iPic Entertainment’s upscale brand of moviegoing is headed to Saudi Arabia.
The luxury cinema chain has taken a major step toward tapping the country’s untouched film market, three months after the desert kingdom legalized movie theaters for the first time in 35 years.
iPic, which operates 15 high-end dine-in theaters in the U.S., told The Times on Wednesday that it has partnered with Saudi firm BAS Global Investments Co. to develop cinemas and restaurants throughout the country.
iPic, led by chief executive and founder Hamid Hashemi, said the Boca Raton, Fla., company could open as many as 30 licensed theaters in the next 10 years. The new theaters in Saudi Arabia would be the first international locations for iPic, which operates theaters with 115 screens in states including California, New York and Arizona.
With a population of more than 30 million people who previously haven’t had access to cinemas, Saudi Arabia represents an attractive market for theater owners. The nation is eventually projected to represent about $1 billion in annual ticket sales, Hashemi said. Two-thirds of Saudi Arabia’s population is under 30 years old, a prime demographic for theater circuits.
“This is an opportunity that won’t repeat itself,” Hashemi said. “There is not a single screen in existence today.”
The nation announced in December that it would end its three-decade prohibition against movie theaters as part of a larger push toward modernization by the conservative kingdom’s reform-focused leader. Crown Prince Mohammed bin Salman’s so-called Vision 2030 is billed as a strategy to open the country’s economy and relax social strictures on its youthful populace. Authorities have also announced measures to allow women to drive, permit concerts and rein in the religious police.
The first Saudi multiplexes were expected to open this month, the Ministry of Culture and Information said when the ban was lifted. iPic’s first theaters in Saudi Arabia are expected to open in the next 18 months.
American exhibitors hailed the announcement, which could unlock a potential growth area for an industry that has seen shrinking attendance in the U.S. and Canada. AMC Entertainment, the Leawood, Kan., company that is the world’s largest theater operator, said in December it had signed an agreement with the Public Investment Fund of Saudi Arabia to explore opportunities in the kingdom.
But the news also raised questions about the kinds of restrictions and censorship the kingdom is likely to impose on films. Sex and nudity will almost certainly be barred, for example.
Founded in 2010, iPic has carved out a niche in the domestic cinema market, offering intimate auditoriums, cushy recliners, restaurant-style food and in-theater waiter service. In February, iPic became a publicly traded company on the Nasdaq stock exchange, after a $15-million initial public offering.
iPic is growing but losing money. According to the most recent available regulatory filings, iPic’s revenue was $69.4 million in the first six months of 2017, up 25% from the same period in 2016. However, its net loss widened to $22.4 million, compared with a loss of $13.7 million in the first half of 2016.
iPic’s shares fell 55 cents, or 4.2%, to $12.64 on Wednesday.