For movie buffs from Riyadh to Dammam, Saudi Arabia’s silver screen has well and truly lost its shine. Since the unceremonious closure of the kingdom’s cinemas back in the 1970s, few outlets have offered a glimpse into the fantastical world of cinematography, forcing movie fans down the path of illegal downloading or international travel to clap eyes on the latest releases. Whether Bollywood blockbusters or Hollywood classics, a world of pictures in motion has been lost in a nation where tradition dies hard. But, as Saudis rev up their engines for a road trip in pursuit of a much-needed film fix, one company is offering a third solution from the comfort of an armchair.
At Intigral, a buzz is in the air. Child of Saudi telecoms giant STC, the Middle Eastern digital company is enabling customers to watch the latest releases from home as they light up movie screens from Dubai to Doha. “It’s super cool having same day release as the cinemas in your lounge,” enthuses Intigral’s Australian CEO, Ben Kinealy.
At roughly 1.5 times the cost of a cinema ticket and with unlimited viewing during a 48 hour period, the attraction of Intigral’s latest service is clear, as is its potential audience. “The cinemas here in Dubai are packed with Saudis…You have a huge audience that wants to see this stuff, but can’t in their own territory,” explains Kinealy, who assumed his role late last year. “We’re going to make that happen,” he asserts.
To an extent, it’s “happening” already, but only for the privileged few. At a cost of $50,000 for the box and $2,000 to $3,000 per view according to Intigral’s CEO, movies have been available to royalty and the upper echelons of Saudi society for some time. Trials have been conducted elsewhere in the world too, but not without difficulty; finding a solution that works for all parties—cinemas, studios, distributors—is tough. “Apple and Netflix have tried to do a little bit…but this is the first real customer facing service,” claims Intigral’s front man—a telecoms veteran of 22 years who previously worked at Australian telecoms powerhouse Telstra.
The company, which was set up in 2009 to do what traditional telecoms companies couldn’t, already manages interactive TV, Internet Protocol television (IPTV) and over-the-top (OTT) content capabilities and services for STC. Through the InVision set-top box Intigral delivers live and catch-up television, as well as video on demand (VOD) and now the Premium Video on Demand (PVOD), to customers. Intigral has developed other cutting edge products too, including Dawri Plus, a first multi-screen, interactive platform that enables football fans to live stream and replay Saudi Premier League matches.
Still, the introduction of “now showing” blockbusters in November 2013 was a bold move. Pointing to the challenges of introducing new release movies to the Saudi market, Rawan Awwad, Analyst at Arab Advisors Group and author of its recent report, IPTV in the Arab World 2014, explains, “These [challenges] include sensitive social norms in the Kingdom, which may consider some western content to be intimidating to their traditions and beliefs.” Awwad continues, “From a commercial perspective, the presence of stores that sell illegal pirated copies of movies is another major challenge.”
Despite the obstacles, Intigral now has a number of studios onboard—Gulf Films, Front Row, Italia, Phoenicia, Falcon, and M.A. Films—with ink drying on another deal signed with a studio in Hollywood. Nevertheless, Kinealy has been treading carefully. “The service was softly released…Everyone is a little nervous about doing this kind of stuff and you don’t want the distributors having a revolt from their producers,” explains the CEO, adding that people are scared of angering movie theaters too.
The reality is, however, that the industry continues to lose money where Saudi Arabia is concerned, via theft, audience exodus, or simply lack of awareness. “You lose that audience until a movie hits MBC or OSN and every time a pirate movie is downloaded and watched the whole film ecosystem loses money,” explains Kinealy. “But what happens if you told people about these films? Made it easy for them to see them? You would be saving and making money,” he remarks.
There is a compelling argument that there is money to be made, but something remains rather less obvious: how viewing newly released films from home can be acceptable in a land that prohibits cinema. Kinealy points out that whether conservative or liberal, society loves a good story, but the fact remains that cinema releases still languish on the Kingdom’s blacklist. This is where the advantages of having Saudi Arabia’s leading telecoms provider as the main stakeholder, not to mention prime customer, come into play.
