Resurgent Box Offices Eye Gulf States’ Market and Money

New Generation Cinemas

Cinema owners seek innovation and renewal as global exhibition begins to re-claim its pre-pandemic prominence. New ideas on the cinema experience, and the capital needed to pursue them, are finding fertile soil on desert sand.    

The largest cinema chain in the world knew a great deal when it saw one.  In 2018, AMC Cinemas premiered the Marvel movie, Black Panther to crowds of men and women lined up around the block, and blocking traffic, for a cinema ticket.  This was entirely expected by many film-goers around the world.  Black Panther was a breakout Hollywood blockbuster, after all.  But in the capital city of Riyadh, this was something entirely new.  It was unthinkable just a few years earlier.  Cinemas had been banned for nearly 40 years in Saudi Arabia.  Before 2018, men and women enjoying a film together, in public, would have been illegal. 

For much of the world, the Covid-19 pandemic collapsed box office attendance and drove cinephiles indoors and into the hands of streaming platforms. 

Unlike the rest of the world, the Kingdom of Saudi Arabia took an opportunity to re-invent the concept of the cinema for a growing, value-conscious consumer audience.  Cramped seating and over-priced concessions are not an expectation for a youthful Saudi audience accustomed to getting what they pay for.  Going to the movies with friends and family is a life experience. 

That experience needs to be awesome!

For inspiration, and expertise, the Saudis have been looking to their Gulf neighbours, and Dubai in particular, for what that means. 

Lush, “lazy boy” recliners had become the norm in Dubai’s most popular cinemas with table service for restaurant-quality food and beverages.  There is no feeling of being rushed, only the anticipation of a great movie experience. 

Cinema owners around the world have wanted to re-claim that feeling for their own customers, even before the global pandemic pulled the financial rug out from under them.  To achieve that, things have to change.  Change costs money.

For cinema owners, no other market in the world offers both an opportunity to innovate and the money to do it.

Economic Strategy

The plan is called, Vision 2030. 

As an economic development plan, it includes the usual suspects:  public works, liberalised real estate development and tourism.  But what makes this particular economic development plan special is a focus on entertainment.  More precisely, the Kingdom of Saudi Arabia is betting big on the Media & Entertainment industry.

saudi crown prince mohammed bin salman mbs opening cinemas media c-suite
Saudi Crown Prince Mohammed bin Salman, the architect of Vision 2030 and who’s decree opened cinemas to the Saudi people in 2018 after a 35 year ban. (Image credit: Press Office).

This may be for many reasons.  No other global industry has such an immediate capacity to shape public opinion.  On an international level, changing public opinion about Saudi Arabia would be hugely beneficial for securing trade with new commercial partners in other countries that might have a particular view of who Saudis are.

But the local element is equally as important to a society that has very recently been given more freedom than any previous generation.  The Kingdom has a growing population of youth with a view from the internet on how the rest of the world lives.  But the Kingdom’s economy is missing two key elements that impact those demographics in a profound way:  employment opportunities and a means for peacefully filling ever more leisure time.

While American and European cinema chains seek ways of filling more seats with fewer employees, the Saudis are in pursuit of something different.  More screens, fewer but more comfortable seats and enough trained staff to ensure movie-goers feel like guests. 

According to a PwC report on opportunities for the booming exhibition sector in Saudia Arabia, “the Kingdom’s cinema box office market could be USD 950 million in 2030.  With non-admission (F&B / concessions and advertising) typically comprising 35% of overall revenue, [the] cinema industry has the potential to generate total revenue of USD 1.5 billion in 2030 and develop into a lucrative revenue stream for industry players and the government.”

To many analysts in the Gulf, this is significantly under estimated.  That is primarily based on the fact that few things in the Arab world are unconnected.

Few Saudi’s need much enticement to go the cinema.  That experience is also exposure to the product of films and an enticement toward creativity as a profession.  Building next generation cinema chains is one part of a larger picture. The Kingdom is also building content production infrastructure to fill those local cinemas with locally-produced movies that can play internationally. The net effect generates next-generation employment opportunities for the Kingdom’s 35.9 million people with a regional content market spanning over 400 million people with common language and cultural references 

Such results require something few other markets have:  money and the will to spend it.  For the monarchies of the Gulf States, both of these resources are in plentiful supply.

Money Talks

The exhibition business was already well established across most of the Gulf states before 2018.  Increasingly affluent local Arab populations and teeming expats generated growing demand for high quality films and television from around the world.  Local cinemas operators quickly adapted to the increasingly luxurious environments of Dubai’s bell-whether shopping malls. 

Cinépolis Gulf
Cinépolis Gulf, a Joint Venture between the worlds third largest cinema chain (and largest in Latin America) and the Al Thayer Group in Dubai. Cinépolis Gulf further partnered with Al Hukair in Saudi Arabia with plans for dozens of theatres and hundreds of screens. (Image: courtesy of Al Thayer Group).

To meet demand, the production and consumption of locally produced commercial entertainment, particularly television and film, was being pursued by both public and private initiative.  Middle East Broadcast Center, known as the MBC Group, grew to become the largest broadcaster and producer of high quality Arabic-language content in the region with its base in Dubai.  MBC Group is now majority controlled, and headquartered, in Saudi Arabia. 

