As the crown prince charms Hollywood, the reality sets in: Global studios and talent are jockeying for position in a politically fraught movie market that could grow to $1 billion a year.
11 April 2018 |r | The Hollywood Reporte
“Saudi Crown Prince Mohammad Bin Salman — alongside an entourage big enough to book out the entire Beverly Hills Four Seasons — swooped into Hollywood last week as part of the royal’s whirlwind U.S. tour.
The schedule included a star-studded soiree on April 2 thrown by Rupert Murdoch (and attended by studio bosses Bob Iger, Jeff Shell, Kevin Tsujihara and Stacey Snider), and the 32-year-old, commonly known as MBS, also swung by Endeavor (the $230 billion sovereign wealth fund he controls is buying a $400 million stake).
But although major announcements may have been limited to Cirque du Soleil signing an agreement for its debut performance in Saudi Arabia, the prince’s Hollywood visit coincided with the historic news that AMC Theatres had won his country’s first cinema license and would be opening its first site on April 18, breaking a 35-year ban on public screens that was only lifted in December.
Saudi’s cultural reforms are set to have a significant impact to a cinema-starved country of 32.3 million (70 percent under the age of 30), offering significant industry opportunities even as the country faces criticism of its human rights practices. Here’s The Hollywood Reporter’s take on the opening up of what could be the last great untapped market.
1. HOLLYWOOD WILL FEATURE PROMINENTLY
The fact that Black Panther is set to historically break Saudi Arabia’s 35-year cinema ban (immediately followed by Avengers: Infinity War) is a sure sign that Hollywood will play a significant part in Saudi Arabia’s film future. With the country likely to be underscreened for first few years as exhibitors race to satisfy pent-up demand, one regional distributor predicts that they will likely “give space only to tentpole tites.” Analysts have suggested that Saudi’s untapped market could reach $1 billion in ticket sales (making it the 10th biggest globally), and, much like other regional box offices, U.S. studio fare is likely to dominate.
2. BUT BOLLYWOOD COULD PLAY A ROLE
It’s not only Hollywood output expected to reap the rewards. An estimated 4.1 million Indians — 13 percent of the population — live in Saudi Arabia, making them the biggest expatriate group by some margin. In the neighboring United Arab Emirates, where Indians also dominate (27 percent), Bollywood has become a growing force.
Last year, Indian films sat atop the UAE box office for eight weeks, with fantasy actioner Baahubali 2: The Conclusion fending off Guardians of the Galaxy Vol. 2(and in its second week). “There’s also a sizable population of expats [in Saudi Arabia] from other South Asian countries such as Bangladesh, Sri Lanka and Pakistan, who are a target audience,” says Deloitte India partner Jehil Thakkar, who says there’s “tremendous potential” for Bollywood. “Moreover, the country also has residents from other countries, such as Egypt, where Bollywood has had a strong following.”
3. IT SHOULD BRING SOME (MUCH-NEEDED) GOOD NEWS FOR WANDA
China’s once-mighty Dalian Wanda Group — which recently received a multibillion-dollar bailout out by former tech rivals Tencent and Alibaba — could enjoy a prolonged period in the Saudi sun thanks to its AMC theater chain. The exhibitor was the first to announce it was looking at opportunities in the kingdom, and such proactive behavior has paid off: It’s now set to open the country’s first cinema on April 18, and CEO Adam Aron has said that with “up to 100” other sites planned, he hopes AMC will command “approximately a 50 percent” share of the market. “Where else are you going to find a movie market that literally doesn’t exist today that could be $1 billion in size in five years or so?” said Aron. “I think we’re going to sell a lot of tickets.”
4. PLENTY OF INTERNATIONAL CHAINS ARE GETTING INVOLVED
Even if AMC achieves it goal of snaring half the $1 billion Saudi cinema market, there’s still plenty left to go around. THR has learned that regional chain Vox, which operates in the UAE, Lebanon, Egypt and Oman, will follow hot on the heels of the U.S. giant, opening its first outpost at the end of April.
Although Vox wouldn’t confirm, its holding company Majid Al Futtaim already has more than $3.7 billion invested in retail and leisure projects in the kingdom and has said it will have an “active role” in its cinema revolution. London-based European exhibitor Vue International has also said it plans to build “up to 30” multiplexes, while Gulf group Cinescape has it sights on 27 screens across three locations by the end of 2018. Luxury chain iPic is also prepping its Saudi arrival, tapping into the region’s demand for higher-class offerings.
5. HOMEGROWN FILMMAKERS MAY GET AN INDUSTRY TO CALL THEIR OWN
While Saudi’s nascent film industry should be a major beneficiary of the country’s cultural reforms, filmmakers are remaining cautious. Mahmoud Sabbagh, whose comedy-drama Barakah Meets Barakah debuted in Berlin in 2016, says announcements regarding incoming cinemas have so far “neglected” local productions, and hopes the country will follow France’s lead in the ’90s by introducing “either a quota for local films, or a tax payed by all foreign films” that goes toward homegrown productions. But the recent setting up of the Saudi Film Council, which includes a fund for Saudi filmmakers, is a hugely positive sign, as is the appointment of acclaimed local filmmaker Haifaa Al-Mansour (Wadjda, Mary Shelley) to the board of directors of the General Culture Authority.
5. COULD DUBAI LOSE ITS REGIONAL EDGE?
Thanks to its abundance of modern multiplexes, the UAE city of Dubai has become a major destination for movie-starved Saudis (one politician has claimed that hundreds of thousands flew over each year specifically to watch films).
Such tourism is lilkely to — eventually — dry up as Saudis head to screens closer to home, but there could also be an impact on Dubai’s position as the regional industry hub thanks to its well-established film festival. “If Saudi Arabia launched a film festival or created a fund, it will of course affect Dubai,” says Alaa Karkouti of the Arab Cinema Center.
But he points to Dubai’s hugely well-respected team and strong industry focus, plus uncertain issues regarding censorship in Saudi Arabia. “Also, the market in the Arab world can have a space for more festivals,” he says.