China Cracks Down On Box Office Fraud; Suspends, Fines Hundreds Of Cinemas


In November last year, China established a new film industry law which vowed to be tough on box office fraud. The rules came into effect on March 1, and this week, the Middle Kingdom made good on its promise to crack down on cheats. A total of 326 cinemas have been punished for violations, the official Xinhua news agency reported.

Regulators said 63 moviehouses were involved in fraud of about 1M yuan ($145K). Those cinemas will be closed for at least 90 days beginning March 27 with their permits revoked for assessment. Another 63 were closed for at least 60 days, and a further 110 face fines of $29K. The rest, whose fraud amounted to less than 100K yuan ($14.5K), were issued warnings.

Box office manipulation has been a major issue in China and the new law is the first of its kind there. The codification of a crackdown is an important step. While returns in part slowed in 2016 because of a curb on false reporting, a real effort to stop inflated figures may help level the playing field.

The PROC had already begun cracking down on manipulation earlier in 2016. SAPPRFT slapped the distributor of Hong Kong actioner Ip Man 3 with a one-month suspension from releasing films after investigating it for fraud. That was after the distributor of 2015 hit Monster Hunt had given away $6.2M worth of tickets for “public welfare screenings” and acknowledged there were overnight and duplicate screenings.

Also in 2015, there were reports of box office being falsely goosed when people buying tickets for one film were sold entries to another title with write-ins on the tickets then allowing moviegoers to instead see the film they initially sought. According to a 2016 Xinhua report, statistics indicate that at least 1% of all box office takings have been “stolen” in recent years.

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