A24’s Challenge To Franchise Hollywood

by Emerson Lissette

The Studio That Changed the Game

Founded in 2012, A24 has quickly emerged as one of Hollywood’s most influential and trusted independent studios. When Marty Supreme hit theaters this past December, it became A24’s highest-grossing film of all time, earning over $147 million worldwide. Two months later, Wuthering Heights is now topping charts again. In just thirteen years, A24 has evolved from a scrappy independent indie film studio into one of entertainment’s most formidable creative and economic leaders. Valued at $3.5 billion in a reported 2025 fundraising round, A24’s growth reflects an innovative business strategy that redefines how risk, authorship, and brand equity typically function in the modern entertainment industry.

Hollywood’s Franchise Addiction

A24's success is especially striking considering the environment it entered. They launched at a moment when Hollywood was consolidating around franchise filmmaking. Between 2010 and 2023, eight to ten of the top ten highest-grossing films each year were sequels, reboots, or other extensions of existing intellectual property. Conglomerates like Disney, Warner Bros, and Universal were doubling down on established universes like Marvel, DC, and Star Wars.

Using pre-existing IP offered these large companies wider audiences and reliable returns: a film like Avengers: Endgame could generate $2.7 billion on a $356 million budget. The high global recognition of these familiar stories also allowed studios to expand further into growing international markets, such as China and India.

Major studios had every financial incentive to lean further into franchise filmmaking. After all, it offered stable cash streams to offset the industry’s rising production costs, while also allowing continued expansion into increasingly profitable international markets. Back in 2022, Daniel Loria, editorial director at Boxoffice Pro explained that “studios are releasing fewer movies to the movie theaters. But the ones they do… they’re swinging for the fences, they’re going for a home run”. Companies like Warner Bros. and Disney are dabbing less and less in mid-budget movies, and instead opting to invest in larger blockbuster releases, knowing that they need to appeal to international audiences to succeed. Even actor Matt Damon acknowledged in a 2021 interview that “You want the most accessible thing you can make, in terms of language and culture. And what is that? A superhero movie”.

The consequences for mid-budget, original filmmaking were severe. Original stories often struggle translating across cultures as well as existing IP, making them a financial gamble that major studios were no longer willing to take. Consequently, major studios became more risk-averse, mid-budget original films were largely rejected.

To put the current state of the industry into perspective, in 2024, the five major studios - Disney, Universal, Sony, Warner Bros., and Paramount - delivered 62 wide releases, and only 20 of those films cost less than $100 million to produce. For industry’s most powerful players, this represents a strikingly low slate and a clear sign that the creative middle ground was vanishing.

Additionally, a 2018 study analyzing over 4000 major studio films from 1988 to 2015, found that by 2015, sequels alone accounted for over 50% of major studios profits. Sequels also generated higher rates of return each year than the rates of all other films, apart from four years (1993, 1996, 1998, and 2014). For audiences, the researchers noted that this shift created, “an environment in which choice is restricted, and the unanticipated, ‘surprising’ film experience is less likely to occur.”

A24’s co-founder, Daniel Katz stated that “Films didn't seem as exciting to us as when we started our careers, and that signaled an opportunity.” In response to a lack of experimentation and originality in the industry, Daniel Katz, and his fellow founders, David Fenkel and John Hodges, saw the opportunity to compete with larger studios by choosing uncertainty and becoming a studio built around providing that surprising experience to audiences.

Shifting Strategies: Distribution to Production

A24 began building its brand by focusing primarily on distribution and acquiring rights to completed films, which was far cheaper than funding production. A24 immediately signaled their taste by consistently backing bold and unique films with a “distinctive point of view.” To put A24’s boldness into context, 92% of A24’s 25 highest grossing movies were rated R. In comparison, around 51% of movies are typically rated R across the film industry. Through films like Spring Breakers, The Bling Ring, and The Spectacular Now, A24 began developing an acclaimed reputation. However, A24 quickly realized that distribution alone wouldn’t build lasting influence. Owning their films and controlling IP would give A24 the foundation for long-term power. Integrating production into their strategy allowed A24 to strengthen the brand’s equity, and bet on filmmakers while providing them greater creative freedom.

Unlike larger studios, who would produce fewer films a year, with budgets of over $100 million, A24 began producing around fourteen films a year with a budget of around $7 million to $10 million. By spreading capital across multiple mid-budget films, A24 minimized risk while still creating potential for big returns if one film broke through. This strategy stabilized A24’s finances while diversifying their slate of films, strengthening their overall brand.

A24 also built brand equity in more tangible ways. They extended into merchandise, selling everyone from hoodies to candles to vinyl records. This marketing strategy allowed A24 to evolve into a cultural lifestyle brand, rather than just a production company. While other studios focused primarily on promoting individual films, A24 promoted itself, giving audiences a reason to follow the studio as a whole.

When they did highlight individual titles, it was through creative, attention-grabbing tactics. They leveraged social media and viral stunts like creating a fake Tinder account for Ex Machina’s AI character or sending dolls to audiences after Hereditary screenings, which made conversation about both the films and the studio. By promoting the studio alongside its films, A24 built loyalty and anticipation for every release, while their diverse yet consistent film portfolio continued defining what an “A24” film truly represents.

What It Means for the Industry

An independent studio rising to challenge Hollywood’s major conglomerates in just over a decade is forcing the industry to reconsider how they approach risk. A24's success is built almost entirely on original stories, and new directors. Their model demonstrates how independent studios can compete, and win within the industry without relying on franchise IP.

Neon, another independent studio, has built its identity focusing on original films, and has earned Academy Award recognition with films like Anora. Together, the achievements and reach of both Neon and A24 reveals the large, underserved audience eager for original stories that the industry underestimates. They’ve shown that investing in people and their visions remains essential, and those studios willing to invest have the opportunity to build commercial success and credibility within the industry. If larger conglomerates continue to play it safe, the next wave of influence in the film industry may well be led by the independent studios daring to bet on talent and bold ideas.

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