When you think of venues which are known for designer decor, food from celebrity chefs and stylish furniture, movie theaters don’t spring to mind. They do in the Middle East.
Lobbies of many of the theaters in the region look more like the reception areas of five star hotels and it has had a blockbuster impact. Thanks to investment in infrastructure and a climate which favours indoor entertainment, theaters in the Middle East have been booming since the pandemic receded but the biggest operator isn’t resting on its laurels.
Few industries have been under as much pressure in recent years as theater exhibition and this isn’t just because of the pandemic. It began with the advent of streaming which threatened exhibitors like never before. Not only does streaming enable subscribers to watch an entire library of movies whenever they want and as often as they want, it costs far less than buying multiple theater tickets.
Streaming platforms raced into the lead when the world went into lockdown and the curtain temporarily came down on theaters. People who were previously theater-goers were stuck indoors craving new content and became hooked on streaming services.
Ironically, when the doors to theaters finally swung open again the competition with streamers intensified. In the immediate aftermath of the pandemic many people were put off by the prospect of sitting in a crowded indoor space for hours whilst a deadly disease was raging so studios doubled down on streaming. Their latest movies were released simultaneously on their own streaming platforms and in theaters. Furthermore, movies which were originally destined for the big screen were switched to streaming platforms and subscriber numbers surged.
Then many countries were hit with a cost of living crisis fueled by the war in Ukraine and tax rises to cover the benefits paid out during the pandemic. It pulled purse strings even tighter putting further pressure on theater admissions. This explains why data from Gower Street Analytics shows that the 2024 global box office of $30.5 billion was more than 25% lower than the tally in each of the three pre-pandemic years which have yet to be surpassed since theaters re-opened after lockdown.
The woes of exhibitors in the west have been compounded by chronic under-investment. Food usually comes in the form of overpriced candies and soft drinks. Their lobbies are dark and dingy places for passing through not somewhere people go to meet their friends and hang out as they did when multiplexes rose to popularity in the 1980s and 1990s.
Adults who grew up with theaters clearly still have a soft spot for them which is why movies like Deadpool & Wolverine still shine. Likewise, theaters are a relatively cheap way of keeping young children occupied which explains why Inside Out 2 was the highest-grossing movie of 2024.
Although streaming platforms no longer benefit from simultaneous releases with theaters, major new movies still appear on them only a few months after they debut on the big screen. It has a psychological effect as Neil Macker, a senior equity analyst for Morningstar Research Services, told Variety. “People have become conditioned to expect that things will quickly appear,” on streaming platforms he said.
These factors have contributed to theaters falling out of favor with many of today’s youth, especially the Gen Z who were teens during the pandemic and grew up watching movies and shows on their phones. Testimony to this, Phil Clapp, chief executive of the United Kingdom Cinema Association, told trade title Screen Daily in August that “you see far fewer 10, 12 or 14-screen cinemas opening now [in the U.K.].” He added that “certainly in the medium term, we are going to see a rationalisation of the number of cinemas.” It’s a very different story in the Middle East.
Temperatures in the Gulf region soar north of 100 in summer during the day and night whilst they can rise into the mid-80s in winter. As a result, indoor entertainment has proliferated and theaters in the region are usually in a prime position.
They tend to be located inside malls which are more like entertainment destinations than shopping centers as they are often home to theme parks, museums, galleries and sports facilities.
Malls in the Middle East, such as Dubai’s Mall of the Emirates, are thriving (Photo by Dan … [+]
With so much entertainment on hand it’s possible to spend a day in many of the malls which avoids needing to step outside into the heat. A visit to the theater in the evening is a natural way to end the day so it has become a crucial part of local culture, especially as bars and nightclubs are not as common as they are in the west due to alcohol restrictions.
Malls are so integral to society in the Middle East that countries in the region couldn’t risk Covid-19 spreading in these indoor environments. So, unlike many western nations, they introduced strict prevention measures and this had a magic touch. Malls in major Middle Eastern cities were bustling again within a year of the start of the pandemic. It meant that theaters in the region had less down time than elsewhere which helped them to weather the storm.
