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Abdulhamid Juma Opening the Variety Arabia Film Summit 2012

Wed Apr 18,2012

Good Morning Ladies and Gentlemen.

First of all, thank you to Variety Arabia for organizing this first ever Arab Film Summit, and thank you for inviting all of us to participate in it. This summit couldn’t have come at a better time.

This morning in my keynote address I want to provoke us all to think, by presenting more questions than answers, which I hope will stimulate working and sustainable solutions for the region.

I would like to address the shift in industry trends, brought about by the different ways societies are consuming content. As the industry realigns itself, I would like to raise more questions, as to where we in the Arab world fit in.


IS HOLLYWOOD STILL THE CENTRE OF THE UNIVERSE?
Hollywood. Is it still the center of gravity for the film industry? Or has the momentum shifted to the local markets?

I don't think Hollywood's going anywhere. In fact, it's coming soon to a cinema near you.

Last weekend, the 3D release of Titanic recorded the best box office opening ever in China, claiming US$58 million for international distributor Fox. Top 10 Box Office lists in almost every international market reveal a Hollywood domination. China's 2011 Top Ten list features 6 Hollywood films. And this is a market that limits the number of foreign film releases each year. Even the French box office, which enjoyed a record bonanza in 2011, had Hollywood films contributing to nearly 60% of its market share.

The top two films of 2011 made around 80% of their box office outside America. Even for the global media, a press conference with Tom Cruise on the 124th Floor of the Burj Khalifa is much more of an event than one in LA.

In 2011, global box office receipts were US$32.6 billion.

International box office is up by 7% and that's a 35% increase in five years. In the US/Canada, box office and admissions were both down by 4%.
It's been a tough year for the studios and there is considerable concern, perhaps even paranoia in LA over the future of film - franchises are coming to an end, the star system is still underperforming and the future of financing remains uncertain. In this seemingly gloomy scenario, the international box office offers a ray of hope. Paramount became the first studio to break the US$3 billion mark in international ticket sales thanks to Transformers 3, MIGP, Kung Fu Panda 2, Thor, Puss in Boots and others.

If anything, I think we can reassure our friends in Hollywood that they are safe for the immediate future, as its trade shifts overseas.


TECHNOLOGY CHANGING CONSUMPTION PATTERNS
So why are box office revenues and admissions falling in the US/Canada? Is the trend in North America a sign of the future of the movie business for the rest of the world?

Technology as we all know, has changed the traditional rules of the business - the way studios are accustomed to running the show.

No matter the means - whether it's pirated DVDs, or content that can be downloaded via torrents, piracy is affecting the film industry. But is piracy a symptom or a cause?

The movie industry decides when consumers can see movies, on what media platform, and at what price. As a result, the industry is dependent on DVD sales and box office success. Should studios rethink the way they're distributing content? Think what Apple did for music with iTunes and the iPod – it gave consumers choice and invented a whole new business model.

This year online viewing in the US is expect to capture US$1.7 billion of movie revenue, compared to the US$11.1 billion predicted revenue through physical viewings. 2016 estimates state that while physical viewings will still retain 75% of the revenue, online will capture 17%. Netflix which claims to have 24 million subscribers accounts for 25% aggregated internet traffic. Online viewing is unlikely to provide the primary revenue stream to content owners, but it's a medium that cannot be ignored.

Sure, the novelty factor of 'going to the movies' remains in several emerging and developing markets, but is it just a matter of time, before it wanes? Will the movie business be affected the same way the music industry was?


EVERYONE'S LOOKING EASTWARDS
Everyone’s looking Eastwards. And no wonder. International box office receipts (US$22.4 billion) are significantly higher than US/Canada (US$10.2 billion).

Globally, the number of cinema screens are increasing by 3%, with the primary growth coming out of international markets. 3D screens growth is strong in the Asia Pacific and Latin America. According to IHS research, in 2011, China was adding an average of 8 new movie screens built each day.

Even in India, a market that has greatly challenged Hollywood, Walt Disney Co has found a way to mark its territory by taking over India's UTV Motion Pictures.

Companies - film or not - that are looking at the foreign markets are all adapting in order to expand and grow. Hermes creates a sari for its Indian clients, Hollywood's Kung Fu Panda sequel is a roaring success in China and the industry trades The Hollywood Reporter and Variety have launched Russian editions. McDonalds has clearly set an example, the rest are happy to follow.


WHERE DOES THE ARAB WORLD FIT IN?
So where does the Arab world fit in? Hollywood continues to dominate and influence the world through its content and their attention is shifting eastwards. But what does this mean for the Arab film industry? Is this an opportunity for us to actually build the industry of our dreams? Or will everyone's attention bypass the Arab world? Will they just fly by us?