“They are the state,” asserts Intigral’s CEO. But there are other powerful forces at play. In a country home to the highest number of Facebook, YouTube and Twitter users per capita in the world, the Saudi authorities cannot ignore—or stop—the potent media ball that that is already rolling.
According to UK-based customer acquisition company, MVF, Saudi Arabia’s internet population stands at 9.8 million, with a market potential (GDP users/million) of $232,672 billion, while data from the World Bank estimates internet penetration in the Kingdom at 54% up from just 6.4% a decade earlier.
In a country where 60% of the population is below the age of 30, demographics are playing their part too. “The high proportion of youth within the Saudi population is definitely a major driver of video-based services,” asserts Rawan Awwad. And the demand for video services is rising. Arab Advisors Group recently concluded a survey with internet users in Saudi Arabia, finding that around 84% are video streaming users, of which 27% watch TV channels through online streaming.
While Saudi Arabia may be ripe for the introduction of further online developments, the long term success of Intigral’s cinematic experience remains to be seen. That isn’t stopping Kinealy from pushing ahead though, as he aims to disseminate movies to the home-viewing public across the Middle East. Taking his latest product to markets where cinemas already exist wouldn’t make sense, but the ambitious CEO is aiming to get as close as possible. “Maybe we can introduce films a month later…One of the problems with this market is that there are no video stores and few DVD sales, so we can challenge that.”
Not a man to rest on his laurels, Kinealy is on the verge of launching the company’s new-look, new-feel InVision too. The revamped service which is due to be launched mid-year will significantly enhance the existing service, increasing channels, VOD and video offerings. UK, Chinese and Swedish companies have been brought onboard to help create the product that has cost multi-millions of dollars to develop, while strategy and content-related activities are managed from Intigral’s Dubai HQ as the company seeks regional growth beyond the borders of Saudi Arabia, Kuwait and Bahrain.
“We’re going to re-do the whole product; imagine Netflix and Sky together, Or Apple TV and TiVo together,” remarks Kinealy. So far, InVision has been delivering over a private network. Now Intigral plans to extend to the open network, offering access via tablet, phone or smart TV.
Doing their part to ease the process, Saudi telecom operators are investing heavily in fiber infrastructure, in turn driving Triple Play adoption. According to Arab Advisors Group, by September 2013, STC had increased its IPTV subscription base by 76% over the corresponding period in 2012.
Still, neither STC nor Initgral are alone. Across the GCC, Etisalat, du, Mobily and Ooredoo all offer “On Demand” or movies’ library services while OSN also offers video on demand through satellite TV. “The IPTV market is flourishing in the GCC countries, especially the UAE, Qatar and Saudi Arabia” explains Awwad, adding that Ooredoo’s triple play accounts jumped from 31,873 by year end 2010 to 88,398 by September 2013. According to the Arab Advisors Group, there are currently 14 providers in nine countries in the Arab World offering IPTV services, with ongoing or planned projects in Algeria, Iraq, Kuwait, Libya, Mauritania and Tunisia.
Intigral’s CEO is well aware of the competition he faces, but appears less than concerned. “Mobily have a full IPTV player from Etisalat. They’ve got Siemens putting together a package for them—but it’s not as good!” he smiles.
The proof, of course, is in the pudding where Intigral’s new-look Invision is concerned, but as long as cinema doors remain under lock and key, the company’s move to adorn Saudi TVs with a silver screen, could well pave the way for cinematic success. Nothing can quite replace the smell of popcorn and hum of hushed voices as audiences take their movie theater seats. Still, the option to switch Dubai-bound car seat for living room armchair, is a step in the right direction as movie-lovers across the Kingdom wait patiently for some ‘lights, camera, action.’