In the midst of the pandemic a report from Omdia, a consultancy firm owned by research giants Informa, revealed that the Middle East was the world’s fastest-growing cinema market over the four years to 2021. It didn’t stop there as Omdia reported in November last year that it expected the region to generate $900 million of revenue in 2024, a 21.1% increase on 2019. What’s more, it added that this growth is set to continue with its annual revenue expected to hit $1.5 billion by 2029.
The Middle East isn’t just bucking the global trend in terms of box office revenue but also screen growth.
The decline in traffic to theaters has put chains in the west jeopardy and in July 2022, Europe’s biggest privately-owned exhibitor, Vue, was taken over by its lenders. Two months later the the American arm of Cineworld, the world’s second-largest theater chain, went into Chapter 11 bankruptcy protection and although it has since emerged from this, its U.K. operation is still struggling. Five of its theaters shut their doors in October and a further seven closures have been announced since then.
In stark contrast, the number of screens in the Middle East isn’t just increasing, its growth is outperforming the rest of the world. According to Maria Rua Aguete, Omdia’s senior research director of media and entertainment, around 1,000 screens have been added since 2019 bringing the total in the region to nearly 2,500 by the end of last year. This explosive growth isn’t just down to the sweltering weather and a successful strategy for dealing with the pandemic.
The third part of the region’s magic formula is investment and one theater operator has got this down to a fine art.
In the west, theater operators tend to be either behemoths or boutique and attempts by the former to take on the latter have little impact. Odeon, the largest theater chain in the U.K., operates Luxe-branded venues which have fully reclining seats, state-of-the-art projection and sound as well as bar and café facilities. However, they haven’t eased the woes of Odeon’s parent, AMC Theatres. In 2024 it announced plans to defer debt repayments of more than $1.6 billion over several years and saw a 12% decline in attendance during the third quarter.
Over in the Middle East, the biggest theater chain is VOX Cinemas, which has more than 600 screens. It is also the highest-grossing exhibitor in the region and in 2023, the latest complete year for which results are available, its admissions increased 6% to 20 million.
VOX Cinemas is owned by the entertainment division of Majid Al Futtaim, a diversified lifestyle conglomerate which also distributes movies and operates malls along with indoor snow parks, hotels, stores and residential communities as this report explained. In 2023, Majid Al Futtaim Entertainment generated $52.5 million (AED193 million) of underlying profit on $490 million (AED1.8 billion) of revenue and its bottom line was bolstered by upscale theaters.
“Generally, we see the best returns from our premium formats,” says Ignace Lahoud, chief executive of Majid Al Futtaim Entertainment. Lahoud is a veteran of the entertainment industry who spent 27 years in different divisions of Disney including a stint as chief financial officer of Disneyland Paris where he presided over one of the greatest periods of growth for the theme park resort. He rose up to become executive vice president and chief financial officer of Disney Consumer Products & Interactive Media before joining Majid Al Futtaim in 2021. There is nothing Mickey Mouse about its theaters.
Their gleaming airy lobbies don’t just have a range of eateries, they have restaurants which attract visitors for dinner. It’s no exaggeration as back in 2021 VOX partnered with Japanese-Korean Michelin-starred chef Akira Back who created dishes for its restaurants. Gone are the days of soda and candy being the only options for movie-goers with a sweet tooth. The VOX multiplex in Dubai’s Mall of the Emirates has a Nutella bar where freshly-made crepes, pancakes and waffles are on offer.
Even the entrances to the VOX auditoriums are opulent as some are surrounded by LED screens playing scenes from films to give guests the impression that they are stepping into them. That’s just the start.
