Total cinema revenue in Saudi Arabia is expected to reach $1.5 billion (Dh5.5 billion) in 2030, according to a research by PwC Middle East, a global advisory firm.
“By 2030, Saudi Arabia is expected to host 2,600 cinema screens that will entertain its growing population,” Dr. Martin Berlin, Middle East Partner and Global Deals Real Estate Leader at PwC Middle East, told delegates at the two-day MENA Cinema Forum that concluded on Monday.
“Based on global and regional benchmarks, we expect the KSA to accommodate between 300 and 370 cinema locations.”
Dr. Berlin based his projection on a projected 2030 population of 39.5 million, and 6.6 screens per 100,000 people.
“Based on pricing of $11 – $14 for lower end formats, and $40 for luxury formats, the KSA could generate $950 million in box office revenues by 2030. As other revenue streams typically account for ~35% of overall revenues, this brings the total to $1.5 billion,” Dr Martin Berlin added.
The Gulf region will see the development of more than 1,000 new cinema screens in the next three to five years, as developers and cinema operators announced massive investment plan at the first-ever MENA Cinema Forum that took off at the Grand Hyatt hotel in Dubai on Sunday, October 28, 2018.
The region has 1,300 cinema screens in operation. The announcement of 1,000 cinema screens will see more than 2,300 cinema screens in operations in the next five years, with the majority of the new screens to open in Saudi Arabia – which has opened the country for cinema theatres.
“The cinema industry in the GCC is coming of age with Saudi Arabia – the largest Arab economy – opening the market means massive opportunity for all industry stakeholders,” Leila Masinaei, Managing Partner of Great Minds Events, organiser of the MENA Cinema Forum, said.
“Major cinema developers and operators have announced that they will add more than 1,000 new cinema screens in the next five years that will raise the number of screens from 1,300 to 2,300 by 2023.
“Saudi Arabia’s Development Investment Entertainment Company (DIEC) which is armed with a budget of SR10 billion for the development and expansion of the cinema screens across the Kingdom, is acting as a catalyst in the development of the cinema sector that is projected to directly contribute SR1 billion to the Saudi Arabia’s gross domestic product (GDP).”
Majid Al Futtaim, which operates 355 cinema screens, is investing Dh2 billion in adding 600 cinema screens in Saudi Arabia.
Cameron Mitchell, Chief Executive Officer of Majid Al Futtaim Cinemas, said, “We will invest $100 million in a year to open 100 cinema screens – part of the Dh2 billion plan to open 600 cinema screens in Saudi Arabia in the next three to five years.
“Overall, we will operate around 1,200 cinema screens across the region in five years’ time – that’s how fast we are going to expand. With Saudi market opening, we see a lot of opportunities in the region’s cinema and entertainment industry.”
He said the company is hiring a large number of Saudi nationals to manage the growth in the Kingdom.
“We have opened our first cinema complex in Saudi Arabia in May this year, right after the government announced the opening of the cinema industry for public. We were closely working with the Saudi Arabian Government and as a result were the first operator to open the first cinema screen in the Kingdom,” he said.
“We are employing a large local talent pool to manage our entertainment assets in the Kingdom. We have achieved 98% Saudisation in our operations already.”
Novo Cinemas, which operates 124 screens in 10 locations with 19,000 seats, will add more cinemas in the next few years.
“Although I do not have a budget in my mind, we could potentially operate 1,000 cinema screens five years down the line, depending on how the market evolves,” Debbie Stanford-Kristiansen, CEO of Novo Cinemas, told the media on the sidelines of the MENA Cinema Forum.
“Saudi Arabia is obviously the market that will drive the growth and we are talking to our partners to open as many screens as the market demands.”
Globally, the number of cinema screens has crossed 150,000 and in the MENA region, the number of cinema screens is expected to jump 38.4% as 1,300 new cinema screens to be set up, mainly in Saudi Arabia, according to a research by PwC Middle East.
In the MENA region, the 2017 box office revenue exceeded $500 million (Dh1.83 billion). This is about 1.25% of the global box office revenue of $39.92 billion recorded last year, up 3% from 2016. More than $3.54 billion investment in cinema screens across the Gulf is expected to boost the region’s cinema industry.