Vox of the People: Majid Al Futtaim Ventures has big plans for Saudi Arabia
On May 4, the VOX Cinemas Riyadh Park became the second movie theatre in the kingdom of Saudi Arabia to open to the public after a 35-year ban, just a few weeks after the debut of an AMC single-screen cinema in the same city. The VOX venue, located within the Magic Planet Family Entertainment Centre, consists of four auditoriums, including the country’s first IMAX screen.
During CinemaCon in Las Vegas, Film Journal International had the privilege to meet with the formidable entrepreneur behind this historic opening: Ahmed Ismail, CEO of Middle East shopping, retail and entertainment giant Majid Al Futtaim Ventures and owner of its fast-growing VOX Cinemas subsidiary. The Riyadh Park cinema is but the first step in a very ambitious plan to invest SAR two billion (US$500 million) in 600 Saudi screens in the next seven to ten years.
Majid Al Futtaim Ventures entered the cinema business 18 years ago in partnership with Australian circuit Greater Union. Six years ago, Majid Al Futtaim bought out its partner and VOX (for “the voice of cinema”) was born.
“We’re very proud that we have a brand we created that grew from 50 screens when we bought out the business to 350-plus screens in six years,” Ismail notes, “and last year at CinemaCon was honored with the Exhibitor of the Year Award, which is a fantastic achievement for such a young brand out of probably the unlikeliest of regions when it comes to cinema entertainment.” VOX, headed by CEO Cameron Mitchell, currently has screens in the United Arab Emirates, Oman, Qatar, Bahrain, Lebanon, Kuwait and Egypt, many aligned with Majid Al Futtaim shopping malls and entertainment centers.
During a CinemaCon panel discussion on Saudi Arabia’s welcoming of cinemas under the new government of its 32-year-old Crown Prince, Mohammad bin Salman, Ismail said he “saw early signs” that change was coming. He later elaborated to FJI: “First of all, we’re a long-term investor and operator in Saudi Arabia. We did not land in Saudi Arabia two months or two years ago—we’ve been in the country for almost a decade. We have two thousand people working in Saudi Arabia, including five hundred Saudi women. So we have our finger on the pulse of the Saudi consumer—we see their spending patterns, we see what they buy, not just in Saudi but also in other markets when they come and visit our attractions in Dubai or Bahrain. It’s very clear when you have a young population and that population is watching as much YouTube content per day or twice the global average of YouTube content per day as anywhere else in the world, when you see how they consume content in our cinemas and how they come to our entertainment facilities, when you look at the $30 billion leakage [of consumer spending from the kingdom] and the falling oil prices, you could sense that something had to change.”
Ismail credits company founder Majid Al Futtaim with the foresight to greenlight the investment of $4.5 billion in Saudi ventures encompassing malls, leisure and retail well before the kingdom announced its “Vision 2030” initiative to diversify its economy. “We’re making an even bigger bet on opportunity in Saudi Arabia than just the cinema investment,” he notes.
But the bet on cinema was an especially bold one. “We’ve been building a cinema in Saudi Arabia for 16 months now—you don’t build a cinema in a day,” Ismail asserts. “It takes a year to build a box from scratch. We started building our first cinema within a family entertainment center in a new shopping mall in Riyadh. We didn’t know what content was going to be allowed or what the regulations would be. We took a risk. And that risk is paying off, because we’re going to have the first modern multiplex with an IMAX showing premium theatrical content. We’ve also been lucky in a way. It’s easy to say that we predicted or saw the change coming, but also we took a risk and we’re lucky.”
Asked how his operation in Saudi Arabia will be different from that of other countries, Ismail responds, “First of all, they’re going to be exclusively staffed and run by Saudis. We’ve been recruiting a local team to run and operate the business, and they’ve been spending time in VOX theatres elsewhere to understand the DNA of our operation. We have to be quite flexible and accommodating to the regulatory regime in Saudi Arabia—our app, for instance, had to be completely Arabized, to make sure that it’s usable by the entire population. In other markets in the Gulf, you can get away with English—most people would be able to use an English app. So we had to have a bilingual capability, and it had to be capable of selling ‘Bachelor Section’ tickets and ‘Family Section’ tickets… Our operating philosophy is about localization, to be able to serve customers and to be able to adapt to the fast-evolving environment in Saudi Arabia.”
