Saudi Cinemas Open

AMC running first Riyadh theater

While admissions to US theaters remain stagnant, Saudi Arabia is preparing for a boom in cinema visits over the coming year.

Going to the movies is not as popular as it used to be in the late 20th century.

Theater admissions skyrocketed in the 80s and 90s thanks to flashy big-budget blockbusters such as Die Hard and Indiana Jones.

In the US and Canada alone, around 1.44 billion tickets were sold in 1999, 32% more than the 1.09 billion admissions registered in 1987.

But the internet boom of the 2000s has led to the disruption of traditional methods of consuming visual media.

As a result, admissions have remained stagnant and even decreased steadily. In 2017, US and Canadian theaters sold 1.23 billion tickets in 2017.

Last week, however, Saudi Arabia opened its first movie theater in nearly 35 years, following a complete ban in the 1980s.

The kingdom had some cinemas in the 1970s, but clerics shut them down during a wave of religious puritanism.

Today the political situation is quite different.

With 32 million citizens, approximately 70% of whom are under the age of 30, Saudi Arabia is now set to become the largest market among the Gulf Cooperation Council countries.

Saudis are already known for taking short trips to neighboring Bahrain or the United Arab Emirates to enjoy the latest Hollywood productions.

The first cinema opened in Riyadh will be operated by AMC Entertainment, as part of the company’s plan to have 40 movie theaters in 15 Saudi cities over the coming five years.

In all, the kingdom aims to set up nearly 350 cinemas by the year 2030.

Attracted by the lucrative potential of this market and the nation’s special interest in developing it, other big industry players such as IMAX, Disney, and Universal have flocked to Saudi Arabia to explore possible business opportunities.

AMC, however, seems more ambitious, expecting to open as much as 100 theaters by 2030, according to an agreement signed with Saudi Arabia’s sovereign wealth fund the Public Investment Fund (PIF).

PIF estimates that this brand new movie theater industry could eventually generate USD1 billion in revenues in the kingdom and, hence regards it as a central pillar for meeting the Vision 2030 objective of increasing household spending on entertainment to represent 6% of the economy.

Vision 2030 is designed to modernize Saudi society, while reducing the kingdom’s dependence on oil by diversifying the economy.

It is worth noting that the box office hit Black Panther is the first movie being officially screened in the country for more than 35 years.

Black Panther tells the story of the prince of the imaginary African kingdom of Wakanda who decides to bring his country out of isolation and share its unique resources of an extremely valuable mineral called ‘vibranium’ with the rest of the planet.

To some extent, the movie resembles the project Saudi Vision 2030.

The country’s vast oil reserves have been the bedrock of the economy, supporting its development even when the global economy faltered.

But now, under the leadership spearheaded by Crown Prince Mohammed Bin Salman, Saudi Arabia is moving toward a more open economy that will play an important role in the international community.

Issuing cinema licenses could bring Saudi Arabia another step closer to accomplishing Vision 2030 in a grand Hollywood-esque finale, but the complex pressures of regional instability and internal political changes risk making it a flop.

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