VOX was the first operator in the region to introduce laser projection to its super-sized IMAX screens. It now has its own VOX MAX big screen format and holds the exclusive Middle East rights to 4DX cinemas which feature moving seats, smoke, wind and water effects. These developments set the stage for what was perhaps the most groundbreaking development in the theater sector last year. Majid Al Futtaim had to use every trick in its spell book to get it to the opening night.
Called THEATRE, it is a 36-seat theater in the Mall of the Emirates multiplex which offers visitors a gourmet meal served during the movie at plush leather seats designed bespoke for VOX. They are larger and more luxurious than ones in most first class airline cabins and are packed with high-tech wizardry.
THEATRE offers visitors a combined cinematic and culinary experience
A control panel adjusts the pitch of the headrest and the heated seat which almost fully reclines. It also controls the level of lighting on a table which retracts from the armrest where there is a wireless phone charger. The seats even have a built-in drawer with a blanket inside in case viewers’ legs get cold.
The seating configurations come in single, double or groups of four and each one has a privacy screen hidden in the armrest to minimize disturbance and optimize the viewing experience. Like the seats, the audio and visuals are at the top of their game thanks to Dolby Atmos sound and 4K laser projectors.
Majid Al Futtaim seems to have thought of everything. To minimize disruption during the movie, guests can order their food at the touch of a button so they don’t have to leave their seats. The waiters wear dark uniforms so as not to distract and they don’t have to squeeze between the seats as the control panel can make them move backwards and the aisles are extra wide.
The menu wouldn’t look out of place in a fine dining restaurant. The appetizers include grilled chicken satay skewers, crispy calamari with truffle aioli, and a Caesar salad. One of the main courses is a sirloin steak sandwich with pesto sauce, Parmesan cheese, rocket leaves and ciabatta bread, whilst another is alfredo pasta. They are followed by sticky toffee pudding with caramel sauce and vanilla ice cream.
The photos in the menu show there are no paper plates as each course comes with actual crockery and cutlery whilst the mocktails are served in glasses. The only downside is that the quality of the food could distract from the film and the darkness of the auditorium will make it tough to take photos of the exquisite dishes.
As theater tickets go it isn’t cheap. Prices depend on how much food is ordered and start at $50 (AED185) for nachos, one course and a drink. However, this compares favorably with a fine dining meal so essentially the movie comes at no cost. By tempting customers with a movie to make money on food and beverage Majid Al Futtaim has built on a concept which dates back to the dawn of cinema as shown in a 1952 memo between Warner Bros. co-founders Harry and Jack Warner.
Referring to recent discussion with the actor Gary Cooper, Harry wrote “the other day I was telling Gary Cooper and the boys that our theatres make approximately two and a half million dollars annually but that our concessions make two and three-quarter million dollars a year. Gary Cooper came up with a fine idea which I heartily endorse and pass on to you. He suggested that we have our actors eat popcorn, peanuts, and candy bars at least once in every reel in all the pictures we make from now on, so that by the power of suggestion our concession sales would mount even higher. I think this is a great idea.”
Back then, movies were still a relatively new phenomenon whereas now they can be seen at home and on screens in your pocket. Successful theater operators like Majid Al Futtaim have recognized that in order to compete they have to offer something which customers can’t get elsewhere. “Customers are increasingly seeking these elevated experiences that create the sense of an event when visiting the cinema and provide an experience that can’t be replicated at home,” says Lahoud. It starts before they even enter the auditorium.
What makes THEATRE so groundbreaking isn’t actually the food, the seat or the screen but a lounge which guests can visit before and after the movie. Drawing on the themed entertainment expertise he gained at Disney, Lahoud has created a space which looks nothing like somewhere you would usually find in a theater.
It is inspired by commissaries from the golden age of cinema which were restaurants on studio lots where actors and producers would hold court over lunch. In classic Art Deco style, the purple wallpaper of the THEATRE lounge is covered with geometric shapes and its furnishings have a blue and gold color scheme. Old-fashioned Klieg spotlights stand in corners whilst clapperboards and other curios of cinematography sit on the wooden shelves next to the plush cream-colored sofas, shuffleboard games and billiards tables.
