.widget.ContactForm { display: none; }

Tuesday, August 7, 2018

New Horizons: Cinema Returns to Saudi Arabia

The official announcement came in March 2018. After months of planning and behind-the-scenes meetings, Saudi Arabia’s Ministry of Culture and Information announced the nation’s first law for cinema—heralding the return of commercial movie theaters to the country following a 35-year absence. The return of cinemas to Saudi Arabia is one of several reforms introduced by Crown Prince Mohammad bin Salman Al Saud’s Vision 2030 plan, a set of initiatives intended to diversify the country’s economy and open up investment from the rest of the world. 

All the pieces had already been put in place since December, when a delegation led by NATO President & CEO John Fithian traveled to the country to meet with officials to determine the best approach to bring the movies back to Saudi Arabia. Days of meetings and discussions ensued, with progress quickly accelerating toward a positive resolution. NATO issued a press release hailing the opening of the Saudi movie market by December 11. Moments later, AMC became the first circuit to publicly signal its intent to enter the market, announcing a Memorandum of Understanding (MoU) with Saudi Arabia’s sovereign wealth fund, The Public Investment Fund. 

In January, Sony’s The Emoji Movie and Dreamworks Animation’s Captain Underpants: The First Epic Movie made history by becoming the first films shown the country’s first public screenings since the ban. The screening was held at a state-run cultural hall in Jeddah. According to a report from Reuters, the makeshift cinema drew upon the essentials to provide Saudi audiences their first taste of the moviegoing experience at home in decades: a projector, red carpet, and a popcorn machine. 

Three months later, on April 18, AMC opened the first commercial cinema screen in Saudi Arabia since the ban: a converted symphony hall with one screen and 624-seats in Riyadh. “It was a very emotional moment,” remembers AMC CEO & President Adam Aron, who attended the event. “Everybody in the place felt the country was different because a movie theater had opened. For all of us in this industry, that moment is a reminder me of the importance—the place in the sun—our industry has. We tell stories, we spark imaginations, we entertain, amuse, and delight. That is now available to 32 million people who didn’t have that opportunity.” 

According to Aron, demand for tickets was so high that admissions for the cinema’s opening night sold out within 15 minutes. He believes it would have been faster had audiences known how to purchase tickets ahead of time. “No one knew about our website or how to buy tickets,” he recalls, citing the pent-up demand from generation of filmgoers who could now visit a cinema in their own country. “The next day we began putting out tickets on sale one day at a time because we were afraid that we would sell out for three months and people would lose the enthusiasm to buy a ticket. By the seventh day, people had a better sense of where to go to get tickets. We sold out that night in 45 seconds.”

 

AMC is in the process of converting that location into a properly furnished multi-screen location, and anticipates growing its presence throughout the country in the coming years. It only took two weeks for Saudi Arabia’s first cinema to find a competitor in the same city. VOX Cinemas, owned and operated by Majid Al Futtaim, one of the region’s leading leisure real estate developers, opened the country’s first multiplex, a four-screen complex in Riyadh, on April 30. “It is the largest economy in the Middle East and North Africa, by far: a market of 32 million consumers, the vast majority of which are under the age of 25,” shares Ahmed Ismail, CEO of Majid Al Futtaim Ventures, emphasizing the market’s economic significance. “Saudi Arabian consumers spend $30 billion on travel, leisure, and entertainment outside the kingdom of Saudi Arabia.” Expectations for Vox in Saudi Arabia are therefore quite high; when asked about the circuit’s intended pace of growth in the country, Ismail shared he would be disappointed if they hadn’t reached 100 screens by the end of 2019.

As of this writing, AMC and Vox are the only two exhibitors with the necessary license to open and operate cinemas in Saudi Arabia. That isn’t to say interest isn’t rife across the industry; they are joined by a string of global circuits who also see great potential in the Saudi market. Players such as CinemaCity, Cinepolis, iPic, and Vue have all openly expressed interest in opening their own theaters in Saudi Arabia. Though additional licenses are likely to be granted, it isn’t certain who they will be awarded to. That hasn’t deterred the ambition of Hamid Hashemi, President and CEO of luxury cinema chain iPic Entertainment, who views the Saudi market as the ideal fit for the international expansion of his brand of cinemas. We’ve been approached by a lot of operators in different countries, from Dubai to Europe—but these are all pretty saturated with movie theaters. Saudi Arabia, however, is an opportunity to walk in and completely change everything,” says Hashemi. “It’s a once-in-a-lifetime opportunity.” According to its CEO, iPic plans to build 18 locations in Saudi Arabia over the coming years—a number that could easily increase to 25 or 30 due to the potential size of the market. 

iPic isn’t the only premium brand eyeing the market. Formats like IMAX and 4DX have already begun making inroads in the market, looking to make an impact with the country’s fledgling audiences. Immersive seating technology 4DX is slated to open three auditoriums in Saudi Arabia through a partnership with CinemaCity, expecting as many as 750 thousand admissions in its first year of operation. IMAX has already staked its presence in the market, opening its first screen in Vox’s inaugural multiplex in Riyadh. IMAX has an agreement to open four additional screens at Vox locations in Saudi Arabia and expects to add 15 to 20 more auditoriums over the coming years. 

