CinemaCon panel tells the inside story of Saudi Arabia's new cinemas

ScreenerBlog

The annual International Day program at CinemaCon, the National Association of Theatre Owners’ big show in Las Vegas, didn’t have much trouble coming up with timely and exciting topics this year. There were two obvious choices: the formation of the Global Cinema Federation, the first international advocacy and education alliance of international cinema circuits, and the opening of Saudi Arabia to movie theatres after a 35-year boycott.

CinemaCon’s panel discussion on Saudi Arabia benefited from the insights of the first two exhibitors to establish new cinemas in the kingdom: Adam Aron, CEO and president of AMC Entertainment, who opened the first theatre in Riyadh on April 18, and Ahmed Ismail, CEO of Majid Al Futtaim Ventures and owner of the VOX Cinemas chain, which debuts in Saudi Arabia very shortly. Also participating in the panel were Andrew Cripps, president of theatrical distribution at 20th Century Fox International, and Duncan Clark, president of distribution at Universal Pictures International.

Aron explained this historic breakthrough as the result of the rise to power of 32-year-old Crown Prince Mohammed bin Salman. The AMC exec noted that 70 percent of the population of Saudi Arabia is under the age of 30, and that this loosening up of the culture is the Prince’s way of maintaining his authority amidst the social upheavals in the Middle East.

Ismail saw an economic motive, observing that Saudi Arabia has 32 million consumers, the majority under 25, and that they spend some $30 billion on travel, leisure and entertainment outside the country. Opening up movie theatres, and Saudi Arabia’s ambitious “Vision 2030” plan to reform the economy and encourage foreign investment, is part of the effort to stop that “leakage,” as Ismail put it.

Aron called his opening in Saudi Arabia “quite a night.” The theatre is a converted concert hall, currently one screen seating 624; three screens will be added later. At the premiere (of Black Panther), men and women sat together, but the venue currently has separate screenings designated for families and for single males. “It will change again and again,” Aron said of the seating policies, predicting that integration of the sexes would eventually become commonplace in Saudi theatres.

Ismail called the pace of change in Saudi Arabia “unprecedented but not unexpected,” noting that he saw “early signs” of the cultural shift and had in fact been preparing for his first cinema in the kingdom for a year and a half. His UAE-based company has had malls and other businesses in Saudi Arabia for ten years and employs some 2,000 people there; VOX Cinemas plans to invest SAR 2 billion in 600 screens over the next seven to ten years. And it has obtained a license not only for exhibition but for distribution, and will serve as the exclusive Saudi distributor for 20th Century Fox releases. Ismail’s hope is that down the road there will be enough Saudi screens to “allow local film production to flourish.”

“Any market worth its salt has thriving local production,” Clark observed.

Aron reported that tickets for his opening night sold out in 15 minutes, and now that tickets are available online, shows sell out in a mere 45 seconds. The current price is $20 (including a very high 25% tax), which Aron termed “too low.” He believes it could easily rise to $30 or $35. “The pent-up demand is so high, there’s no price barrier at the moment.”

All the panelists were impressed that Saudi Arabia has already put in place a movie-rating system with six different categories, including an “over 18” rating. Aron noted that only 40 seconds were cut from Black Panther and that Rampage has already been cleared for screening in the kingdom. But Cripps pointed out that the family film Ferdinand has faced some censorship issues.

Cripps, a distribution veteran, called what’s happening in Saudi Arabia “tremendously exciting”—and unique. “We’ve never seen a market that didn’t have a cinema infrastructure already in place… Decisions made today will have a lasting impact.”

In another informative session, Phil Clapp, president of UNIC, interviewed Alejandro Ramírez Magaña, CEO of major circuit Cinépolis and head of the new Global Cinema Federation, live by satellite from Washington, DC. The two outlines the priority areas of the newly formed GCF, which include movie theft, theatrical exclusivity, accessibility, technological standards, exhibition’s relationship with the studios and creatives, and international trade issues. One issue that may surprise Americans: the onus of paying music rights. (For example, Brazil pays 2.5% of its box office in music royalties, which Ramírez called “absurdly high.”)

Ramírez noted his excitement that the GCF represents over 70,000 of the world’s screens, which “gives us a lot of power and relevance.” Yes, International Day at CinemaCon was more relevant than ever.