The Arab world is often compared to the US. We have 300 million people. We speak the same language, although in different accents and dialects. But this comparison might not be very accurate. If anything, the Arab world has more in common with the European Union, as each Arab country has in a way its own culture and consumption patterns.

What the Arab countries DO have in common is a growing youth population. Sixty percent of our population is under 20-years. They all have similar aspirations and ambitions, but then again, they all have different daily experiences.

A child in the Emirates with access to high-speed broadband and multiplexes does not have the same choices and experiences as his counterpart in Saudi Arabia or Bahrain. Those differences vary even more as we visit Palestine or Syria and move westward to Egypt, Libya and Tunisia.

What our people ALSO have in common is access to more than 500 satellite channels and a strong TV culture as more than 75% of the region's population watches TV 7-days a week.

And of course, the impact of Western or Westernised content in our lives is undeniable. Take a look at our box offices. In the UAE and Kuwait, it's nearly 100% domination by Hollywood. It reduces to about 70% in Bahrain, 50% in the Maghreb and zero in Egypt, which of course has its own quota system to support the local industry.

On TV, our children watch America’s Got Talent along with Arabs Got Talent, which has participants singing in English, and winning. Arab Idol had 43% Saudi viewers tune in, has more than halfa million Facebook fans and 27 million views on youtube. Egyptian TV aired a 24-style thriller, Al-Mowaten X (Citizen X) and Turner operates an Arab version of Cartoon Network. Is that a strong sign that we have no confidence in our programming?

Within this context, I see tremendous opportunity for the GCC countries. Of all the regions within the Middle East, it is the most serious contender to build a thriving industry that serves local, regional and international consumers.

The GCC is best-positioned to take advantage of the shift in international industry trends and stagnation in the some of the region's industries. We benefit from pro-active governments that support us, policies that are welcoming of foreign investment and interest, open to partnerships and collaborations and most importantly retain our cultural identity while welcoming global influences.

The region is definitely ready for a new industry alongside with the leading one in Egypt.

We've had international filming interest and several high-profile shoots, but what has been the trickle-down effect of those shoots? Should we establish ourselves as a post-production centre of excellence? We're seeing more Arab TV serials temporarily relocate to the GCC for their production, but how can retain the business?

There is definitely a cinema movement throughout the region. Arab film production is on the rise. This is evident through the number of increasing submissions at our film festivals. Interest in film-making is on the rise, evident through the increase in film-related programs at educational institutions, and their reported growing enrollments.

Institutional support such as Abu Dhabi Film Commission, Dubai Film Market, Image Nation, Doha Film Institute and tadreeb are encouraging signs for the region's talent. And needless to add, the governments' investment in infrastructure - Dubai Studio City and twofour54.

The world's audiences are more curious about Arab films than ever. Within the last year, the number of specialized Arab programming at festivals such as Cannes and the Berlinale has risen. Who would have thought 13 Arab films would feature at TIFF 2011 and one - Nadine Labaki's Where Do We Go Now? would even win the Audience Prize.

But, are we making the right kind of films? Why are we making films? Is it to counter the 'bad Arab image' in Hollywood? Is to tell stories? To entertain? Or preach? If we look at popular or successful crossover Arab films such as Paradise Now, Amreeka, Caramel or Where Do We Go Now?, they all went beyond the politics of being Arab to presenting stories from Arab societies that had universal appeal.

Once we make our films, how do we get Arab films into Arab cinemas? Are our distribution models working? The region has both extremes - Egypt's quota model to the UAE's free-market example. I believe in consumers' choice, but I also believe consumers must be presented with the choice, which is currently not the case. How do we address that? Is the internet, that is so reviled by big studios in the US, the saviour for the Arab film-maker?

Currently 35 million Arabs are on broadband and this number is expected to hit 60 million by 2015. Is online streaming the best way forward for Arab films? Cinemoz, which is following the Hulu model, offers only Arabic content and already has 500 titles.

Will an online technology/entertainment revolution change the way real world distribution works? Or will Arab films skip traditional physical viewing to online streaming?

Of course, the region still faces challenges, and we all know what they are:

Limited funding
Focus on talent development
Infrastructure
Organised distribution and marketing
Script development
Specialised film schools
Censorship
Absence of film culture
And piracy, which is a global issue

And we even know what the answers are, but what we need are working and sustainable solutions.

As the world order changes, how do we position ourselves? Do we need more international partnerships or do we walk it alone? Clearly, the film industry all over the world is undergoing tremendous change, and is trying to reinvent itself without destroying local industries.

We in this region, face a unique challenge, as we are creating an industry against this backdrop of change. The advantage is that we know the challenges. We know the answers.

What we need, is to view the change as an opportunity. We need to react quickly and draw up a clear strategy, develop a roadmap and work together as stakeholders, to create a thriving industry in the GCC for the Arab world and beyond.
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