(Welcome to the Entertainment Strategy Guy, a newsletter on the entertainment industry and business strategy. I write a weekly Streaming Ratings Report and a bi-weekly strategy column, along with occasional deep dives into other topics, like today’s article. Please subscribe.)
Going into today’s article, I want you to keep an open mind. I’m pouring cold water on the overheated hype train for multiple theatrical genres and mini-majors, so part of me is defensive. I’m constantly asking myself, am I overreacting? Am I misreading the news coverage?
Then I read glowing profiles of these very companies—which I’ll share later on—and I tell myself, nope, you’re fine.
As I noted in my last visual of the week, often in the day-in and day-out of the streaming wars, we don’t update stories that made headlines in previous months or years. If a movie studio or production company has a breakout hit or a big flop, everyone notices and that dominates the conversation for a week or, more often, a day. Like Blumhouse’s recent disappointment, M3GAN 2.0. Or Angel Studios’ surprise hit King of Kings.
Yet, if those same studios don’t release a big flop or a big bomb, they can fly under the radar.
In 2024, A24’s success catapulted an entire discourse around their “disruption” of film. Since then, not a peep. So we (the media) should check in on them again.
I had originally written some of this article at the end of April as part of a “What I Got Right, What I Got Wrong” update, but A24 and Angel Studios had some big, buzzy releases coming up—including what I thought was a romcom at the time and an R-rated comedy for adults, two genres Hollywood needs to make more of!—so I held off until now. And I’m glad I did.
But it’s not all negativity…Stay tuned to the end for my takeaways from this analysis, which are pretty nuanced.
A Quick Aside…Would You Take Studio A or Producer B?
Here’s a quick mystery graphic. One of these entities is, according to the coverage, on a major losing streak; the other company has mostly flown under the media coverage radar.
Which track record would you rather have? Stay tuned for the answers…
Let’s Talk Box Office Numbers First
Today, I’m talking box office numbers. And some people have issues with box office reporting.
Inspired by Will Harrison and Richard Rushfield, I should mention that estimating a theatrical film’s profitability can be hard, and I try to avoid making definitive statements. But to summarize what we do and don’t know about film profitability…
- Studios only collect about 50% of total domestic box office (called “theatrical rentals”) in America and less overseas. (Much less in China, if they can even get the money out of that country.)
- Often, budgets get “reported”, but those numbers can be fuzzy or inaccurate.
- Marketing costs are a complete unknown and tough to estimate.
- The theatrical waterfall—meaning earnings in home entertainment sales, Pay 1 licensing, etc—has changed dramatically over the last six years or so, making calculations about total revenue based on box office much more uncertain.
- Many smaller studios like A24 sell off their films’ overseas rights, often for an unknown number.
That’s two completely unknown variables (marketing spend, overseas sales), two uncertain variables (budget, theatrical waterfall revenues), and one well-known number (U.S. domestic theatrical rentals).
But let’s not go crazy. We usually do know US and global box office, along with a very directionally-accurate estimate of production budgets, so we can roughly estimate if a film made a lot of money, possibly just broke even, or lost a ton of money. Sure, nothing is certain when it comes to film finances, but it’s not like we don’t know anything. And box office grosses are strongly correlated with performance in later windows. Not perfectly correlated, but close enough that we can make some estimates.
With that out of the way, let’s look at a few independent studios…
A24: Still Overvalued
Since I last wrote about A24 (post-Y2K flop), well, things haven’t been great. Or, should I say, they haven’t been great for a company valued at $3.5 billion (with a “b”). At best, it’s mixed. At worst, it indicates that, no, A24 is not worth $3.5 billion, and they certainly aren’t providing a blueprint for saving cinema/Hollywood.
Since last December…
- Babygirl grossed $28 million in the US and $63 million globally off a $20 million budget, so good! With $14 million from the US, this will make money, especially in later windows. That said, A24 sells global rights, so the global over-performance doesn’t help the bottom line, since A24 likely pre-sold foreign rights for a set amount. How profitable was this? Likely made money.
