How Indie Studios Use the Streamers' Own Money to Outbid Them

The licensing model that built the streaming era ends up costing platforms more to rent IP than they were willing to pay to own it. What, if anything, can they do about it?

Bidding wars are where market-defining precedents are made and broken. At the outset of a negotiation, the two words that tell a dealmaker the most about how much (or how little) fun they’re about to have are “It’s competitive.” Aggressive competition for the most sought-after projects, talent, and IP during the industry’s “Streaming Wars” era (roughly 2013–23) upended decades-old dealmaking norms — with consequences that the industry is still reckoning with today.

Winning a bidding war can also be a transformative moment for a company’s future — but whether that’s for good or for ill depends on the deal. Netflix’s aggressive outbidding of its rivals for MRC’s House of Cards set the streamer on its path to dominance in original content production and exhibition. Vivendi’s acquisition of Universal in 2000, widely regarded as an overpay, led directly to the company’s near-collapse in 2002.

Hollywood just loves a good bidding war. And in today’s TV business, A24 — the prestige indie studio whose auteur-driven, aesthetically distinctive films have, in less than 15 years since its founding, earned the company unique and enviable cachet with critics¹, investors², filmmakers³, and audiences⁴ alike — wins a lot of them.

Last week, the Ankler’s Lesley Goldberg published a piece about A24’s disruptive impact on the TV business, with “fast deals and creator-friendly terms [that] make the studio a favorite among agents, and a headache for everyone else.” Goldberg addresses the question of “How A24 Wins Bidding Wars Beyond Money,” crediting the studio’s success to several factors, including its generous backends, creator-friendly development process, passionate advocacy with network partners, and willingness to contribute additional production funding and marketing resources to support its shows. And above all, she writes, “Speed is the separator.”

How to Really Win a Bidding War

Goldberg offers a robust answer to a very carefully framed question — one in which the words “Beyond Money” do a lot of heavy lifting. Because the main way that A24 wins these bidding wars is with money. Lots and lots of money.

A24 is one of a small handful of independent studios that seek to secure the most sought-after projects by intentionally and consistently offering well above top-of-market financial terms — seven-figure option fees, purchase prices that occasionally tack on an eighth digit, and pilot writing fees that compete with the highest-level feature scriptwriting deals.

That’s not to say that Goldberg’s reporting is inaccurate, or that A24’s creator-friendly practices — especially the speed and decisiveness she highlights — don’t matter. But while I’m sure writers, rightsholders, and their representatives love how quickly the offers arrive, I suspect it’s all the extra zeroes that really win those sellers over.

I also understand that Goldberg’s analysis wouldn’t have been as interesting or instructive had it just been her copying and pasting a gif of Mad Men’s Don Draper shouting “That’s what the money is for!” But while “money wins bidding wars” is about as exciting of a headline as “water is wet,” there is actually something very interesting — and frankly weird — going on here.

How Can David Afford to Outspend Goliath: With Goliath’s Own Money

To win the hottest projects on the market, A24 must outbid the likes of Netflix, Amazon, and Apple, companies worth roughly 100 to 1,000 times A24’s own (already dubiously inflated) value. How do they do it? With their rivals’ own money.