In an historic move, the Public Investment Fund of Saudi Arabia (PIF) announced Wednesday that its wholly-owned subsidiary, the Development and Investment Entertainment Company, has signed an agreement with AMC Theaters to operate cinemas in the Middle Eastern nation. The deal, which follows a decision reached by the country’s Ministry of Culture and Information last December, marks the first time a commercial theater chain has been allowed to set up shop in Saudi Arabia in over 35 years.
“The granting of the first license marks the opening of very significant opportunities for exhibitors,” said Dr. Awwad Alawwad, Minister of Culture and Information. “The Saudi market is very large, with the majority of the population under the age of 30 and eager to watch their favourite films here at home.”
The deal, part of the country’s social and economic reform program known as Vision 2030, will make it the largest market for filmgoers in the Arabian Gulf region.
“The aim of Saudi Vision 2030 is to improve the quality of life for Saudi families by providing an array of entertainment opportunities,” Dr. Alawwad continued. “The restoration of cinemas will also help boost the local economy by increasing household spending on entertainment while supporting job creation in the Kingdom.”
AMC plans to open their first Saudi-based theater on April 18 in the capital city of Riyadh. The country is set to establish nearly 350 cinemas with over 2,500 screens by the year 2030.
“AMC has been extraordinarily impressed by the imagination to move Saudi Arabia forward as detailed in Vision 2030, and we have been emboldened by the professional, gracious and warm welcome we have received from the Ministry of Culture and Information, from the Public Investment Fund and from every Saudi institution and individual with whom we have been in contact,” said AMC Entertainment CEO and President Adam Aron. “We greatly look forward to serving the people of Saudi Arabia with truly world-class theaters all across the Kingdom.”
The decision opens up a major market to cinema exhibitors, who are eager to gain a foothold in the country of 32 million. One estimate suggests gross receipts could approach USD $1 billion annually.
The Development and Investment Company was fully incorporated earlier this year with a mission to grow the entertainment sector in Saudi Arabia through strategic partnerships. The initiative is part of crown prince Mohammed bin Salman’s push to diversify the Saudi economy and liberalize the culturally conservative nation, which banned movie theaters in the 1980s.