Exhibitors Share Trends and Challenges for Theatrical Marketplace in the Middle East

Image courtesy Novo Cinemas

“Making hay while the sun shines” is how John Sullivan of cinema advisers The Big Picture characterizes the current state of theatrical exhibition in Saudi Arabia—a market that, bucking current worldwide cinema trends, is continuing to grow in the latter half of 2020 despite the presence of a global pandemic. Saudi Arabia, of course, is a rare case, as the country’s decades-long ban on public cinemas was lifted only in 2018; the wider MEAP region (Middle East, Afghanistan, Pakistan) was the subject of The Big Picture’s November webinar “Trends and Challenges in the Middle East,” offering insight into one of the more dynamic areas of global theatrical exhibition.

With all the potential to be found in Middle Eastern markets—“screen growth has been the bedrock of the sector,” says Charlotte Jones, principal analyst at OMDIA—the loss of box office caused by the Covid-19 pandemic represents a major setback to exhibitors of that region; Fredrik Jonsson of Novo Cinemas (UAE, Bahrain, Oman, Qatar) estimates that it will take “another four to six months until business comes back.” For Pakistan-based Cinepax, the situation is even more dire, as the pandemic came on the heels of another crisis: In 2019, due to geopolitical reasons, theaters in Pakistan stopped playing Bollywood movies, which make up 60 percent of that market’s box office. 

Still, there have been silver linings, explains Cinepax CEO Mariam El Bacha. One of those, from a programming perspective, has been the BTS concert film Break the Silence: The Movie, which screened in Pakistan quite successfully upon that country’s cinema market reopening in September. (Cinemas in Pakistan subsequently closed again due to rising Covid-19 numbers.) “Even though sometimes you feel that BTS has nothing to do with Pakistan… you have to look again and see the opportunities,” says El Bacha, who emphasizes the importance of content that is both current and “relevant to the market.”

For Jonsson, the upscale experience offered to Novo patrons (at an upscale price) plays a role in bringing people back to the theater mid-pandemic; “boutique luxury experiences” such as Novo’s “7-star” experience (pictured above), featuring access to a private lounge and and butler service, contribute to social distancing and a sense of safety. “You feel like you’re in a smaller space with fewer people around,” he says. Smaller, more intimate screens “lend themselves quite well into private bookings for a group or a larger family or other private screening.” 

Pre-Covid, luxury experiences were a must-have to many theater patrons in the Middle East; Paul Fox, director of Dubai-based Roxy Cinemas notes that the MEAP market “is more competitive at the top end than anywhere else I’ve ever been in the world.” At some cinemas Roxy offers a “Platinum Plus” experience with recliner seats, an exclusive lounge, a full menu, and an on-call waiter. Novo, in addition to the 7-star tier, has begun “diversifying the product offering” away from the traditional megaplexes to a more “boutique style [of] cinemas,” says Jonsson, with smaller auditoriums that allow for a more personalized experience for guests. Fox and Jonsson both emphasize the importance of, in Jonsson’s words, “knowing the customer that comes through the door.” He adds: “The ancillary spend is quite significant. That we are able to monitor that through the loyalty card is quite interesting.”

The luxury experience so popular in the Middle East, Fox believes, can help counteract the fact that, during the pandemic, people have gotten more accustomed to watching movies at home. “We, as an industry, have to make sure that people are excited to come back to the cinemas,” he notes, adding that the trend towards luxury he’s seen over the last two years has sped up through Roxy’s reopening in the second half of 2020. “As hard as it’s been for the last however many months—and will continue to be for a while—we have to [ask], ‘OK, how do we bring that magic back? How do we make it much more than just going and watching a movie? How do we make it a real event again?” 

Returning to normality and thriving in the long-term, argues Fox, will take more than reminding Roxy’s regular customers—75 percent of the chain’s guests belong to their loyalty program—of the quality of the moviegoing experience. That segment of the audience, “I think we’ll get back fairly quickly and easily once we have content they want to see.” Getting the “irregulars” to turn moviegoing from a rare occurrence into a habit is a key part of Roxy’s strategy moving forward. “To actually compete at the top-end [of the market]—we’re never going to bring the masses through the doors,” he says. “We focus on how we can bring somebody in six, seven, eight times a year as opposed to three, four, or five. And when they do come, make sure that basket spend is much, much higher.”

For El Bacha, the continuing development of the Pakistani market comes down to two things: opening more cinemas in cities outside the major markets and having access to a steady stream of content. The latter necessity is obviously complicated by both Covid-19 and the aforementioned ban on screening Bollywood films. “In 2018, we had a record-breaking year [due to] a combination of fantastic Hollywood movies, fantastic Bollywood movies, and amazing Lollywood [Pakistani] movies,” says El Bacha. “What Bollywood gave us was continuity of new content every week,” building a market that in turn encouraged local Pakistani producers to invest in their own product. Especially now, in a time when new Hollywood tentpoles are scarce, local content has become ever more important in helping to keep the cinema industries of international territories afloat. But even in normal times, a thriving local film industry is key to the success of a market’s theatrical operators. “Without local content,” Fox agrees, “there isn’t really an industry. I think in the UAE and the Middle East in general there are opportunities to drive more of that.”

But local producers can’t make up for an overall lack of content, which per Jonsson contributes to the number one challenge faced by Novo at the moment: Cash flow. “Until content comes back, the whole cinema industry is facing existential issues,” he says. “So that’s the biggest challenge. And then the second one is probably how to get our cinema lovers to come back [to] the movies again.”

El Bacha, meanwhile, describes the mood at Cinepax as “quite relaxed,” noting that “I work in a country that has endured many issues that are way more difficult than Covid, to be perfectly honest. Therefore the attitude of the people and the attitude of the consumer is very relaxed, which allows you to restart your life… in a way that may take time in other countries. Because what’s important is that, in these countries where they’re constantly facing adversity, life goes on. And we just need to flow with it.”

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