Qatari-owned Gulf Film, the largest distributor in the region with 51% market share, distributes more than 120 titles each year.  Most of these are Hollywood movies, with a mix of Bollywood.  Locally produced films intended for both regional and international distribution have been gaining a significant foothold.  Gulf Film’s subsidiary, Novo Cinemas presently operates 21 theatres and 184 screens across Saudi Arabia, one of dozens of exhibitors (and growing).

Abu Dhabi’s sovereign wealth funds and State-owned investment companies capitalised local content production through its own media hub, Two-Four54.  With growing capital commitments, major Hollywood blockbusters began being filmed in Abu Dhabi and Dubai.  Turkish soap operas and Bollywood dramas are now being merged with a new generation of Arab film-makers who had grown up with their parents’ stories of Egyptian movie stars. 

But with all the development across the region, the Kingdom of Saudi Arabia plays a primary role in the direction and outlook exercised across the Arab world.  The absence of exhibition inside Saudi Arabia was palpable.  When that changed, everything accelerated.

A Global View

Since 2018, Saudi Arabia’s Public Investment Fund has invested an estimated US$40 billion into a wide portfolio of Hollywood studios, video games publishers, and media tech companies including Microsoft, Meta Platforms, Amazon and Alphabet. 

This figure pales in comparison to investment into local content production infrastructure inside Saudi Arabia and the wider region.  Indirectly, money from the Public Investment Fund is capitalising an increasingly sophisticated network of international content production and media distribution capacity. 


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For instance, it was reported last year that the MBC Group had invested US$250 million for a 30% stake in the European media conglomerate, Antenna.  In press releases from Antenna, the capital injection is expected to enlarge and improve its production capacity with new studio infrastructure in Greece. 

As the Media C-Suite reported earlier, “By shifting some production of its own content to an EU country, [MBC Group] also qualifies for expansion of its streaming services to the EU market, which has strict quotas on local EU production of streaming libraries viewed within the EU’s content market.”

How does this effect exhibition?  Greater, more global collaboration with international cinema chains is likely to be the next big move. 

The experience for AMC Cinemas may be mixed.  In February, AMC’s stake in its Saudi theatres was bought out for a reported US$30 million by a Saudi Entertainment Ventures (owned by the Public Investment Fund), just as competition for an even better audience experience heats up.  This is much needed capital for AMC’s theatres in the U.S. and Europe as cinema attendance re-bounds and investment into the cinema experience is needed to maintain that growth.

But AMC is experiencing a rather vulnerable moment, as are many large exhibitors.  According to data from Refinitiv, AMC is holding approximately US$5.17 billion in long-term debt with a market capitalisation as of close yesterday of US$2.18 billion.  According to a Reuters report in March, Amazon was exploring a bid to acquire AMC outright.  But little chatter has followed that report.

Muvi Cinemas on the Rise
Muvi Cinemas, the first Saudi founded exhibitor on track to dominate the Saudi market (above) and expanding. Muvi represents an emerging generation of exhibition and media execs making a mark on a global industry. (Images: courtesy of Muvi).

Large cinema chains in the US may be a ripe target after a 40 year ban on Hollywood studios owning cinemas expired last year.  With a proven strategy for acquiring interests indirectly, and the Public Investment Fund’s significant capital injections into Hollywood studios, that outcome should come as no surprise. 

The UK’s Cineworld Group PLC’s U.S. bankruptcy filing last September may widen that target list into the UK and Europe.  Cineworld is expected to exit U.S. bankruptcy in the coming weeks. 

The UK’s Empire Cinemas entered administration on Friday (7 July).

Less surprising, perhaps, would be the increasingly well managed and highly capitalised exhibitors from the Gulf States eying expansion into markets further afield.  Saudi’s Muvi Cinemas, or regional operators such as Reel Cinemas, Vox or Roxy out of Dubai and Novo Cinemas out of Qatar are highly capable and well-capitalised. This may be particularly opportune given the precarious state of many regional and local cinema operators in the U.S., Europe and elsewhere.  Such expansion may come in the form of strategic partnerships or outright acquisition. 

Whether the Gulf cinema experience is exported or the cost-efficiency tactics of U.S. and European operators are imported is anyone’s guess.

Either way, such expansion would open channels of distribution for Arab-led productions to find receptive audiences in the Americas and Europe, where many might have said none exist. 

The same was recently said of cinemas in Saudi Arabia. 


Go deeper into the economic strategy discussed in this article.

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Saudi’s New Investment Strategy in Media & Entertainment

Saudi Arabia’s investment activities point to a determined strategy to make use of the Media & Entertainment industry’s massive soft power.


1 Comment

  1. I have sat in very comfortable cinemas in the US. The luxury end of the spectrum is very nice, but very expensive. $50 a ticket is out of reach for most Americans, who are more than happy to go the movies now as they are.

    But, cinema chains are in trouble, and that is when investors can swoop in. I do see that happening. It might be Disney or Netflix rather than Saudi Aramco.

    What I would find interesting is if a big investor from Saudi or Dubai or Qatar came and bought out one of the prestige theatres in LA. Just one property, but something that makes a statement. That would be a message that they are involved now. Until then, I think they are just investors and Media is just a good play at the moment.

    Having said that, Saudi sure is making an effort to be a player. Every year their presence at Cannes is bigger and bigger.

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