Los Angeles (Bloomberg, Reuters) - AMC Entertainment Holdings, controlled by China's Dalian Wanda, was granted the first cinema license in Saudi Arabia and plans to open 100 theatres with the country's Public Investment Fund.
AMC, the world's largest exhibitor, and the Development & Investment Entertainment Co., a subsidiary of Saudi Arabia's PIF, plan to open as many as 40 cinemas within five years and 60 more by 2030, according to a statement on Wednesday (April 4) from the Leawood, Kansas-based company.
There are no commercial theatres in Saudi Arabia and plans to open them present challenges for the conservative kingdom, such as whether men and women can sit together and what types of movies will play. The partners are aiming for "50 percent market share of the Saudi Arabian movie theatre industry", the parties said. The first AMC in Saudia Arabia will open in the capital Riyadh on April 18.
Saudi Arabia had some cinemas in the 1970s but its powerful clerics closed them, reflecting rising Islamist influence throughout the Arab region at the time.
In 2017, the government said it would lift the ban as part of ambitious economic and social reforms pushed by Crown Prince Mohammed bin Salman. He is currently touring the United States seeking investments to help broaden the economy and lessen its dependence on oil.
The goal is to open 30 to 40 movie theatres in 15 cities in the next five years, and a total of up to 100 in the next decade in 25 cities, Adam Aron, AMC's chief executive officer, said on a conference call. Cinemas won't initially be segregated by gender, though some showtimes may be exclusive for women or men, he said. "The rules of operation are in formation as we speak," he said.
In terms of the types of films, he said that AMC will exhibit all major releases from Hollywood studios that "are appropriate for the Middle East".
Saudis are likely to see Hollywood's major hits coming out in the second quarter, he said, as well as homegrown fare. "I expect to see a Saudi film industry emerge out of this," he said.
The first screening will be Marvel's superhero movie Black Panther, a source familiar with the matter told Reuters.
Aron estimated the local movie market could generate US$1 billion (S$1.3 billion) annually in the next five years. The company expects its revenue split with studios to be in line with other countries in the region. Tickets are likely to cost 60 riyals (S$21) including taxes, Aron said.
The Saudi crown prince, or MBS as he's known, met Los Angeles Mayor Eric Garcetti and media industry leaders including Rupert Murdoch and Warner Bros. chief executive officer Kevin Tsujihara. The Public Investment Fund is poised to take a US$400 million stake in the Hollywood talent agency Endeavor as part of plans to diversify the kingdom's oil-based economy.
The movie industry is expected to contribute about US$24 billion to the economy and add more than 30,000 permanent jobs.
Imax Corp. is also interested in opening theatres in the country - it operates the only cinema screen, which is housed in a science museum.