We all are aware that the Kingdom of Saudi Arabia has opened its door to Movie Theatres after waiting for long 35 years. The opening of the first movie theatre was christened with the cooperation of American cooperation (AMC).
Black Panther was the first movie that screened in the Kingdom’s cinema theatre on 18th of April, 2018 in the Capital city Riyadh. This movie was exhibited at the King Abdul Aziz financial center in Riyadh under the license of American Operator AMC that converted its old sympathy hall into its first Saudi Arabia movie venue.
Since the cinema theatre has opened in the Kingdom, the Saudi Cinema industry has become the subject of several economic theories to explain about the high price of Cinema tickets in the Kingdom.
The first movie tickets were sold at a price of $20 i.e. SR 75 on which the people of the Kingdom including Andrew Cripps the president of 20th Century Fox International Distribution described too high to charge for the movie.
However, the CEO of American Cooperation Aron Adam opposed Cripps and said SR 75 to charge for a ticket is honestly too low and it should hike to SR 115 or SR 130 because the local entertainment tax is high due to pent-up audience demand.
The people of the Kingdom say the cinema ticket charged SR 75 in the Kingdom which is indeed too high price as compares to other countries mostly, Bahrain and Dubai.
In Saudi Arabia, if a family of five members wishes to go for a movie they will have to spend SR500 only for movie tickets beside other expenses of popcorns or drinks.
A marketing professor Dr. Obaid Al-Abdali tried to clarify the issue saying when a new thing is introduced in the market it definitely cost high but gradually the price lowers down when more competitors enter the market.
Just like Nokia mobiles when introduced in the Kingdom Market, they were costly but soon their high price was lowered after several other mobile companies entered the market. Hence the price of the movie tickets will lower when more competitors will enter the market.
He said the real challenge for AMC will be to retain its customers after new competitors in the market. He believed that the price of the cinema ticket will fall in the upcoming time as VOX Company has won the license to enter Saudi Arabia.
VOX has planned to invest over two billion to operate 600 movie theaters in the next five years while AMC entertainment holding has signed an agreement with Development and Entertainment Investment company to win nearly 50% of the total market shares and open 40 movie theaters in 15 cities of the Kingdom in the next five years and the total number of 50 to 100 cinemas theatres in approximately 25 cities of Saudi Arabia by 2030.
The people stood angrily at the news of an increase in the price of Cinema tickets to SR130. The cinema ticket price is the highest in the Kingdom as it included 5% VAT and 25% of it is the fee charged by the Visual and Audio Media.
The price of the movie ticket in the Kingdom is equal to the movie ticket price in Japan. In the Kingdom, it is charged $20 while in Japan the price is $21. In Kuwait, the ticket is charged for $11.50 and in Jordan, it is $14.
Source: Saudi Gazette