Cashing in at the movies

It has been quite a year for the movie industry in the Middle East. By all rights, 2003 should have been one of its worst ever.

The Middle East economy reached its lowest point in two decades, the Palestinian crisis escalated, and instability or extremism threatened several countries. To top it all, the threat - and then the reality - of war loomed large over the region for months on end.

One would assume, then, that the regional movie industry should be counting the days until the end of the year. Not quite the case, say local insiders. For Karim Dernaika, managing director of Empire International, a leading distributor, 2003 is turning out to be one of the best years in recent times.

'We opened the year with a big bang,' he says. 'The James Bond film, Die Another Day, created a new record in the United Arab Emirates. It has become the largest grosser after Titanic, with over 144,000 admissions in the UAE alone.'

The Bond film was launched on 21 screens and ran for a full eight weeks in the rather small UAE market. But that was not the only big hit of the year for Dernaika and other industry players. Matrix Reloaded, 2 Fast 2 Furious, Gladiator - the list of big hits in the past 12 months seems endless.

The summer was even better, with a string of successes. Terminator 3 was the most awaited film of the year, and the initial response seems to have justified its top billing. Other big films of the summer were The Hulk, Tomb Raider II, Charlie's Angels: Full Throttle and Bad Boyz II.
Nothing - not the economy, not even the war in Iraq - was enough to keep Middle East residents from going to the movies. Salim Ramia of Gulf Films, one of the largest distributors of Hollywood films in the region, says that the war kept people away from theaters for only two weeks. '

For the first two weeks of March, we had rather low attendance,' says Ramia. 'But since then, business has bounced back and now it is even booming. Matrix Reloaded had the biggest opening in the history of UAE cinema. It recorded 79,000 admissions in the first week alone.'

One of the main reasons behind the string of box office smashes is the rapidly closing gap between the time a film is released in the United States and the time it arrives in the Middle East. Until recently, films were released in the Middle East at least four or five months after they had hit screens in the United States; at times, the gap was over a year.

This prompted many movie fans to watch the films on DVD or during their travels overseas. Now, films are hitting Middle East screens faster than ever before. Almost all of this year's blockbusters were released in the Middle East on either the same day or at least in the same week as they were released in the United States. X-Men II came out in the Middle East three days before it hit US screens.

The early release of films has definitely got more Arab moviegoers into the theaters. But that in itself has not been enough to fill all the seats in the hugely oversupplied markets of the Middle East, especially the UAE, which has seen a boom in construction of plush new multiplexes in the last five years.

Cinema exhibitors need much more in order to recover their investments.
They are looking hard at innovative techniques to attract moviegoers. One way out is through aggressive marketing and promotional activities. Until recently, one of the main complaints of Middle East theater owners was the total lack of promotion in the region.

'In the West,' said one exhibitor, 'each big release is accompanied by a huge marketing promotion and advertising campaign, which helps attract viewers. But here the distributors never undertake any such activities.' This is changing rapidly, however.

The last few months have seen extremely proactive marketing and advertising campaigns for several big films. One new trend in the Middle East is for corporate sponsorship of films. Distributors and exhibitors seek out multinationals to sponsor the premieres of big films or the contests tied to their release.

More and more companies are tying up with producers of films for product-related sponsorship. In such deals, called product placement, companies pay for their products to be shown during the film. For instance, in Matrix Reloaded, the characters use Samsung mobile phones, and drive Cadillacs and Audis.

Similarly, Ford paid a hefty sum for James Bond to drive the company's new Aston Martin in Die Another Day. While these tie-ins don't bring any direct benefits for exhibitors around the world, they do provide platforms for them to exploit films regionally. For instance, Gulf Films, the distributor of Matrix Reloaded in the Middle East, organized several events related to the release of the film with Samsung, Cadillac and Audi.

'We have pushed very hard to get corporate sponsors to become associated with theatrical releases,' says Dernaika of Empire International. 'In this region, major companies and even distributors need to gain a greater understanding of the marketing opportunities offered by the movie industry.'

Ramia of Gulf Films says that the companies that participate in product tie-ins are often also keen to participate in off-screen promotions, like premieres and viewer competitions. 'Big companies today are very keen on premieres. But it is not only through corporate sponsors that we promote our films.

We also spend almost 10 percent of our returns in promoting them,' he says. These words are music to the ears of Robin Harbhujan, director of Ster Century, a large South African company that has set up several multiplexes around the world, including some in the region.

Harbhujan knows more than any other player that for seats to be filled, the movie industry has to compete with a large variety of alternative activities, including leisure and shopping.
'The marketing promotion and related events are crucial for the success of a film today,' says Harbhujan, who is extremely pleased with the recent trend of events being organized around the films.

'Even the big hits need this kind of promotion and for the smaller films, good promotion can make all the difference between a flop and a moderate hit.' His own multiplex organized a competition, along with French telecom equipment maker Alcatel, during the screening of Phone Booth in June.

While competitions for free tickets or other gifts are now becoming the norm, the biggest event around the films remains the premiere. These shows, says Harbhujan, can often make or break a film since the first week is crucial for returns, and few films go beyond the third week. That is exactly where the advertising campaigns come in.

Most films are now being advertised regionally - either in the local press or on television in a bid to create excitement about the film among the
public.

For cinema exhibitors, conditions have certainly improved in the last few months, but they are not out of the woods yet. One of their biggest headaches continues to thrive around the region: piracy. Though piracy has traditionally been common in the Arab world, it has exploded over the last few months.

Southeast Asian gangs seem to have taken firm control of the multibillion-dollar business, and pirated CDs and DVDs of the very latest Hollywood attractions are often easily available all over the Middle East, weeks before the films have even been released in the United States.

The pirates have become so bold and aggressive that groups of Southeast Asians carrying bags of pirated CDs and DVDs from office to office is now a common sight in Dubai and other parts of the region. These groups are equally active in the heart of Dubai Internet City and Dubai Media City - two areas that one would expect to be strongly anti-piracy due to the very nature of businesses there.

Piracy is clearly one of the greatest challenges for the movie industry, especially for the exhibitors, who estimate that they lose at least one in three viewers to it. Although regional governments have introduced anti-piracy legislation, enforcement is difficult, so gangs feel free to sell pirated goods openly and without any fear of prosecution.

If governments don't do more to tackle piracy, there will be no happy ending for the exhibitors who have invested hundreds of millions of dollars in building luxurious, ultra-modern cineplexes.