Saudi Arabia sees its future up on the big screens
Abu Dhabi - Following Saudi Arabia’s announcements that women would soon be permitted to drive and both sexes would be allowed into stadiums together came the next seismic shift to shake the 85-year-old monarchy.
Thirty-five years after cinemas were outlawed in the country that is home to the two holiest sites in Islam, authorities lifted the ban in what could result in as much as 25% of the estimated $20 billion Saudis spend overseas on entertainment being spent at home.
Before the announcement, Fadi Riachi, co-founder and managing director of Layout Management Services, a Dubai firm that serves developers and investors looking to build and operate cinemas, said the Saudis have asked potential partners to prepare paperwork to bid on contracts to build cinemas in the kingdom.
Riachi, a Canadian of Lebanese descent who has lived in the United Arab Emirates since 1997, said Saudi businessmen expected the government to issue guidelines for the regulation of cinemas soon.
He said Saudi developers at the Middle East Council of Shopping Centres (MECSC) conference in October in Dubai said they were “all very sure that it’s going to happen and across the whole kingdom, from east to west,” Riachi said.
Regional reports said cinemas in the kingdom would be operating by early next year.
Saudi Arabia is being reformed based on Crown Prince Mohammed bin Salman bin Abdulaziz’s Vision 2030, which covers all aspects of the economy as the country tries to move from its dependence on oil. A key part of the projected economic growth of the kingdom would rely on tourism, entertainment and hospitality sectors.
In September, Saudi Arabia’s Public Investment Fund (PIF) announced the creation of a company with an initial capital of $2.67 billion to invest in the entertainment sector, which is intended to contribute about $2.1 billion annually by 2030.
Riachi said that regarding the Saudi businessmen with whom he spoke: “All things related to shopping were also touched on but the entertainment part — the cinema part — took a major part of this whole gathering. The Saudis were active about it, meeting this guy, meeting that guy. It was a 3-day conference. The Saudis even had panel discussions.”
Riachi said dozens of cinemas would open in the 24 months following the official government decree. “In the first two years, you are looking at around 50 to 70 locations, minimum,” he said.
Such a change would be dramatic for a country that hasn’t had public cinemas since they were forced to close following the rising conservative influence throughout the Middle East in the late 1970s and early 1980s.
Ahmed al-Khatib, chairman of the General Entertainment Authority (GEA) told Reuters that the government in Riyadh was “winning the argument” with conservatives. He said most Saudis were moderates. “They travel. They go to cinemas. They go to concerts. I am counting on the middle segment, which is about 80% of the population,” he said.
As interesting as cinemas in Saudi Arabia sounds, it is just as intriguing to think about the process involved in bringing something back to a country where it hasn’t existed for generations.
Other issues Riachi said would be addressed in the yet-to-be-issued regulations included censorship (“which is a big thing”) and segregating the sexes in the theatres (“which may or may not happen”).
A day after reversing the cinema ban, the kingdom announced that it had signed a memorandum of understanding with one of the world’s largest cinema chains, AMC Entertainment.
“The PIF will work with AMC Entertainment to explore ways to show and distribute cinematic content, as well as relevant prospects for investment and partnership in the kingdom,” a statement on the official Saudi news agency said.
“At the PIF, we believe that the entertainment sector in the kingdom has huge potential and a promising future,” SPA quoted a spokesman as saying, adding that the kingdom’s untapped entertainment sector is expected to near $1 billion.
Riachi said: “If they (AMC) do come, it is going to hurt the rest of the people [who are in the cinema consulting business] around here. AMC is huge and Saudis and Americans right now, well, they are very close.”
Regardless of who enters the market, Riachi said: “It is going to be partnerships and joint ventures. It is not going to be a straightforward relationship in which you have a tenant and a landlord. Most of the developers in Saudi Arabia have six, seven, eight, nine malls each. So the question will be if they go with one partner or multiple operators.
“I’ve been here for 20 years and I still lack the 100% understanding of certain cultural realities,” Riachi said. “I don’t think Americans can come and immediately sign a [joint venture with a Saudi developer] and then think it’s going to be a honeymoon. It’s not going to be a honeymoon.”