Saudi Arabia Moviegoing: Studio Distrib & Exhibition Bosses Debate Ticket Prices, Taxes & More At CinemaCon

April 23, 2018

There was a great excitement about the opening up cinema-going in Saudi Arabia today coming out of the CinemaCon panel “The New Frontier: Saudi Arabia Opens Doors to Movie Theaters After 35 Years” today, however, as 20th Century Fox International Distribution president Andrew Cripps warned, “The decisions we make today will have a lasting impact.”

The session moderated by NATO CEO John Fithian and including AMC CEO & President Adam Aron, Universal International Distribution President Duncan Clark, Majid Al Futtaim Ventures CEO Ahmed Ismail, and Cripps discussed such subjects as taxes, ticket prices, and censorship.

AMC threw the doors open on their first venue on April 18 and the chain completed this feat as they converted an old symphony hall in the matter of 10 weeks opening with Disney/Marvel’s Black Panther. Tickets went for $20M – a price which Cripps believes is to high. “You don’t want to outprice the market”. That price was bolstered by a 25% entertainment tax and a VAT, surcharges Cripps questioned where such monies would be designated too.

“Honestly it’s too low,” said Aron who believes that once he installs actual movie theater seats into his Riyadh venue that the price could hike to $30 or $35. “There’s one open theater and in a few days there will be two,” said the AMC chief, pointing out that tickets for a Black Panther showtime sold “out in 47 seconds” Essentially the local entertainment tax is this high due to the pent-up demand by the audience,and it’s expected to moderate going forward. Cripps snarked that if movie tickets go for $35, then Saudi Arabia will reach “$1 billion a year pretty quickly”. He made a bet with Aron that ticket prices will be significantly lower. Aron answered, “I included 30% tax in my rental split”.

“This is going to be Hamilton for a year,” added Fithian about the state of sold-out movie tickets in Riyadh.

Aron also praised how audiences were integrated by gender at the cinema’s opening gala on April 18 and he believed that progression will continue. In regards to censorship, there’s a 6 tier rating system and the panel believed that Saudi Arabia will be more conservative at first toward movies and become liberalize as it goes on. Aron observed that only 47 seconds was cut out of Black Panther, “that’s not butchering”. Cripps has Ferdinand going through the censorship board in Saudi Arabia now, a title which is primed to be 20th Century Fox’s first release there. Warner Bros. first title there will be Rampage.

What types of movies will work there? Cripps cited family and animated pics like Ferdinand, “films with good wholesome values” and tentpole content. Clark agreed, calling out Jurassic World. But Cripps said, “R-rated content will struggle…and with censorship we’ll going to learn as we go along.”

Earlier this month, AMC and the Public Investment Fund of Saudi Arabia announced that its subsidiary the Development and Investment Entertainment Company has signed an agreement with AMC Entertainment Holdings, Inc. to operate AMC Cinemas in the Kingdom. AMC already opened its first venue in Riyadh on April 18. The Leawood, Kansas theater circuit plans to open 30-40 cinemas in approximately 15 cities in Saudi Arabia over the next five years, and a total of 50-100 cinemas in approximately 25 Saudi Arabian cities by the year 2030.

There’s a lot of money to be made in Saudi Arabia. Not only has it been reported that the box office could yield to a level of $1 billion in a given year, Ismail pointed out that Saudi population spent $30 billion on travel and leisure outside the country; money that’s leaving the country that should stay in.

“It was emotional night,” said Aron about the opening day of his theater which will expand from being one screen and 624 seats to four screens and over 1,000 seats, “It reminds us about our industry’s place in the sun.”

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