A new US-style mall opens every couple of months in the Gulf, most of them complete with a multiplex. Exhibitors in other territories, including Egypt and Lebanon, have ambitious plans to expand their reach but all battle with censorship and piracy and, outside the Gulf, with political and economic uncertainty.
"Last year the Middle East grossed about the same for us as Poland," says Mark Braddel, Sony's senior vice-president of distribution for Eastern Europe, the Middle East and Africa (distributing through Empire International). "But while no-one talks about the Gulf, it's growing faster than anywhere else. Eastern Europe had its moment of huge growth in the early 2000s - now it's the Middle East's turn."
Leading Gulf exhibitor Grand Cinemas opens a 10-screen multiplex in Jordan in October, and a 14-screener in the United Arab Emirates (UAE) in December. Bahrain, which attracts weekend traffic from Saudi Arabia, expects to double its screen count in 2008, and Kuwait has ambitious growth plans. Regional distributors estimate the Gulf now accounts for around two-thirds of their business.
The UAE, with its construction boom and burgeoning expatriate population, dominates the region. Dodona Research forecasts that by 2010 the UAE's gross box office will be $47m (dir176m), 67% higher than in 2005.
"The cinemas are first rate, and there are no security issues. It's worth us bringing in 80 prints and doing day-and-date - Spider-Man 3 actually opened two days before the US," says Braddel.
Regionally, exhibition and distribution is dominated by Lebanese family-run businesses, although the industry is opening up. In the UAE, Australian chain CineStar has 40 screens, while developer Emaar is in talks with Singapore exhibitor Cathay to open a 22-screen megaplex in Dubai Mall, set to be the world's largest when it opens in 2008-09.
In the Gulf, advertising revenues and spend on concessions are slightly above those in the West, say exhibitors, although film hire is more expensive, at around 50% of outlay (compared with 43% in Australia, for example). While foreign exhibitors need a local partner, taxes are low to non-existent.
Aside from the two peak seasons, summer and Eid, generalising about 'the Arab world' is problematic when it comes to exhibition. North Africa is treated as a separate territory, supplied by French distributors. In Egypt, quotas limit foreign film distribution and tickets can cost as little as $0.80; the UAE serves up blockbusters in US-style cinemas to an 80% expatriate audience.
HanWay Films' head of sales Thorsten Schumacher, who works with dynamic indie distributor Frontrow Entertainment in the region, says "the future looks bright, with growing audiences and more multiplexes", but hopes for broader growth, beyond blockbusters, as the population rises.
In the male-dominated Gulf, horror, action and adventure rule the top 10, and the censors can be strict. Schumacher, who saw Goya's Ghosts banned in Kuwait, identifies censorship as an issue blighting the otherwise "very fast growing" Gulf market.
The industry is keeping its eye on embryonic exhibition markets, and the potential for VoD. Egyptian distributor-exhibitor Antoine Zeind is looking at Libya, while film analyst Alaa Karkouti predicts Jordan will rise in importance, given the support of its Royal Film Commission.
Saudi Arabia, yet to allow permanent cinemas for its 27 million-strong, wealthy and youthful population, remains the million-dollar question.
DIGITAL DELAYED BUT COMING SOON
Middle Eastern exhibitors and distributors have, up to now, said that digital cinema would take its time in the region, given the difficulties with subtitling and censorship. But Kuwait, ironically the strictest censor in the region, could be the first to make the leap.
Exhibitor/distributor the Kuwait National Cinema Company (Kncc), which also has a stake in Dubai-based distributor Frontrow Entertainment, has already converted one cinema, equipped with Italian and German hardware, as a showcase.
The Kncc's Hisham Al Ghanim has signed a memo of understanding with Senthil Kuma, chairman of Indian digital specialist Real Image (Qube Cinema). "We're waiting for the majors to decide how it will work," says Al Ghanim, "but we're confident we can begin phasing in digital from 2008."
"Kuwait is the sleeping giant of the Arab world," says Hisham Al Ghanim, of the Kuwait National Cinema Company (Kncc), which opened its first cinema in 1968. Admissions in the Gulf state, identified by Sony's Mark Braddel as the next growth spot, are up 30% since 2004 and Kuwait now commands 35% of the market share for foreign films, second to the UAE.
But the business faces obstacles. Ironically, Kuwait's democratic parliament has the region's most conservative theatrical censors.
"Ninety per cent of audience complaints are about censorship, and it's the main factor driving the piracy business," says Al Ghanim, whose company is the leading distributor and only exhibitor.
On the flipside, Kuwait's lack of nightclubs and other entertainment makes cinema-going attractive. Just 35 Hindi, Arabic and English-language films were released in 2006, and distributors note that the margins are higher than in the rest of the Gulf.
The industry collapsed during the Gulf War at the beginning of the 1990s, but has since grown dramatically. The Kncc has ambitious plans, opening the 11-screen Avenues in October and a 15-screener (with Imax) in 2008, plus a further 17 screens in 2009. "We have a small population but strong buying power," says Al Ghanim, who also intends to expand into Bahrain, Qatar and the UAE.