As for programming, “I think initially Hollywood will have the lion’s share—Hollywood has the lion’s share of all box office around the region where we operate. Our box office is roughly 75 percent Hollywood, 20 percent Bollywood, and five percent Arabic. The five percent Arabic is really very, very small and not representative of the cultural heritage of the region and certainly of the demand profile. Especially with Saudi opening up, if you have a thousand-plus screens that would screen premium Arabic content, that creates enough box-office revenue to invest in the creation of that content. Prior to Saudi opening, the region lacked the scale to warrant investment in local content. So I think over time you will see the share of Arabic content grow—hopefully to somewhere between 30 and 50 percent over the long term.”
Ismail is optimistic about the approval process for movie content in Saudi Arabia. “There are a lot of encouraging signs. First, the censorship guide has been issued and it has very clear guidelines—it even includes a category for 18-plus. With Black Panther, there were hardly any scenes cut, maybe less than 40 or 50 seconds. If the country is really committed to Vision 2030 and you want to stop that $30 billion from leaking outside the economy, the only way to do it is to allow a thriving cinema industry to exist. And a thriving cinema industry cannot exist without a good supply of content.”
Ismail also notes, “Over the past five years, the box office has been driven largely by tentpole movies, big family movies, big superhero movies. And these movies play well across all cultures—most of them are good family movies that appeal to a large audience.”
Majid Al Futtaim Cinemas already has a distribution arm which will exclusively handle feature films from Twentieth Century Fox in Saudi Arabia. “We’ve had a great relationship with Fox over the years,” Ismail says. “We’re the leading exhibitor in the region, and…it became apparent to them about a year ago that we would be the best distribution partner. We offer a pan-regional platform, a modern platform, we have a great management team. But also we have some unique assets that differentiate us from all other exhibitors… We have invested a lot in analytics that allow us to collect data about our customers in cinemas but also other areas of entertainment. That gives a much richer data set that makes a partnership with a studio far more powerful.
“And I think we share with Fox a certain mindset, about the customer first, not the exhibitor or distributor. It’s about growing the pie and a commitment to quality and excellence—what we call great moments. If you come to our theatres in Dubai or Bahrain or Kuwait or elsewhere, we offer a much higher-quality cinemagoing experience than the average. We have a partnership with Gary Rhodes, who’s a Michelin Star chef, to offer a Michelin Star dining experience in ‘ThEATre by Rhodes.’ We have a fantastic VOX Kids concept, and we’re creating a teens concept that also incorporates gaming in the movie theatre. And we have great partnerships with IMAX and 4DX.” All these concepts, Ismail says, will be coming to the circuit’s complexes in Saudi Arabia, which he expects will house at least eight screens and as many as 20. Among the first locations on the drawing board are the Mall of Saudi and City Centre Ishbiliyah, both in Riyadh.
Ismail proudly points out that Majid Al Futtaim Ventures has gone “from zero to almost nine billion dollars in revenue in 20 years.” But he admits that the Saudi venture is a challenge. “We have to build double the number of screens it’s built in its entire 18-year history in half the time. But then we look at the opportunity and how well we are positioned—as a brand VOX Cinemas is well recognized and trusted by the Saudi customer and we in turn understand the Saudi customer, so if anyone has the license to win in Saudi Arabia, it should be us.”
Still, “talent is always a challenge. And speed. It’s a new industry. Landlords don’t understand how to do cinema deals, so there’s an education process there as well. But nothing that is completely insurmountable or something you wouldn’t expect in a new market. It’s a market with huge potential, a young market, content-savvy and content-hungry, with a good retail infrastructure. If this were Russia in 1990, this would have been different, because there were no shopping centers: Where would you put the cinemas? But Saudi has a lot of shopping centers where you can add cinemas.”
Ismail says that “Saudi customers’ reception to the news that we’re coming to the market has been incredibly positive, and we’re determined not to let them down.”
As for the young Saudis his company is currently training, “they’re super-excited. And proud to play a part in reshaping society. I’ve personally interviewed some of the team members who’ve come to join us, and they’re all big fans of cinema and big fans of VOX and big believers in the vision of Majid Al Futtaim.”