For almost a decade, producers Lars Knudsen and Jay Van Hoy helped make some of the biggest film festival sensations, from “The Witch” to “American Honey.” In 2016, though, their production company Parts and Labor hit a wall. “I’m very proud of everything we did,” Knudsen said over Zoom this week, “but we couldn’t really get out of the gate. You get a film into Sundance or Cannes and it just doesn’t do anything. It wasn’t sustainable. There had to be a way to not only make a movie create a career path.”
Knudsen and Van Hoy parted ways in 2016 and began producing independently. When Knudsen was introduced to director Ari Aster and produced his 2018 debut “Hereditary,” it led to a new partnership. “It felt effortless to work together, which is all you want as a producer,’ Knudsen said. The pair created a new production company, Square Peg, ahead of Aster’s sophomore effort “Midsommar” in 2019.
In recent months, thanks to a first-look TV deal with A24 to cover their overhead, Aster and Knudsen are scaling up their efforts to support more established filmmakers with edgy, unusual visions that might need extra help getting made.
With the filmmaker’s third feature “Beau Is Afraid” now in theaters, Square Peg has two projects in post-production and plans to develop a slate of three to four features per year in addition to various series. “I always wanted to build a company with a filmmaker, where you have a director and producer build up a brand,” said Knudsen, citing Lars Von Trier and Peter Aalbaek Jensen’s Zentropa as well as Brian Grazer and Ron Howard’s Imagine Entertainment as inspirations. “We saw an opportunity to create a company that could create outsider work that can still fit into the mainstream,” Knudsen said.
Knudsen moved the U.S. from Denmark over 20 years ago to work as an intern for Scott Rudin, which was where the young producer met Van Hoy. Knudsen recalled the awe he felt at the time helping out with projects from Wes Anderson and the Coen brothers, among others.
“You’re in an office with an insane slate of projects, some of the biggest filmmakers in the world are going in and out of there, and you get a certain high from it,” he said. “The adrenaline is pumping all day long. You get to know yourself and your limits. You form bonds with the people you work in the trenches.” He acknowledged that Rudin’s brutal working environment has a less-than-stellar reputation now. “I work very differently than him,” Knudsen said. “It’s a different environment.”
For the moment, Square Peg maintains a small staff of five, including head of TV Emily Hidlner and Tyler Campellone. In a separate interview with IndieWire, Aster credited his colleagues for investing the time in developing new projects that he didn’t have. “I’m so busy with my own work,” he said. “These are the people that I love working with who have really helped me as a filmmaker. In the end, they’re the ones who will be on the ground with these filmmakers. I just feel like anybody would be lucky to have their support.”
But Knudsen said they were starting to reach the limits of their bandwidth. “I think we’re ready to expand,” he said. “The slate is quite big.”
While many Square Peg projects in development haven’t been announced yet, the company is in the late post-production stages for “Dream Scenario,” a costly A24 undertaking starring Nicolas Cage as a man who appears in the dreams of every person on Earth. They’re also developing projects with Russian exile Kantemir Balagov, DIY animator Don Hertzfelt, Canadian auteur Guy Maddin, and Chilean provocateur Sebastian Silva.
On the TV side, Knudsen said the team is developing over a dozen projects, including an adaptation of JG Ballard’s “The Drowned World,” the Japanese horror anime “Uzumaki,” and Nick Dranso’s novel “Acting Class” (previous reports that Aster was directing the latter as a feature with Joaquin Phoenix and Emma Stone were incorrect).
Aster said that the company wasn’t limiting itself to genre pitches, despite his success in that department. “I think at first we were self-conscious about avoiding horror,” he said. “We’re relying on our own taste. If we read something and like it, we might want to do it. Or we’re working with filmmakers I’ve always loved and sought out.”
Maddin’s new project, “Rumors,” has been scheduled to shoot this fall. Circumventing the challenges of the U.S. market, Square Peg set it up as a Canadian-German co-production. “That’s something we want to explore with films that may not be an obvious fit for a distributor,” Knudsen said. As for Hertzfeltdt’s long-gestating feature “Antarctica,” usual one-man-band will collaborate with a team of animators for the first time. “His scripts is one of the best we’ve ever read,” Knudsen said. “We want to keep going with him.”
Knudsen said he was finding more paths forward with film projects than TV. “You can keep knocking on doors with film,” he said. “On TV, if you pitch and say no it’s hard to get someone else to do it.”
Aster was more circumspect, citing the declining box office for arthouse movies and less interest in supporting original stories from studios and streamers. “Film seems to be dying,” he said. “So few people go to the theater for small films or even medium-sized films, but then records are being broken for these giant tentpole films. It’s not like people aren’t going anymore, but the audience has changed. I don’t really feel like I have my finger on the pulse on anything because the films I love are…”
He trailed off, then continued. “It’s not that they’re diminishing in number. They’re still being made,” he said. “They’re just not being supported by audiences.”
To address that, Aster said they were looking to help determine the best way to develop projects from singular filmmakers that might not otherwise get made in today’s climate. “There are more studios, and there are more platforms, than ever for work — and yet it feels like the aversion to risk is just off the charts. It has never been this bad,” he said. “There are so many more places to go, but far fewer places that are willing to really champion art for art’s sake.”
Aster gained the support of A24 early in his feature filmmaking career, though “Beau Is Afraid” took over a decade to get made. “It’s actually very painful trying to get these things you really believe in going,” he said. “We’re trying to make the kind of movies we want to see more often, and support the kind of filmmakers that we believe in.”
Of course, the company was also focused on supporting Aster’s own filmmaking endeavors, from “Beau” to his next mysterious project, also reported to star Phoenix. “It was such a challenging film to make,” he said, acknowledging that its $35 million budget was only tenable because Aster’s previous movies had performed at the box office.
“These movies need to do well for you to keep making them at a certain level,” Knudsen said. “This is obviously Ari making something he’s been wanting to make for a long time. I always felt like ‘Beau’ had to be the third movie. That was the only way to make it was for that budget. There was no way to make it for less. We went all in.”
While the cost of “Beau Is Afraid” resulted in A24’s largest in-house production to date, Knudsen said many of their projects were aiming for under $5 million to make them more palatable to potential financiers, including A24. “I’m fortunate now that I can go direct to companies like A24 so we can focus on developing and making the films and not the process of getting independent financing,” he said.
He has tried to avoid the prospects of developing features independently and selling them upon completion, as he did for every project he produced with Van Hoy at Parts and Labor. “It was so grueling,” he said. “I think it’s becoming harder today. Whenever we take something on I always try to work through a budget first and a finance plan to get it made.”
Knudsen sounded ambivalent about the apparent contraction among studios that used to ingest more projects, noting that he and Van Hoy launched their producing careers in the midst of the 2008 recession. “That was right when felt like we were hitting our groove,” he said. “It’s always a welcome challenge.”
An A24 release, “Beau Is Afraid” is now in theaters everywhere.