Population: 3.5 million
Cinemas: 12 sites, with 39 screens
Annual box office: $17.7m (k$5m)
Biggest exhibitor: Kuwait National Cinema Company
Lebanese distributors and exhibitors, who dominate the industry across the region, are determined to carry on investing in their home country, despite its political and economic problems.
"The moment it stabilises, business will pick up," says Salim Ramia, whose Gulf Film took over management of the ABC Cinema in July.
Still, admissions dropped by 500,000 between 2002 and 2006, says Mario Jr Haddad of Circuit Empire, which has a 68% share of Lebanon's exhibition sector, and plans to expand in the Levant and Gulf (Circuit Planete is the other major player in Lebanon; foreign exhibitors are yet to invest).
This year is showing some signs of improvement, and local hit and Cannes favourite Caramel had garnered 65,000 admissions in its first three weeks in August. As ever, further growth depends on political stability: two multiplexes planned for the rebuilt Solidere area of Beirut are on hold.
Certainly Lebanon holds the most promise for arthouse, French and other foreign-language films, and has a strong track record with drama and romance. "In Lebanon, it's women who are the decision makers when it comes to films," says Haddad.
Population: 3.9 million
Cinemas: 23 sites, with 110 screens
Annual box office: $10.5m
Biggest exhibitor: Circuit Empire
UNITED ARAB EMIRATES
In a 2006 report, Dodona Research estimated that admissions in the UAE will increase above screen count. By 2010, the UAE will have 200 screens, admitting 7.5 million cinema-goers, up from just 30 in 1995.
Gulf Film's managing partners Salim Ramia and Ahmad Golchin, which distributes Universal, Paramount and DreamWorks product, and have a 90% share of the independents' market, estimate that the UAE now accounts for around 63% of its business.
Gulf Film's exhibition arm Grand Cinemas opens a 12-screen multiplex at Festival City mall in December. In 2008-09, a 22-screen megaplex should open in Dubai Mall, the world's largest, likely to be managed by Singapore chain Cathay. "We need more independent exhibitors, and this should open up some space," says Karim Dernaika, of Empire International (which distributes product from Twentieth Century Fox and Sony).
"This is a unique, flexible market, where Hindi, Arabic and English movies compete in a tight time-frame, with no minimum time guarantees for films," says Cameron Mitchell of CineStar, which has multiplexes in two of the busiest malls (which has 50 million visits a year).
Concession spending ($2.40 per person, according to Dodona), advertising revenue ($6.5m in receipts), and ticket prices ($8) are relatively high.
There has been consolidation and some closures, including 1960s-era Indian cinemas, although Phars Films' Mahi Golchin says the market for big-budget Bollywood titles continues to grow: around 100 Hindi films are distributed annually.
While the DVD charts, growth in film clubs and the success of the Dubai International Film Festival indicate an appetite for arthouse, the multiplexes remain resolutely commercial. Frontrow's Gianluca Chacra says the rapid turnover of films limits word-of-mouth marketing.
Population: 4.1 million
Cinemas: 28 sites, 180 screens
Annual box office: $49m (dhs182m)
Biggest exhibitor: Grand Cinemas
The Arab world's production powerhouse, Egypt is the only territory where homegrown films dominate the box office. Foreign films - invariably Hollywood blockbusters - are kept in check by quotas (allowing only eight prints per film) and a 20% tax on receipts - compared with just 5% for local films.
Box-office receipts grow year on year, but foreign films still account for only a fifth of revenues. Ticket prices vary from $0.80-$4.50 (egp5-25), depending on the location and timing of the screening.
The monopolies that exist elsewhere are more pronounced in Cairo, where the biggest exhibitors - Isaad Younis' Arabia, and the partnership between Wael Abdalla's Oscar, Mohamed Hassan Ramzy's Al Nasr and Hisham Abdel-Khalek's Al Massa - are also producers and distributors. In the past year, disputes have led to some cinema chains exclusively promoting their own fare. Exhibitors are attempting to address Egypt's lack of screens, and new cinemas are being built in malls.
Good News Group, producer of international hit The Yacoubian Building, has ambitious plans to develop its chain of cinemas from 45 to 200 screens over the next few years, says managing director Adel Adeeb, who is also attempting to diversify, holding weekly screenings of French and Hindi films.
Leading distributor United Motion Pictures, which handles product from Warner Bros and Twentieth Century Fox, conducts 90% of its business in Cairo and Alexandria. The largest multiplex, Saudi-owned City Stars, adds a further eight screens (totalling 21) in October.
"It would be good if the quotas were relaxed, but our main concern is securing the most important screens," says managing director Antoine Zeind.
Some industry figures, such as Production City's Youssef Cherif Rizkallah, argue quotas are adequate, given the lack of regional multiplexes and competition for release dates.
Population: 75 million
Cinemas: 175 sites, 300 screens
Annual box office: $44m (egp250m)
Biggest exhibitor: Arabia.