Cinema in Saudi Arabia stands out as an anomaly, particularly in the entertainment industry, where the introduction of a brand new market with such potential is practically unheard. “In my 26 years of working with NATO, I’ve never encountered a completely blank slate,” admits John Fithian. Saudi Arabia’s General Commission for Audiovisual Media (GCAM), the government agency tasked with granting cinema licenses in the country, anticipates there will be over 350 cinemas and more than 2,500 screens by 2030. If that comes to pass, Adam Aron believes cinema could become a billion dollar in the industry in the country. “$1 billion is an aspirational number,” shares the AMC CEO. “It could get there, it might fall short—but it has got to be at least a half-billion dollar market.”

With every opportunity, however, comes a fair share of risk. “Here you’ve got the opportunity to develop a new industry—literally—from scratch,” says Andrew Cripps, president of distribution at 20th Century Fox International. “Decisions made today are going to have a lasting impact.” While content security and piracy rank high among Cripps’ concerns, he also warns that pricing at this early stage will provide a crucial benchmark going forward—singling out the long-term harm that could be caused by high leisure and entertainment taxes in the country. “We want to make sure the pricing doesn’t price out a large segment of the population,” he notes. “We have to be careful because I don’t think it’s in the long interest of distribution or exhibition to see entertainment taxes going up around the world. We need to make sure that doesn’t become a precedent.”

Gender segregation is a fact of life in Saudi society, and presents arguably the greatest challenge in the context of cinema operations. The NATO delegation that traveled to Saudi Arabia in December dedicated a considerable amount of time to the topic. According to John Fithian, a number of different models were discussed in those meetings: complete separation, by complex, auditorium or showtime; split levels by complex, with a mezzanine and a main floor assigned to different genders; and divisions down the aisle, where a partition would divide sections in the audience. Ultimately, the VIP opening night gala for Saudi Arabia’s first cinema featured the simplest, and most equitable, solution on the table: full integration between genders. Since then, however, audiences have been segregated by showtime: one for families and single women, and one for single men.

Censorship emerges as another major challenge in establishing a Saudi film industry, particularly when considering the diversity of ideas and values that will be making their way to the country through its new cinemas. MPAA head Charles Rivkin, who previously served as Assistant Secretary of State under President Barack Obama and Secretary John Kerry, considers cultural sensitivity an indispensable tool in addressing the topic while simultaneously promoting economic growth. “I spent a lot of time with the GCC [the Gulf Cooperation Council, comprised of six Middle Eastern countries, including Saudi Arabia],” says Rivkin. “Most GCC countries have 2025 or 2030 plans to diversify their economies and reduce the dependence on oil. I was really pleased to see that entertainment and film is always at the heart of these plans across the region; this is a good business, they see the job creation capabilities. The fact that the Kingdom of Saudi Arabia has embraced cinema is a good thing. Our studios have been selling to the region for a long time and we’ve successfully dealt with the cultural issues for every genre.” 

Fithian believes the establishment of a ratings system in Saudi Arabia is a step in the right direction as a means to limit censorship and government intervention in film content. “We were strongly encouraging that, as opposed to a system like China’s where it’s just censorship—one-size fits all—and a movie is either accepted into a country or not,” he says. “A two-step process of having a censorship review plus a ratings system probably means we can get more content targeted to different ages into the market.” Black Panther, for example, the first film to play at AMC’s Riyadh location, was reportedly trimmed by around 40 seconds for its Saudi release. 

While a ratings system can help bring more titles to Saudi audiences, many executives don’t believe there will be an abundance of options at the cinema—at least at the outset. Distributors expect blockbuster fare to be the best fit in the market in this nascent stage; superheroes, family films, action-adventure—the sort of films that already enjoyed success elsewhere in the region. Ultimately, however, Fox’s Andrew Cripps believes that Saudi Arabia will need to invest in creating its own domestic productions in order to achieve its full potential, “If you look at the most successful markets around the world, the ones that are most healthy and vibrant are those with strong local productions as well as Hollywood content.”

In time, when all is built and done, Saudi Arabian audiences will wield the most power and influence in determining the future of their nation’s film industry. Majid Al Futtaim’s Ahmed Ismail is hopeful at this prospect, particularly when looking at the country’s younger generation. “It’s an exciting time to be in. Saudi youth are incredible creative, they have one of the highest YouTube consumptions per-capita in the world,” he says. “It’s a rebirth moment for the country and the region. Cinema—exhibition, distribution, and content creation—it will play an extremely important role in the culture and renaissance of Saudi Arabia.”

The post New Horizons: Cinema Returns to Saudi Arabia appeared first on BoxOffice Pro.



from BoxOffice Pro

0 comments:

Post a Comment