HOW IS SAUDI ARABIA MOVIE THEATER INDUSTRY POSITIONED?
The Saudi Kingdom after a 35 year hiatus, brought back film exhibition in the country in line with its vision to make Saudi Arabia an entertainment hub in the middle east. SEVEN, a subsidiary of the country’s sovereign wealth fund PIF, entered into a joint venture with AMC Theaters, world’s largest theater chain to open the kingdom’s first theater in King Abdullah Financial District in April 2018.
The focus on expanding the entertainment and leisure industry is leading to increased investment opportunities for both foreign and domestic companies. In the entertainment sector, 500 new companies have been established in the past 12 months. This trend is likely to continue with multiple tourism related companies are expected to enter the market as demand further increases.
With the aim of securing a 70/30 ratio of non-religious to religious foreign visitors by 2030, the kingdom has developed a tourism plan which is squarely focused on leisure and relaxation. Substantial investment has been earmarked for expanding and diversifying offers in international events, luxury destinations, heritage sites, and eco-tourism, and government agencies have announced major agreements with travel agencies, real estate, and retail companies as well as major hotel groups.
While most of the new Saudi Arabia Movie THeater Market are likely to screen predominantly international productions, the growth in the sector is expected to drive the trend for local filmmaking. Moreover, KSA has increased its focus on promoting domestic filmmaking, through film festivals such as the red sea and Saudi Film Festival. Furthermore, the government has been taking a wide range of initiatives including offering support and training to local filmmakers, improving relevant infrastructure, developing a regulatory framework, and creating a national fund for filmmakers.
Saudi Arabia Movie THeater Market Segmentation
By Revenue Source (Ticket Sales, Food and Beverage, and Advertisements and Sponsorships):
Ticket sales constitute the majority share of total movie theater revenues. As the cinema industry is still nascent, this segment will continue to dominate. As more and more theaters open, and more people visit them, concessions on tickets will be more common. Nearly ~% of the movie theaters operating in Saudi Arabia had ticket admission revenues more than ~%, compared to matured companies such as PVR and AMC, which have between ~% average revenue share of ticket admissions.
F&B revenues are still growing and are not at par with countries with full matured theater industry, where their share of revenue dominates movie theater revenue. On an average, Saudi spends between ~ SAR on F&B.
Advertisement and sponsorship revenues are related to pricing of advertisement exhibition and the duration of the exhibition. Longer the duration of the advertisement, higher will be the price charged. Moreover, advertisements can be digital, in movie and traditional in terms of posters and banners as well.
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Figure: Saudi Arabia Movie Theater Market by Ticket Sales, F&B, and Advertisements in terms of Revenue in SAR Million, 2021
Saudi Arabia Movie THeater Market Competition Scenario
The market is currently dominated by three major movie theater operators namely AMC, VOX, and MUVI Cinemas. With a single theater in operation in 2018, more than 59 theaters came into operation by then end of 2021.
Future Outlook for Saudi Arabia Movie Theater Industry 2021-2026F
The movie theater industry in Saudi Arabia is expected to grow at ~% CAGR from 2021 to 2026F. With licenses granted to more than ~ international movie theater operators as of 2021, and more operators slated to enter the market, the market stage can be expected to enter late growth during the forecast period. As more players enter the market, the competition is also estimated to become less concentrated. The high spending appetite of Saudi and Non-Saudi nationals will also allow theater operators to offer luxury movie viewing and value-added services, thereby increasing the share of F&B revenues.
Key Factors Considered in the Report
- Saudi Arabia Theatre Market Introduction
- Market Ecosystem
- Value chain Analysis
- Major Challenges in Saudi Arabia Theatre Market.
- Detailed Analysis of Theatre Market in Saudi (Market Size, 2021; Market Segmentation; Market Shares; Competition Overview; Future Market Size, 2026F)
- Customer Preference for Cinema Viewing Experience in Saudi Arabia
- Investment Model to Setup Movie Theater in Saudi Arabia
- Case Study on Successful Movie Theater Ventures
- Overview of New Cinema Regulatory Regime
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