Analysis

Navigating conservatism and reputational risks in Saudi Arabia's emerging entertainment sector

  • MENA
  • Saudi Arabia
  • Creating a Resilient Organisation
  • Political and Economic Risk Consulting
Navigating conservatism and reputational risks in Saudi Arabia’s emerging entertainment sector

 

The Saudi government this year will start building a major entertainment hub, al-Qiddiya City, comprising amusement parks and cultural activity areas, near the capital Riyadh. Over the past three years the entertainment sector has witnessed significant growth, despite occasional public backlash and human rights campaigning leading to withdrawals from scheduled performances, just as US popstar Nicki Minaj did on 9 July.


Four key points:
  • As part of Saudi Vision 2030 and the drive to implement social change and economic diversification, the Saudi government will continue to heavily invest in the entertainment sector.
  • While occasional conservative backlash against entertainment initiatives may force the government to curtail or adjust certain initiatives, the authorities are unlikely to significantly slow the pace of social change they are pursuing. 
  • Companies in the industry will remain subject to occasionally arbitrary decisions and inconsistent regulations, as the government gradually finds its feet in the sector.
  • International human rights organisations’ targeting of performers and organisations in the sports and entertainment sectors will pose sustained reputational risks for investors.

Wider drive for social change

Recently, Saudi Arabia has taken significant steps to develop its entertainment and tourism industries to catch up with its neighbours (particularly Bahrain and the UAE) and pursue a broader agenda of social reform. Music festivals, theatre performances, sporting events, and circus and comedy shows are now taking place almost daily across the country. The kingdom is attempting to break with its past, when social conservatism and the religious establishment limited domestic entertainment options and forced hundreds of thousands of Saudis to seek recreation options in neighbouring countries or further afield.  

The government is planning several mega-projects, including al-Qiddiya City; the Red Sea project, to develop tourism around an archipelago of more than 90 islands; and the al-Ula eco-tourism project near the archaeological site of Mada’in Saleh, a UNESCO World Heritage Site in the north-west. Between December 2018 and February 2019, the “Winter at Tantora” festival took place in al-Ula, hosting cultural events and musical performances. The government approved electronic visas in March for foreign visitors to attend sporting events and concerts in the kingdom, long considered one of the most difficult countries for foreigners to enter.    

These initiatives are key to Saudi Vision 2030, launched by Crown Prince Mohammed bin Salman bin Abd al-Aziz Al Saud (known as MbS) to promote economic diversification and transform society. Social reforms include developing the domestic entertainment sector so that money Saudi citizens would otherwise spend on entertainment abroad remains in Saudi Arabia; attracting foreign investment; creating jobs for young Saudis; and countering extremist ideology. These initiatives come alongside other government efforts to foster social change, such as allowing women to drive, relaxing gender segregation rules and curbing the powers of the religious police.     

Ambitious plans

Turki Al al-Sheikh, the newly appointed head of the General Entertainment Authority (GEA), established in 2016, announced Saudi Arabia’s new entertainment strategy in January. He aims to place the kingdom among the top four Asian entertainment destinations and among the world’s top ten, though a timeframe was not provided. In April 2018 the GEA said that the government plans to invest around USD 64bn in the entertainment sector over the coming ten years and that it aims for the sector to contribute around USD 4.8bn to Saudi GDP, as well as generate 224,000 new jobs by 2030.

The development of the entertainment sector serves to further legitimise and increase the popularity of MbS, particularly among the educated and Westernised middle class in large cities. Saudi youth represent around 70% of the total population and increased entertainment options are a way to introduce them to government-led social change that challenges conservative and religious norms, thereby consolidating support. 

No more Nicki

In pursuit of its ambitious plans for the entertainment sector, the authorities have attempted work with world-class performers, sports leagues and event organisers. However, individuals and companies participating in these high-profile sporting and entertainment events will be increasingly exposed to reputational risks due to their association with the kingdom. Issues such as the conflict in Yemen, the detention of women’s rights activists and the killing of Saudi journalist Jamal Khashoggi will motivate international human rights groups to conduct “name and shame” campaigns to encourage entertainers and companies to boycott the kingdom. 

