Widespread reform in Saudi Arabia is opening up lucrative investment opportunities in the kingdom’s underdeveloped media and entertainment sector.
Saudi Arabia’s debut at the Cannes Film Festival, coupled with moves to expand the number of cinemas and promote local filmmaking, is expected to support the kingdom’s efforts to double the entertainment sector’s GDP contribution.
The newly established Saudi Film Council (SFC), in conjunction with the General Culture Authority (GCA), hosted its own pavilion at this year’s Cannes event, which took place between May 8 and 19 in south of France.
While not entering any films in the main competition, participation in the festival provided Saudi film officials with exposure to audiences and industry figures from around the world, with the kingdom showcasing a series of short films from local filmmakers as part of the festival’s Short Film Corner event on May 14 and 15.
In addition, the networking opportunities provided the country the chance to develop potential new segments of its film industry, according to Awwad al Awwad, the minister of culture and information. “Saudi Arabia is embarking on the development of a sustainable and dynamic industry that supports and encourages all stages of a film cycle and offers an incredible range of locations for the world’s filmmakers to discover,” he said.
Saudi Arabia’s inaugural attendance at Cannes follows a series of big developments in the kingdom’s entertainment industry.
Following the return of public cinema screenings in April, US-based AMC Theatres, in partnership with the Development and Investment Entertainment Company, a Saudi Public Investment Fund (PIF) subsidiary, was granted the first licence to operate cinemas in the kingdom. The partnership aims to open between 30 and 40 cinemas across 15 cities within five years, and a further 50 to 100 by 2030.
The announcement was followed on April 22 by news that Vox Cinemas, a subsidiary of UAE-based business conglomerate Majid Al Futtaim, was awarded the second licence to open cinemas in the kingdom.
The company plans to invest $533.3 million to set up 600 screens over the next five years, which Saudi officials estimate will bring the total number of cinemas in operation to as high as 350 and the number of screens to 2,500 by 2030.
With a population of more than 33.4 million, according to the General Authority for Statistics, and 58.4 percent of those under the age of 35, the entertainment sector is expected to experience significant growth in the coming years. Public officials predict box office sales of around $1 billion by 2030, while the broader exhibition industry is forecast to create some 30,000 permanent jobs.
While most of the new cinemas are likely to screen predominantly international productions, the expansion of the sector is also expected to stimulate activity in local filmmaking.
As evidenced by the SFC-backed short film offerings at Cannes, the state has increased its focus on promoting domestic filmmaking.
Following its launch on March 20, the SFC has been tasked with developing a wide range of initiatives to develop the film industry, including offering support and training to local filmmakers, improving relevant infrastructure, developing a regulatory framework and creating a national fund for filmmakers. “Saudi Arabia is uniquely positioned to develop a vibrant and commercially successful film and content sector that tells Saudi stories at home and to the rest of the world,” Faisal Baltyuor, CEO of the SFC, said at the council’s launch.
The increased investment and focus on film marks another step in broader efforts to diversify the economy away from energy earnings.
One of the goals of Vision 2030, the kingdom’s overarching blueprint for social and economic reform, is to raise household spending on culture and entertainment to 6 percent of GDP, up from the current level of 2.9 percent.
With official data estimating that Saudis spend some $8 billion annually on entertainment and recreation abroad, providing opportunities to satisfy consumer demand closer to home will be key to meeting these goals.
May 3 saw the launch of the Quality of Life 2020 program, which aims to support diversification of the sector’s offerings, generate employment and support growth in related industries such as food and beverages, construction and inputs. The program’s targets include increasing the number of out-of-home entertainment venues from 154 to 260 by 2020.
In late April construction began at the Qiddiya project, an entertainment, sports and cultural precinct located 40 km south-west of Riyadh. The 334-sq-km site has plans for six entertainment clusters, including a theme park, sport arenas, motor tracks, water and snow sport facilities, vacation homes and venues to host cultural activities.
Phase one is scheduled for completion in 2022, and by 2030 the project is expected to generate some 57,000 jobs and contribute $4.5 billion to GDP.
According to the PIF, the Qiddiya project aims to attract over 30 million visitors by 2030. In comparison, the world’s most visited amusement park, Magic Park at Walt Disney World in Florida, attracted just over 20 million visitors in 2016, followed by Disneyland in California, with around 18 million, and Tokyo Disneyland in Japan, with 16.5 million.