products: its stylized allure gives in the audience a sense of sophistication, believing that their taste in arts in posh and in-depth. In Gen Z language, we’d say “making A24 our personality.”

From an investor’s point of view, this is an ideal advantage edge. This symbiotic relationship enhances A24’s appeal since it means both buyers and sellers are likely to remain in the game. As long as A24 maintains this cult-like status, it ensures stability in the market and fortifies the long-term viability of the independent film financing ecosystem.

Timing

New generations as new dominating waves of moviegoers, are increasingly vocal in social changes and will keep institutions accountable. A24’s films with diverse genres, plots, and cultural representations are released very timely in line with this growing awareness.

To investors, this combination positions A24 as a market leader, fostering a robust and recognizable brand identity centered around social consciousness, a unique attribute not previously seen in major studios

🍊 FUTURE OF A24, A SERIOUS TALK

Talk that IPO Talk

After scoring a $225 million investment, there have been talks for A24 to go public because the entertainment industry has witnessed significant mergers and acquisitions. A24 should be no exception.

A24: An Ideal Investment. What’s The Produced’s Take?

Compared to other publicly traded studios like Lions Gate (valued at $4.6 billion) or Disney, A24 is only half its valuation; it is nothing in comparable.

But the potential is paramount.

In our last week’s B-Roll, I explained why Wall Street is urging major studios to cut back on streaming services and allocate more funds into making feature-length films for theaters. Investors want immediate earning growth.

And A24 is doing just that: making audiences roll out of their bed and go to the theater. And if they love it so much, it’s no doubt A24 is getting triple-screened audiences, who will bring their friends, families and other movie enthusiasts along.

Theatrical releasing is consistently A24’s most viable method: Everything Everywhere All at Once featuring Oscars-winning Michelle Yeoh and Ke Huy Quan tallied a grossing $143.4 million in box office with a modest budget of only $25 million.

Financial wise, A24, Wall Street and investors are on the same page.

What about the filmmakers’ perspective?

Undeniably, going for an IPO will raise capital to scale larger productions and push A24 to become a new film studio conglomerate.

But being a film studio conglomerate and no longer a hipster-arthouse is maybe exactly the problem that filmmakers might have issues with:

• Steering away from purposefully political movies with tangible conversations about things happening in the world.

• Dismissing marginalized and BIPOC talents and stories, unsurprisingly.

• Being tempted for another superhero franchise and world building?

• Falling back to the Hollywood recipe for success.

 “Okay The Produced, then where is the common ground?”

Money talks, and A24 is thriving.

But compared to other major Hollywood studios that have been around since the Ice Age (yeah!), it’s best to keep the IPO conversation on the backburner right now.

One reason explaining this disparity is that many directors who have made hits at the start of their career with A24 are no longer with A24 to work for major studio conglomerates.

• Greta Gerwig, who made an initial industry A24-hit with Lady Bird, did highest-grossing Barbie with Warner Bros last year. It was not A24.

• Daniel Kwan and Daniel Scheinert, the masterminds behind A24’s Everything, Everywhere All at Once, just signed an exclusive 5-year deal with Universal Pictures Ltd.

Perhaps, A24 is still regarded as a stepping stone for indie filmmakers to secure their big gigs with Hollywood titans?

Another implication: going public with an IPO would mean A24 will surrender partial ownership and open itself to the public and investor scrutiny.

There is a risk that this move could compromise A24’s distinctive aesthetics, cult-like appeal and diversity - it’s entire brand identity.

🍊 SO WHAT I’M SAYING IS…

As we observe these implications, the prospect of an IPO for A24 might be more complex, requiring consideration of the label’s evolving role within the filmmaking ecosystem.

A24 being at the forefront of our B-Roll this week further reinforces The Produced’s purpose:

• Allowing investors and filmmakers to see eye-to-eye

• Striking for a common ground between the film and finance industry without either watering down artistic values or compromising the prospect of a good business.

Alright, that is it for today.

What are your thoughts on this?

In case this B-Roll issue nudges you to watch some A24, here are my recommendations:

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See you Wednesday. Toodles!