The risk will be exacerbated by the fact that most of these high-profile events will be directly tied to the Saudi government, as entities such as the GEA and the General Sports Authority (GSA) are playing a leading role in organising events and contracting performers and foreign organisations. The leaders of some of these institutions have close personal ties to MbS, who is accused of direct responsibility for the kingdom’s alleged transgressions by human rights organisations.

In the most notable example of a high-profile setback for the kingdom, Nicki Minaj cited her desire to support lesbian, gay, bisexual, transgender and queer (LGBTQ), as well as women's rights and freedom of expression as the reasons for her withdrawal after facing criticism from US-based human rights group Human Rights Foundation. The apparent success of efforts to get Minaj to cancel her appearance will encourage further campaigns.

Navigating public response at home

Saudi public opinion on cultural and social reforms is diverse but also difficult to ascertain. While one segment of society remains religiously and socially conservative, another segment is keen on fostering social change and supporting the government’s social and cultural reforms. Moreover, even those broadly in favour of the government’s agenda can find specific initiatives objectionable. 

Minaj’s slated appearance had stirred controversy within the kingdom due to the explicit elements of the singer’s music and performances, controversy that played out in large part over Twitter. The government uses social media backlash as a barometer for calibrating how far it can go and has cancelled events or taken disciplinary actions in specific instances of outcry. The authorities can also use this social outcry as cover in cases such as Minaj’s withdrawal; local media outlets reported that her appearance was cancelled based on an official directive due to her act’s inappropriateness. 

As the government pushes forward with its reform programme and attempts to navigate the public’s response, it can respond defensively and reactively to public backlash, particularly over issues regarding gender mixing and women’s public attire, as seen in the examples below.

  • A mixed-gender nightclub that opened in Jeddah in June 2018 caused uproar among Saudi Twitter users, prompting the authorities to close it and the GEA to investigate.

  • An event in April 2018 organised by the General Sports Authority (GSA) and World Wrestling Entertainment saw a promotional video of female wrestlers in costume being broadcast on Saudi state television. The authorities quickly apologised for the video’s accidental broadcast after significant public backlash.

  • In April 2018, a gym for women published a video advert featuring a woman dancing in sports attire. This prompted an outcry on social media over the woman’s attire and allegedly provocative dancing. Though female fitness is a key government initiative, the GSA withdrew the gym’s operating licence.

  • Saudi Arabia’s first Comic-con was held in February 2017 in Jeddah by the GEA. The event was not segregated, and many attendees engaged in “cos-play” (dressing up as characters from popular comic books or movies). This event prompted significant public backlash against the GEA, who reportedly fined the event organisers over unspecified violations of their licence.  


These examples also highlight the ability of conservative segments of Saudi society to spontaneously mobilise over perceived improprieties. Such mobilisation is likely to remain spontaneous, rather than coalescing into a more organised movement against entertainment initiatives. This is due to restrictions on freedom of expression and the lack of mechanisms for social mobilisation in Saudi society, particularly around initiatives promoted by the authorities. The above cases highlight the way social backlash can prompt the authorities to temporarily backtrack on issues they have explicitly licensed or endorsed in an attempt to contain the outcry.

Nevertheless, the possibility of conservative backlash causing the government to curtail its plans is low. For example, the authorities will not backtrack by shutting cinemas or reversing the decision to allow women to drive, but they could alter their regulatory approach. Backlash to specific entertainment initiatives will force the government to occasionally cancel events or reorganise them. The government is keen to gauge public opinion of its entertainment initiatives to maintain its broad political legitimacy and avoid any major setbacks to its social reform agenda.  

As a result, organisations and performers will face a shifting set of rules during this strategic transition. Companies involved in these events face the prospect of ad hoc, unpredictable cancellations, as well as the risk of fines or other punitive actions as the authorities seek to appease the public. As the sector evolves stakeholders may gradually gain a clearer view of the boundaries of what is acceptable and what is off-limits for Saudi consumers.

 

Taken from CORE, Control Risks’ essential monitoring toolkit.

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