MUBI seeks to take on A24 and NEON

[BluBonnet]

How big can MUBI become?

Is MUBI Really Worth $1 Billion? Inside Efe Cakarel’s Plan to Make the Global Streamer Cooler Than A24

Mubi, the upstart indie film company that made “The Substance” into an Oscar sensation, traces its origins to Tokyo on New Year’s Eve 2006, when Efe Cakarel, then a vacationing Turkish-born film fanatic, couldn’t find a copy of Wong Kar Wai’s “In the Mood for Love” on any video store shelf. Frustrated, he imagined a website from which indie movie lovers like himself could stream the best films from international auteurs. He started writing the business plan for Mubi on the flight back from Japan to San Francisco, seeing it as an edgier, artsier alternative to Netflix. “I hadn’t been to a film school,” Cakarel, 49, says. “I’d never been to a film festival. I knew nobody. I just had this idea of creating a cinephile’s dream.”

Though Cakarel had never attended Sundance, he did have a deep knowledge of technology, having graduated from MIT with an engineering degree before enrolling in Stanford’s MBA program. After working as an investment banker at Goldman Sachs and later graduating from Stanford, he sat in a café in Palo Alto and coded a site that, by 2007, would become ‘The Auteurs’ platform, renamed Mubi in 2010. 

It was a risk — “All my savings went into it,” Cakarel says. So from the beginning, Cakarel was hands-on. “We built our own content delivery network, our own encoding tool chains and our own streaming services,” he says. “But we estimate that it costs us 70% less for our infrastructure than those who rely on other platforms.”

Fast-forward two decades, and Mubi, which was recently valued at $1 billion, is nipping at the heels of A24 and Neon, the biggest operators on the indie scene. The company, headquartered in London, is currently on the ground at the Cannes Film Festival, debuting an impressive four films in competition, including Joachim Trier’s “Sentimental Value,” Akinola Davies’ “My Father’s Shadow” and “The History of Sound,” a love story that’s one of the highest-profile films at the festival thanks to the red-hot pairing of Paul Mescal and Josh O’Connor. Another of Mubi’s Cannes premieres will be Kelly Reichardt’s heist thriller “The Mastermind,” which also stars O’Connor, the first production it has developed and fully financed.

When not stepping down the red carpet in a tux, Cakarel will be brandishing his checkbook, deploying it to outbid other indie companies for the sexiest projects and films on offer at the festival. It’s a statement-making moment for Mubi, which has evolved from a niche streaming service to a full-fledged studio involved in theatrical distribution and production. The company, with more than 400 employees in 15 markets, is on top of the world after the $83 million global success of last year’s “The Substance.”

Cakarel has been on a spending spree. According to sources, Mubi landed “The History of Sound” in the spring, after A24 aggressively bid on the period piece. Mubi’s innovative marketing on “The Substance” was enough to convince filmmakers that the new boutique distributor was the best suitor to get audiences in theaters for a steamy gay romance.

But Cakarel isn’t just interested in topping the box office. He wants to reinvigorate moviegoing culture by creating an ecosystem that extends from streaming to publishing to art-house theaters, offering movie lovers the chance to see the kind of offbeat, visionary work that other studios are afraid to make. In doing so, he’s intentionally creating a worldwide community of film devotees that has been neglected for too long. 

Mubi is a privately held company, and Cakarel is vague about its finances, beyond saying that it has double-digit profit margins. It’s also about to have even more firepower. Venture capital firm Sequoia is leading a $100 million round that Mubi will use to fund acquisitions and new productions. Cakarel is also considering taking Mubi public at some point in the future, “in order to access capital markets.” Mubi’s growth over the last decade has been seismic, moving from 100,000 subscribers in 2016 to 20 million registered users around the world in 190 territories.

The company’s impressive audience has allowed it to join the original-content business — a crowded and challenging field. But there is still a void in the landscape for the kind of elevated movies that ’90s-era Miramax, then run by Harvey Weinstein, used to bring to the masses with the help of aggressive Oscar campaigns. But that business — one that relied on a dependable audience of older, sophisticated moviegoers — has largely evaporated post-COVID, with art-house breakouts becoming something of an endangered species. Many people in the industry are skeptical that Mubi can maintain its enormous growth.