- A24 secured the rights to, after a bidding war, The Brutalist in the US, which made $16 million domestically. How profitable was this? It depends on what A24 paid for it, but I’d say it likely made money.
- They distributed Parthenope, which made $300k in the US, and co-produced and distributed On Becoming a Guinea Fowl, which made made $200K globally. How profitable was this? The impact of either film on A24’s bottom line is probably negligible.
- They produced and distributed Opus, which cost $10 million and has grossed $2 million globally. How profitable was this? Definitely lost money.
- Death of a Unicorn (I really liked this pitch and cast!) flopped, grossing $15.9 million globally off a $15 million budget. How profitable was this? Likely lost money.
- Warfare cost $20 million and only has $25 million in the US and $32 million globally. How profitable was this? Likely lost money.
- And Legend of Ochi cost $10 million, grossed $2.4 million in the US. How profitable was this? Definitely lost money.
- Friendship grossed $16 million in the US, but I couldn’t find a budget for this one. How profitable was this? Depending on the cost of the talent attached, I’m guessing this lost money.
- Bring Her Back reportedly cost $15 million, grossed $19 million in the US and $3 million globally. How profitable was this? Likely lost money.
- Materialists grossed $35 million in the US, then $14 million overseas, but Tom Brueggemann cited reporting that A24 sold the overseas rights for “$13 million”. How profitable was this? With a $20 million budget, this one made money.
- Sorry, Baby is currently sitting at less than $1 million at the US box office. I don’t have a budget.
- Last weekend, Eddington, Ari Aster’s star-studded latest “Neo-Western satirical black comedy”, which cost $25 million to produce, grossed $4.2 million in its first weekend. How profitable was this? This will likely lose money, if not a lot of money.
Again, it’s hard to rigorously determine profitability without knowing marketing costs and foreign sales, but you can’t look at any of these films and say, “Man, A24 is just minting money!” That’s seven clearly unprofitable films, three films that made money, and one film that might have broken even. Again, this is a company that, according to its last funding round, is worth over $3.5 billion. Or half of what Skydance paid for Paramount Global.
The TV side isn’t much better. A24 has had four flops on Prime Video this year—and didn’t make any ratings charts I track—including…
- Overcompensating.
- The Second Best Hospital in the Galaxy.
- #1 Happy Family USA.
- Mo.
Frankly, A24 isn’t being valued at the right price, and that will have consequences long term, like A24 shuttering their documentary division. Or shifting to making big budget, genre, IP-based films, like their upcoming fantasy film based off of the hit video game, Elden Ring.
You can’t create a Non-Dē (non-dependent), self-sustaining film ecosystem without valuing things at the right price, either movies or companies. I, personally, enjoy A24’s bold filmmaking, as do many of my readers. To ensure that keeps happening, we need to analyze these companies honestly, not hyperbolically.
Back to the Graphic!
Here’s that previous chart, with company names attached.
That’s right, so far, in 2025, Blumhouse has released four films, with estimated budgets of $62 million, and they made $81.5 million in the US, plus $123 million globally, which Universal keeps since they have international distribution. A24, on the other hand, has spent (roughly) $130 million to earn $118 million in the US and $141 million globally (but remember, they sell off global rights).
What matters is budgets. Blumhouse spent half of A24 to achieve slightly less global revenue; both companies’ 2025 film slates might have just broken even in the first window so far this year. (I’ll share a chart comparing budgets at the end of this article.)
Admirably, Jason Blum went on The Town to talk about his losing streak. When will A24 come on to talk openly about their struggles?
What’s the Deal With Mubi?
We’re just getting started with this issue, but the rest is for paid subscribers of the Entertainment Strategy Guy, so if you’d like to find out…
- Why I’m worried about MUBI
- And why Angel Studios looks a lot like A24
- And two more visuals comparing these studios to two mega-hit films and comparing their budgets…
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