Cinemas are an integral part of modern-day lives, isn’t it? For most of us in various parts of the world, it is tough to think about how important the re-opening of theatres and cinemas is to the Saudi residents. This is an example of how King Salman bin Abdul Aziz, and his son, Crown Prince Mohammed Bin Salman, are taking steps for their people. Some of these reforms are being done under the Saudi Vision 2030 and the National Transformation Plan. There surely is a thrust to develop sports, recreation and other cultural events and areas of the economy, so as to provide ample options to the residents to relax and enjoy their leisure time and also spend money in the economy. One of the targets in the Vision 2030 is to raise the annual spend out of the total household spending on cultural and entertainment activities in Saudi Arabia from current 2.9% to 6% by 2030.
This year has been different as various diverse entertainment and cultural events have been organized in the Kingdom. The most popular event that got a lot of international media coverage was the Saudi Professional League football matches, in which women viewers were allowed to come and watch the series. Some other events like a World Wrestling Entertainment event and an avant-garde circus, go on to prove that Saudi Arabia is surely opening up and changing. Related to this, there are various opportunities for enterprises working in the leisure or entertainment field.
Cinemas in the Kingdom
If you look at the history, cinemas or theatres were only found in Saudi Arabia in residential complexes or in expat communities. Riyadh was the only place which had its own ‘cinema neighbourhood’, which screened movies in an informal manner as a formal cinema license were not available in the Kingdom at that time. However, the Kingdom’s film production saw a golden age starting from the year 1966 till1970s.
But during the end of the 1970s, some changes happened on the political and also social front, which disrupted the cinemas in the Kingdom. The movie industry was endorsing religious violations and customs that were going against the set rules and traditions of Saudi Arabia. This resulted in the closing of cinemas in the year 1980.
But the good news is that the cinemas are back in action in the Kingdom now. Recently, the first cinema event, in which the recent blockbuster, Black Panther was screened, has been held by US company, AMC, in Riyadh. Vox Cinemas, which is one of the major cinema operators here, launched its first multiplex in the Kingdom.
The licensing regime
The Kingdom has now opened up and permitted the cinemas to be licensed in the domestic market. The projection numbers show annual ticket sales of about USD 1 billion, which places Saudi Arabia as an attractive market for international film industry players. The forecast says that about 350 theatres or cinema halls, with 2,500 plus screens, would be opened by the year 2030.
There is a body called the General Commission for Audiovisual Media (GCAM), which was established in 2012, for organizing and functioning of the audiovisual sector here. GCAM takes care of everything right from producing, distributing and also broadcasting movies. It is a regulatory body which lays guidelines, oversees the operations of the audio and visual media content and also sets the regulations for the establishing TV and radio studios, the satellite TV provision, the process of licensing of audiovisual production companies, and the process of TV and radio competitions. This body also takes care of the approvals of the content and does age classifications for various movies to be released and also video games.
Then there is GEA (established in 2016), which is responsible to provide various entertainment channels to Saudi residents and expats. The GEA aims on licensing of various cinema or entertainment events and liaising with the concerned government departments to restructure the process of approvals; whereas GCAM is just responsible for the content of media, and cinema licenses.
GCAM issues licenses to companies who want to establish or operate cinemas. There are three-year renewable licenses available in case someone wants permanent cinemas or a one-month renewable license if it’s a temporary cinema. An applicant for this license should have the necessary commercial license and an official application form. He/she also should submit a feasibility study, with proofs and documentation showing their past experience in operating cinemas. Along with the fixed component in the fee for running a cinema, the operator needs to pay GCAM about 25% of the total value of the cinema tickets sold. They are also required to respect the intellectual property (IP) rights and comply with the Saudi laws regarding media content and age classifications for all movie screenings.
For foreign investors in the entertainment sector, this is a very good time for investment in Saudi Arabia. IMC has a team of experts and advisors who can assist you if you have questions regarding business or cinema licensing in Saudi Arabia or need help with company formation in Saudi Arabia.
