Saudi box office revenue could hit $772 mln by 2030: report

Saudi Arabia could see annual box office revenues of $772 million (SAR 2.9 billion) by 2030, at a ticket price of $20, Saudi Fransi Capital said in a recent report.

Assuming a rate of $35 per ticket, box office revenues could soar to $1.4 billion (SAR 5.1 billion)

According to the report, the Kingdom stands to earn SAR 724 million in annual entertainment taxes from cinemas with tickets priced at $20. The annual tax potential rises to SAR 1.3 billion with a $35 ticket price.

“If predictions of $1 billion revenues placing KSA among top 10 markets come true, the impact on consumer spending habits could be visible over the next 3 years,” Saudi Fransi Capital said.

Following the lifting of the three-decade ban on cinemas last year, Saudi Arabia is expected to host 2,000 screens across 100 theaters in 25 cities by 2030.

This would diversify the economy by developing the tourism sector, creating jobs, and capturing a larger share of outbound tourist spending, particularly to neighboring countries such as Bahrain and UAE.

Cinemas are expected to contribute SAR 90 billion to the Saudi economy, or 3.5 percent of GDP by 2030, with household entertainment expenditure expected to increase to 6 percent from 3 percent. In addition, some 30,000 full-time and 130,000 part-time jobs will be created.  

While Saudi Fransi Capital estimates some SAR 2.9 billion in annual box office revenues by 2030, indirect contribution could be substantially higher, such as through restaurant and café sales, for instance.

“More importantly, redirected outbound tourist flow and spend (estimated at $20 billion per annum) could be a substantial contributor,” the report added.

Cinema admissions in the Kingdom are expected to be strong given an absence of entertainment alternatives, demographics, income levels, climate and family dynamics.

Over time however, with an increase in domestic entertainment options, cinema admissions may normalize.

Potential challenges facing the growth of cinemas in Saudi Arabia are relatively high ticket prices: standard ticket prices range from $8-$12 internationally, compared to $20 in Saudi Arabia.

Moreover, consumer preferences are also rapidly changing, as indicated by the growth of digital home entertainment as well as subscriptions to online video services like Netflix.