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'Black Panther' in Saudi Arabia? Hollywood Sweeps Into Islamic Kingdom

The Wall Street Journal. logo The Wall Street Journal. 4/16/2018 Erich Schwartzel and Margherita Stancati

Saudi Arabia wants to do more than export oil. So it’s importing popcorn machines.

On Wednesday, when moviegoers in Riyadh take their seats to watch a screening of Walt Disney Co.’s “Black Panther,” it will be the first time a Hollywood movie has played in a theater in Saudi Arabia in 35 years. AMC Entertainment Holdings Inc., the world’s largest movie theater company, is the first to operate in Saudi Arabia since a longtime ban on cinemas was lifted five months ago.

AMC’s inaugural theater in the kingdom, in Riyadh’s King Abdullah Financial District, will open with a gala reception—popcorn included. In the coming months, three more screens will be added to the theater—part of an initial wave of 40 theaters AMC is planning in 15 Saudi cities within five years.

For AMC and other exhibitors, Saudi Arabia is a rare growth opportunity in an industry that faces stagnant attendance in the U.S. and a concern among investors that the companies have built too many theaters.

“There might be some remote country someplace that doesn’t have movie theaters, but not where you would find a GDP close to Saudi Arabia’s,” said Adam Aron, chief executive at Leawood, Kan.-based AMC.

As recently as a year ago, the idea of Hollywood coming to the religiously and socially conservative kingdom would have been unfathomable. But under Crown Prince Mohammed bin Salman, the country has introduced more liberal policies in recent months, including lifting a ban on women driving set to go into effect in June.

Developers across Saudi Arabia have been building theaters in anticipation of the ban being lifted, and many new malls in the country have empty theaters, waiting for operators to move in.

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AMC was able to get a theater mounted quickly after Mr. Aron met with officials from the country’s sovereign wealth fund in February and told them it would take about a year for a new AMC theater to be built and up and running. Hoping to move faster, the officials asked Mr. Aron to consider converting a recently built symphony hall they controlled, so new that it has never staged a concert.

The hall was part of a $10 billion development designed to draw global financial companies, but a decade after work on it began, it is still under construction and it remains mostly empty. Saudi Arabia’s sovereign wealth fund, the Public Investment Fund, took control of the struggling financial district last year to oversee its completion. That eased AMC’s entrance.

The opening of the kingdom’s first cinema there could help revive the project. The auditorium seats more than 500 people, a massive capacity for a movie theater, which typically seat around 200. Eventually, AMC plans to replace the seats with the exhibitor’s recliner-style seating, which would reduce the capacity to 400.

It’s still unclear how Saudi officials will censor the movies they allow into the country, but other religiously conservative governments in the region have been known to ban any scenes with affection between men and women and sometimes even blur out non-Muslim iconography like the Star of David. Mr. Aron said Wednesday that details on censorship were still being ironed out between Saudi officials and the Hollywood studios.

Even though cinemas will be new to the country, Western entertainment will not. Across Saudi Arabia, many residents keep up with Hollywood movies by flying to the United Arab Emirates for weekend screenings, often filling theaters. Satellite TV and streaming-video providers like Netflix Inc. are widely used.

Saudi officials want to keep more of that spending within their own country—part of an effort to diversify their economy beyond the oil market that has fueled the kingdom’s growth for decades.

The Saudi government says it hopes some 350 cinemas with more than 2,500 screens will open by 2030. In pitches to the private sector, Saudi officials have pointed to the country’s 32 million people, the majority of whom are under 30 and have high disposable income.

AMC is not alone in the rush to build. London-based Vue International says it plans to build up to 30 multiplex cinemas in the kingdom over the next three years in partnership with a local company.

Other exhibitors that have announced plans to enter the Saudi market include the luxury theater-and-restaurant chain iPic Entertainment and VOX Cinemas, the largest theater operator in the Middle East.

Many rules will apply to the theaters. Gender segregation, for instance, is widely practiced in public places like restaurants, where unrelated men and women officially aren’t allowed to mix. Some theatrical screenings will be for women and their family members, and others for men only.

Saudi Arabia doesn’t want just cinemas—it also hopes to eventually become the new hub of Arab filmmaking. Earlier this week, during Prince Mohammed’s visit to Paris, the Saudi Ministry of Culture and Information announced the kingdom will bring a pavilion at the upcoming Cannes Film Festival, where Saudi filmmakers will screen short films.

“In the past, movie making in the region used to be in Egypt,” said Faisal Bafarat, chief executive of Saudi Arabia’s General Entertainment Authority. “Now the center of gravity is moving to Saudi Arabia.”

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