THEATRE’s lounge evokes the Golden Age of cinema
Some of the hints of its Hollywood inspiration are more obvious. Iconic movie memorabilia, such as Iron Man’s helmet and a Stormtrooper helmet from Star Wars, also stand on the shelves. Movie posters appear to hang on the walls but are actually pin-sharp screens cleverly covered with a matte sheen which makes them look like paper and enables them to show images from clients if they rent out the room.
Silhouettes of Hollywood stars have been drawn on walls by local artists adding to its appeal to the Instagram generation. “THEATRE is primarily targeted at discerning moviegoers who opt for a premium experience in every aspect of their lives,” says Lahoud. “They expect a level of personalization and exclusivity, where attention to detail, service levels and quality of the experience really matters. We are also attracting novelty hunters who are chasing the latest trend to feel they are ‘in the know’. These audience members want something that’s genuinely new and feels exciting. They like to be the first ones to the enjoy the experiences so they can gain social currency.”
He adds that “we didn’t want this to be just a lounge you go to before a movie, we wanted this to feel like home, a place where you are comfortable and you come to chat. A place where you can dine and have mocktails, if you want to play you can play and if you want to sit down after the movie you can hang out. So, to us, this is part of what the future of cinema is about. It is about creating social hubs right where you have a cinema as well and making you feel at home.”
It has cast a powerful spell as shown by a considerable spike in VOX Cinema’s Net Promoter Score (NPS) – a universally recognized metric to gauge how customers rate brands based on how likely they are to recommend them.
THEATRE uses movie props to deliver a themed experience
“The recent refurbishment of THEATRE at Mall of Emirates has elevated the guest experience, delivering a more immersive and luxurious cinema experience for our valued guests,” says Lahoud adding that “this focus on excellence has resonated strongly with guests, which is reflected in a significant +11.9 point increase in NPS.” It took more than the wave of a wand to do it.
“Every aspect of THEATRE, from the lighting to the décor, has been thoughtfully considered to create an unparallelled experience for our guests,” explains Lahoud. The venue took more than two years to develop and was the fruit of multiple iterations from interior design architects. VOX eventually settled on seats from Malaysia-based Ferco Seating Systems which is one of the most well-established manufacturers in the industry having been established back in 1983.
The attention to detail shows that upscale theaters are not an afterthought for Majid Al Futtaim or an excuse to charge a higher ticket price as appears to be the case with some western operators. There is good reason for its investment in this area.
“While films have long been the cornerstone of the cinema industry, the cinema industry is becoming increasingly unpredictable,” says Lahoud. “So it is imperative that we do not become overly reliant on the movie line-up. Instead, we must proactively seek avenues to diversify and strengthen our offering. At VOX Cinemas, we provide more than just a place to watch movies. We offer a place where audiences can come together for a collective experience and a shared connection whilst immersing themselves in the magic of storytelling.”
THEATRE fits into a category known as Premium Large Format (PLF) which also includes IMAX, 4DX and ScreenX, with its screens on the walls on either side of the seats. THEATRE is now available at seven Majid Al Futtaim theaters across Dubai and nearby Abu Dhabi but Majid Al Futtaim also operates a GOLD tier below it to cater for customers who want to pay less.
GOLD also offers food delivered directly to the seats which are lavish, even in the lowest category. Last year all four auditoriums at VOX Mall of the Emirates were renovated and the chain’s standard product was upgraded to premier offering guests the choice of gliders or reclining seats as well as state-of-the-art laser projectors.
It was followed by a full renovation of Majid Al Futtaim’s 18-Screen Multiplex at Dubai Festival City Mall which now has reclining leather seats with blankets, and pillows. There’s also an IMAX theater and GOLD service offering dishes like truffle chicken, Tuscan sirloin steak and Basque cheesecake. More is on the way.
