Is Saudi Arabia’s box office boom over or set to rise again?

In the years that followed Saudi Arabia’s reopening of cinemas in 2018, the country boasted arguably the most exciting and dynamic box-office market in the world. A cinema-building spree rapidly grew the country’s screen count to its current level of around 612. This helped Saudi leapfrog to the top of the Middle East market — the country accounts for an impressive 42% of region’s box office this year.

In global terms, it is now the 15th biggest box-office market in the world, capable of delivering healthy returns for the right kind of film. Success stories include 2024 action thriller Bad Boys: Ride Or Die starring Will Smith and Martin Lawrence — the fourth entry in Sony Pictures Entertainment’s franchise is not only the biggest film of the year in Saudi but the biggest ever in the territory, with a healthy $23.5m at the box office.

But there is now far less positivity about the Saudi exhibition market compared to the go-go early years. Since 2022, annual box-office takings have not just plateaued around the $250m mark but have slipped gently into reverse this year, despite more cinemas coming online.

This is partly because ticket prices have dropped to encourage audiences to keep coming to the cinema in the face of streamer competition. Tickets now cost around $13, a fall of more than 30% from their peak. Saudi has gone from having the most expensive tickets among the Gulf Cooperation Council countries to the fourth most expensive, behind the United Arab Emirates, Qatar and Kuwait.

But the drop in ticket prices has not significantly boosted the market, with the result that some exhibitors and distributors are hurting. There is talk of a few cinemas being closed in Saudi as a result. Others are said to be opening only a proportion of their screens in a bid to reduce overheads such as staffing costs. High ticket taxes are eating into exhibitor and distributor margins, and an over-concentration of screens in key cities is adding to the problems.

At least one of the major exhibitor groups operating in Saudi is said to be exploring a possible sale amid high debt levels incurred during its rapid expansion. Last year, AMC Entertainment Holdings, the world’s biggest cinema chain, exited the Saudi market in the face of intense competition, selling to Saudi Entertainment Ventures (Seven), which is operated by the government’s Public Investment Fund.

One distribution executive that spoke to Screen International, who preferred to remain anonymous, claimed major studios are only releasing big films to one struggling exhibitor once they have been paid money owed. “They are renewing their KDMs [key delivery messages required to play an encrypted movie] on a weekly basis, just to make sure they’re going to get paid, otherwise they won’t give them their films.”

The distribution market has also cooled. Amid the excitement of the country opening up, distributors paid competitive sums for the rights to big independent films. Bidding wars for titles from major US sellers were common, but less so now. Minimum guarantees have dropped as a result, reflecting the reality of a market that has levelled out. “When Saudi opened up, almost any film would work. But now audiences are a lot more selective,” says the executive.

One bright spot is the market for Arabic-language content, particularly from Egypt. The figures underline the executive’s point: the top five box-office films of the year so far include two Egyptian titles (action drama Sons Of Rizk 3 and romantic comedy Gawaza Toxic) and one Saudi comedy (Shabab El-Bomb). According to Comscore, Egyptian titles now account for an impressive 25% of the Saudi market, while local Saudi features have a 7% share. US films, by comparison, take 53% of box office in the country.

Adon Quinn, CEO of Saudi exhibitor Muvi Cinemas, believes that Arabic content can help drive future growth. He predicts Arabic films might cross the 40% box-office share of the market next year, and could hit 50% by 2026-27. One of the reasons for the popularity of Arabic content is that audiences grew up with it on TV, before cinemas reopened. “There are so many great local stories being developed and people can resonate with what they are seeing on screen,” adds Quinn.

He points out the wider Saudi box-office slowdown echoes what has happened in markets around the world this year. Its main cause, he says, is the depleted supply of content caused by Covid and last year’s Holly­wood actors and writers strikes. “The strikes had a big impact on the first half of 2024,” he observes. “We’ve seen when the right content is there, the audience is there.”

Quinn thinks 2025 will see a “slight uptick” at the Saudi box office, but it will be 2026 before the Hollywood supply returns to pre-2019 levels and drives growth again.

Action stations

There is often little correlation between the US and Saudi box-office charts for Hollywood content; the same film can perform very differently in each market. Saudi champ Bad Boys: Ride Or Die is a case in point. At time of writing, it is the 11th biggest film in the US but significantly overperformed in Saudi compared to other markets — in fact Saudi was the film’s second biggest market worldwide after the US.

One of the reasons is that Smith and Lawrence stopped in the territory as part of the world tour to promote the film. It was the first ever red-carpet premiere for a Hollywood studio film in the country. “What Sony did with Bad Boys really helped,” says Quinn. “A lot of the studios are now looking at this and considering Saudi as part of the junket tour.”

Also, Saudi often over-indexes on action movies like Bad Boys, says Robert Mitchell, director of theatrical insights at Gower Street Analytics. He cites The Beekeeper, starring Jason Statham, which has taken $6.2m in Saudi and is the seventh biggest film this year in the country. Saudi was the number-four market globally for the title, with only the US, China and Germany delivering better figures.

Animation is also popular in Saudi. Inside Out 2 is the fourth biggest film of the year so far, while The Wild Robot and Despicable Me 4 are in 10th and 11th place. Mitchell says that “Saudi Arabia has become an incredibly important territory because — for the right films — it can be very significant”.

Superhero movies, however, do not perform quite as well in Saudi. Deadpool & Wolverine is a case in point: at first glance, the Ryan Reynolds and Hugh Jackman film performed well in Saudi — it is the year’s sixth-biggest film on $7m. But Mitchell points out that Saudi was only the 26th-highest market worldwide for the Marvel Studios’ outing.

Muvi Cinemas’ Quinn suggests “that fatigue with superhero films started [in Saudi] a little bit earlier than the rest of the world”.

Tim Burton’s Beetlejuice Beetlejuice also performed differently in Saudi compared to other markets. It stands at number 44 in the Saudi box-office ranking, while it is number four in the US. More recently, Wicked only opened at number three in Saudi (Gladiator II in its second week was top), largely because the IP is not so well-known in the country. Indian movies can also generate good returns, with releases from India currently accounting for around 3% of box office this year, while last year they took a 5% share.

Missing link

Notably, Saudi lacks arthouse cinemas equivalent to the UK’s Curzon and Picturehouse chains. It means arthouse titles find most of their audiences on streaming platforms. For some, this points to a missing element of the Saudi cinema industry. Exhibitors tend to aim at mass audiences with big films, rather than targeting discreet segments attracted by alternative fare. “There is very little counter-programming,” says one executive. “The big multiplexes will all bet on one film at the same time. And if it fails, then it’s a big problem.”

For his part, Quinn is optimistic about the future of the Saudi market. Muvi has not opened any new cinemas this year; it currently has 21 theatres and 205 screens. But it will continue to expand. Quinn says Muvi will open another five cinemas and 60 screens in the next 12 months, taking its presence to 11 cities in the Kingdom.

Overall, he estimates Saudi will have 1,300-1,500 screens by 2030 — more than double the current number. It seems a bullish forecast given the box-office slowdown this year. But he sees Arabic-language content as key for driving growth in the coming years. “Arabic content is what’s going to unlock a lot of the secondary cities,” he says. “Especially Saudi content — we’ve seen it continually over-performing in the secondary cities where language may be a little bit more of a barrier.”

Mitchell also strikes an optimistic note about the market, and puts its box-office performance this year into a global perspective. “The Saudi box-office market is slightly down this year, but it’s performing better than most other markets year on year,” he says. “The fact Saudi is down on last year isn’t necessarily an indicator Saudi isn’t growing.”

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