Saudis Go Hollywood

 The Saudis are betting big on the entertainment industry, plowing billions into Hollywood studios and other entertainment endeavors. In Riyadh, the capital of Saudi Arabia, movies are a must for entertainment. They screen film well into the night (until 1 -2am) and pull in a mixed demographic.

 

Saudis flock to the cinema during Ramadan

Eight years ago, there were no cinemas in Saudi Arabia. Now, there are many multiplexes, film festivals (the biggest being the annual Red Sea International Film Festival), and esports arenas. Even during their current war with Iran, people are flocking to the movies as cinemas have remained open during the conflict.

The cultural change is due to Crown Prince Mohanned bin Salman (known as MBS to his friends), who is spending billions in overseas entertainment production and distribution. Including a $24 billion investment into the Paramount takeover of Warner Bros., about 25% of the whole merger cost. 

Although there is a lot of handwringing by some folks in Hollywood and Washington, I believe the Saudi investment will be passive - it's looking for long-term returns, and the entertainment industry, on a global basis, fulfills that requirement and sends a message to the world that the Kingdom is rebranding itself. 

Hollywood is currently hungry for cash, so the Saudi investments are welcomed and override any morality issues - and it's working. This past September, the inaugural Riyadh Comedy Festival took place. It featured Kevin Hart, Ball Barr, Dave Chappelle, and Pete Davidson. In December, the Kingdom hosted the Soundstorm Music Festival, which featured Cardi B, Post Malone, and Pitbull.

MBS's long-term strategy is to move the Saudi economy away from oil and into technology (the build-out of large AI data centers), tourism, and the media. 

In Saudi Arabia, there is no political participation by the populace, so entertainment provides an outlet for the Saudis, where 60% of the population is under 35.

Depp and Smith at the Red Sea Film Festival

IMO, the Saudis are making good, long-term investments in media. Entertainment is the one industry that has universal growth that crosses all economic and social sectors. The Saudis, through MBS, have a strategy, and it appears to be working.