June 5, 2018

“Yes We Cannes”: Cinematic Diversification in Saudi Arabia

Saudis stand in front of banner for "Black Panther"
Visitors wait in front of a banner for the film "Black Panther" during a screening at the King Abdullah Financial District Theater in Riyadh, Saudi Arabia, April 18. (AP Photo/Amr Nabil)
by Robert Mogielnicki

Ahmad bin Fahd Al-Mezyed, CEO of Saudi Arabia’s General Authority for Culture, used the 2018 Cannes Film Festival as a cinematic backdrop to garner international interest in the Saudi film and television industry. His announcement of generous commercial incentives for moviemakers follows related developments in the country: The popular superhero film “Black Panther” was screened in April after a 35-year ban on cinemas and the government launched the Saudi Film Council in March.

The General Entertainment Authority – established alongside the General Authority for Culture in May 2016 – plans to invest $64 billion in the entertainment sector as part of the country’s broad Vision 2030 strategy. Government officials expect to create between 200,000 and 300,000 new jobs and they hope the private sector will shoulder 60 percent of the costs. Specific investments in the film and television industry may help to accomplish a Vision 2030 goal of boosting household spending on cultural and entertainment activities inside the kingdom. Yet domestic and regional constraints will complicate the country’s efforts to develop a sustainable film and television industry in the heart of the Arabian Peninsula.

Next Stop, Saudiwood

The industry’s potential for increasing national employment opportunities is unclear. Many of the roles with cinema operators and similar entertainment providers represent the low-skilled, service-oriented positions often eschewed by national jobseekers because of social stigmas surrounding the service industry and a significant wage gap caused by higher-paying government positions. However, government officials anticipate that creative roles, such as those in visual effects, computer-generated imagery, and animation, will attract young Saudis.

The industry’s long-term growth potential also remains a concern. According to the World Economic Forum, jobs in the arts, design, entertainment, media, and sports have among the lowest expected growth rates – only outperforming manufacturing and production, and office and administration roles.

In theory, foreign direct investments facilitate the transfer of new technologies, management experience, and professional skills to local firms, which can boost productivity in host economies. Yet creating such positive productivity spillovers associated with the film and television industry involves not only transforming Saudi Arabia into an attractive hub for Hollywood, Bollywood, and Nigeria’s Nollywood studios but also granting more autonomy to local and foreign private sector actors. The state has not demonstrated a steadfast commitment in this realm, and rather has tightened control over the domestic and regional media landscape.

Considering the power dynamics between the government and local broadcasters, the industry has little choice but to operate on the state’s terms. The owner of the Middle East Broadcasting Center (MBC), Waleed al-Ibrahim, was forced to surrender his company shares to Saudi authorities during the anti-corruption campaign in late 2017. The newly government-controlled MBC, which holds a 50 percent market share in the country, dropped all of the widely popular Turkish soap operas and drama series from its channels in March. The Saudi Broadcasting Corporation, a government-owned entity, also recently pressured producers of an Egyptian Ramadan series, “Ard El-Nefaq” (Land of Hypocrisy), to remove a guest appearance by Ibrahim Eissa, a popular Egyptian journalist with critical views of Saudi foreign policy.

Mission Impossible?

Despite widespread beliefs that change is on the horizon, international film studios remain wary of Saudi Arabia’s recent record of state intervention in the media industry and longer history of social conservatism. Questions concerning the treatment of (foreign) female employees and how they would work in the country abound. Referring to an absence of clear commercial frameworks, Mezyed bluntly stated, “We are at the beginning of our journey.”

Global film studios may not be keen to wait. Well-established alternatives have existed in the region for nearly two decades, mainly operating within the confines of media-focused free zones and special economic zones. The Egyptian Media Production City and Jordan Media City launched in 2000 and 2001, respectively. International studios likewise started treating the United Arab Emirates as a serious filming destination after the producers of “Syriana” chose Dubai as a filming location in 2005. Dubai Studio City and Abu Dhabi’s twofour54 subsequently secured a series of high-profile Hollywood and Bollywood contracts, which included blockbuster hits such as “Fast & Furious VII” and “Star Wars VII.”

When compared with Saudi Arabia’s recent efforts to develop its industry, the UAE possesses the first-mover advantage within the Gulf Cooperation Council states. The country boasts the Abu Dhabi Film Commission, the Dubai Film & TV Commission, and international film festivals in Dubai and Abu Dhabi. In 2008, the UAE launched Image Nation, a film production company endowed with a fund of $1 billion and specifically tasked with developing national talent in the industry.

As a late entrant, Saudi Arabia can learn useful lessons from neighboring countries about constructive engagement with global film studios. For example, Abu Dhabi denied permission for the producers of “Sex and the City 2” to film in the emirate; the producers subsequently filmed in Morocco and marketed the film as taking place in Abu Dhabi. This upset the UAE’s media council, which believed the film company intentionally misled global audiences, as well as local film groups eyeing commercial opportunities and seeking to boost the emirate’s reputation as a filming location.

The Saudi Project

Publicizing Saudi Arabia’s liberalizing reforms is critical for attracting foreign firms and highlighting progress on Vision 2030’s social objectives. Local social media celebrities – including rappers and YouTube stars – offer powerful channels for promoting the country as an increasingly open and moderate media hub. Three of the top 10 female social media influencers in the Arab world are Saudi, according to a Forbes study. Yet the social media realm remains vulnerable to state control and market regulation. For example, the UAE’s National Media Council declared in March that social media influencers must obtain e-media licenses to work in the country.

Saudi Arabia should limit its market interventions and provide short-term incentives for investment to extract the maximum value from the film and media industry. The country has, thus far, relied on the power of economic largesse to garner global interest from film studios: The government will provide a 35 percent location rebate and a 50 percent rebate for firms that hire local talent. These commercial incentives risk undercutting state-owned media outfits in neighboring countries, but Saudi Arabia is betting that the economic pie connected to the industry is large enough to share.

Robert Mogielnicki is a PhD candidate at Magdalen College, University of Oxford, where he specializes in the political economy of the GCC region. He also serves as a senior analyst at the Siwa Group, a consultancy based in Washington, DC.