VOX’s Dubai Festival City Mall location was recently renovated
“As part of our ongoing enhancements at VOX Cinemas Mall of the Emirates, we will be unveiling a newly imagined IMAX in April,” reveals Lahoud. “Designed with innovation, comfort and immersion in mind, we believe it will stand amongst the best cinemas in the world.”
Alongside these theaters Majid Al Futtaim also operates other pop-up venues which are even more quirky.
Its Snow Cinema sits inside one of its indoor snow parks making it the perfect setting for festive films like Frozen. In contrast, the open-air VOX Moonlight single-screen cinema is erected on the rooftop of a Dubai mall at night in the cooler winter months. Prices start at just $15 (AED55) for seats which come in the form of beanbags and private cabanas. They are surrounded by foliage giving it a garden feel against the backdrop of Dubai’s futuristic skyline.
Farther afield, VOX also operates the Renaissance Theatres in Riyadh which are themed to different genres of film including space, business and Art Deco with its golden wall signs and seats inspired by carriages on the Orient Express. The more unusual the experience, the harder it is for customers to get it at home and the greater the need for them to visit the theater.
Western operators are only just starting to catch on to the need to renovate. In September last year the eight biggest theater chains in the U.S. and Canada announced that they plan to invest more than $2.2 billion to modernize and upgrade more than 21,000 screens over the next three years. “This investment of resources is the next step in our industry’s ongoing commitment to ensuring that going to the theater remains a unique and special experience for generations to come,” said Bob Bagby, executive board chair of the National Association of Theater Owners.
Similarly, one of the few bright lights of the U.K. theater sector is Everyman Media Group which gives customers a luxurious experience in intimate city center locations. It is clearly what customers want as the chain announced in late July that admissions had surged 20% year-on-year and revenues were up by 23% in the first half of 2024 — a period other operators openly called “horrific”.
“People are prepared to pay for a premium-service experience,” says Mike Thomson, partner at leisure consultancy The Big Picture. “They are no longer prepared to pay for something where they are just processed and there is no atmosphere. A lot of those out-of-town boxes fall into that category [In the U.K.].”
It echoes comments from Andrew Cripps, former Warner Bros. President of International Theatrical Distribution. At the 2023 CineEurope exhibition conference in Barcelona he described PLFs as a “critically important part of the economic equation.
“We produce a lot of movies that are very conducive to premium formats, we produce a lot of big screen, big event movies. And it’s no coincidence in my mind that they’re more expensive, but they sell out faster. If you look at consumers buying advance tickets, they tend to buy, whether it’s IMAX, Screen X, 4DX, whatever the premium format is, they tend to buy those tickets first. Consumers want an experience and I think we have to continue to provide a differentiator from the home experience.”
As Variety reported, there is data to back this up. For example, Sony’s Spider-Man: Across the Spider-Verse animated comic book adventure opened in June 2023 to a mighty $120 million from 4,313 North American locations, and averaged $19,736 per location on standard 2D screens. However, it brought in an average of $25,159 per location on PLF screens and $34,214 per location on Imax screens. That trend is set to continue, especially in the Middle East where the PLF market is even more mature than in the west, thanks to VOX.
“Looking ahead to the next decade, several trends are likely to shape the future of the landscape of the Middle East movie market,” says Lahoud. “We expect the market to continue its growth trajectory, driven by factors such as population growth, rising disposable incomes and ongoing investments in infrastructure.”
He adds that “guests increasingly come to the cinema to experience an event. They want to come together to connect, laugh, escape the stresses of life and enjoy a shared experience. This is a trend we see continuing and, we are continuously exploring new avenues through which we can utilize our spaces.
“We also anticipate that the appetite for high-quality cinematic experiences such as THEATRE is a trend that is likely to continue in the coming years. At VOX Cinemas, we understand that embracing this trend requires ongoing innovation and adaptation. As such, we will continue to explore new technologies and strategies to elevate the cinema-going experience for our patrons.” That really is a happy ending.
This post was originally published on here
