Gulf states: Narrowing the Gulf

Box-office revenues from the United Arab Emirates have grown so dramatically they now account for more than half of all theatrical grosses that come out of the Arabic-speaking marketplace.

Films generate an estimated $250m currently from the 1,200-1,400 screens that exist across the Arab world - an exhibition base that fluctuates according to seasons. Of that total, the UAE now makes up more than $135m despite a population size only a tenth that of Egypt. Making the disparity even starker is the fact that Egypt boasts 400 cinema screens, twice as many as the UAE’s still expanding movie circuit.

With Egypt’s annual production volume now dropping to 25 feature films amid the political turmoil in the territory, the Gulf has assumed Egypt’s place as Arab cinema’s financial powerhouse, propelled largely by the Gulf Cooperation Council (GCC) territories’ major festivals. Film analyst Alaa Karkouti suggests that the festival competition prizes account for a full 1% of all Arab movie revenues. He puts the combined budgets for Arab film festivals at between $75m and $100m annually - not far short of the entire net receipts that film distributors get back from selling movie tickets across the Arab world.

Arab film funds, including that of Morocco, contribute an estimated $12m-$15m annually to productions. Despite such munificence, Arab filmmakers continue to struggle to get their supported films in front of paying audiences, especially beyond their countries of origin. Egyptian films may enjoy a 60%-70% share of the local market - or at least they did before curfews struck movie-going in that country - but Arab films as a whole achieve no more than 15%-20% of the Arab box office at best.

Hisham Al-Ghanim, general manager of the privatised Kuwaiti exhibition chain Cinescape, has handled the release of some two dozen GCC titles since 2004. But he can count on one hand the home-grown box office hits that have gained more than 50,000 admissions in Kuwait.

‘Admissions rose by 16% compared with the same frame last year’

Roy Chacra, Shooting Stars

“Exhibitors in the region only consider Egyptian titles as commercial. Beyond those, our experience is that only two or three Arabic movies have been successes here, even if they have been professionally made or performed well in their countries of origin, such as the Lebanese films Caramel, Bosta and Where Do We Go Now?” says Al-Ghanim. “What we need to do is build trust between the audience and the GCC film industry.”

One problem with the GCC model, according to Mohamed Hefzy, the head of Cairo-based production hothouse Film Clinic and a co-producer on Emirati director Ali Mostafa’s A To B, is that the Gulf market is untested when it comes to local product.

“Very few TV stations buy Gulf films, simply because there isn’t yet a regular supply and a sustainability of quality. I think in the future the GCC market can be very self sustainable if it goes for star-driven comedies, but hardly so for film-makers who make serious auteur-driven films that remain within the realm of independent cinema that is supported by governments, festivals and non-profit institutions,” says Hefzy.

Growing screen numbers

Hollywood films on the other hand are seeing soaring revenues, particularly in the UAE where franchises such as Transformers and The Dark Knight keep increasing their theatrical revenues with every new instalment.

That story has continued, says Roy Chacra, managing director of Shooting Stars, which handles Warner Bros’ theatrical releases, including, this year, Man Of Steel, which became the biggest WB grosser ever in the region and The Conjuring which broke the box office record for a horror film.

“It was a very good year for the industry overall as admissions rose by 16% compared with the same frame last year,” says Chacra. “More screens are being added to existing leading venues and more multiplexes are being built which will increase the business overall. It remains to be seen whether these new additions will end up cannibalising the marketplace.”

Regional population growth has added around 2% to annual revenues over the last year, says Al-Ghanim. And a market restructuring this year that saw Qatar Media Services assume full control of both distributor Gulf Film and the Middle East’s most expansive chain Grand Cinemas has been seen as positive.

‘Our experience is that only two or three Arabic movies have been successes in the region’

Hisham Al-Ghanim, Cinescape

“The change in management means there’s more space for co-operation in the industry which is resulting in more diligent buying and therefore theatrical growth in the industry. The mentality is changing and it’s all making much more sense,” observes Gianluca Chakra of distributor Front Row Filmed Entertainment. “That all said, there is still not much growth when it comes to the more indie releases since no arthouse cinemas have been introduced in the region.”

Beyond the theatrical market, Arab film-makers have access to 21 movie-only channels that play their films. The growing video-on-demand outlets are said to account for between 1%-5% of the entire film revenue stream in the Arabic-speaking world. Indeed, premium VoD is emerging as a potential saviour for independent cinema in the region, with some films seeing triple the revenues from on-demand viewing than they achieve from their theatrical release.

“Our obstacle remains educating the market as well as the actual service providers. The premium VoD window enables the viewer to watch the same film that was missed a few weeks ago in theatres for the price of a cinema ticket. Only this time with the entire family,” says Chakra, although he cites VoD providers’ focus on major studio releases as also being an ongoing problem.

“They are often not prioritising independent releases even though, in the past when DVD was big, these would often beat studio titles. There was - and I believe there still is - a hunger for niche titles. Other platforms with aggregators based in Europe totally understand the need for this but the ones in this region seem to follow the strategy of the safe bet.”

Disclosure: Colin Brown serves as a prospective (minority) partner in MAD Solutions, the Cairo consultancy company that is moving into distribution