Total cinema revenue in Saudi Arabia is expected to reach $1.5 billion by 2030, according to new research by PwC Middle East.
The forecast is based on a projected 2030 population of 39.5 million, and 6.6 screens per 100,000 people.
“By 2030, Saudi Arabia is expected to host 2,600 cinema screens that will entertain its growing population,” said Dr Martin Berlin, Middle East partner and global deals real estate leader at PwC Middle East, at the MENA Cinema Forum.
Based on global and regional benchmarks, PwC said it expects Saudi Arabia to accommodate between 300 and 370 cinema locations.
“Based on pricing of $11–$14 for lower end formats, and $40 for luxury formats, Saudi Arabia could generate $950 million in box office revenues by 2030. As other revenue streams typically account for 35 percent of overall revenues, this brings the total to $1.5 billion,” he 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 forum that took place at the Grand Hyatt hotel in Dubai.
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 .
“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,” said Leila Masinaei, managing partner of Great Minds Events, organiser of the MENA Cinema Forum.
“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 AED2 billion in adding 600 cinema screens in Saudi Arabia.
Cameron Mitchell, CEO of Majid Al Futtaim Cinemas, said: “We will invest $100 million in a year to open 100 cinema screens – part of the AED2 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.
Novo Cinemas, which operates 124 screens in 10 locations with 19,000 seats, will also add more cinemas in the next few years.
“Although I do not have a budget in my mind, but will could potentially operate 1,000 cinema screens five years down the line, depending on how the market evolves,” said Debbie Standord-Kristiansen, CEO of Novo Cinemas.
“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, PwC Middle East said, adding that in the MENA region, box office revenue exceeded $500 million last year, up 3 percent from 2016.For all the latest retail news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
Subscribe to Arabian Business' newsletter to receive the latest breaking news and business stories in Dubai,the UAE and the GCC straight to your inbox.