China's Film Regulators Unveil Official Box Office Reporting After Secret MPAA Deal

The new website from the country's Film Bureau is being viewed as a sign that China will honor a commitment to allow greater oversight of its box office, after allegations of fraud.

China's film industry regulators have launched a new website supplying official, comprehensive ticket sales data from the booming Chinese box office — a first for the country's fast-growing film market, now the world's second largest.

The website, which went live late last week, is being viewed as a good-faith gesture from China, meant to show that it is serious about cracking down on rampant box office fraud in the country and that it will honor a new agreement signed in secret with the Motion Picture Association of America.

During Chinese president Xi Jinping's high-profile visit to the United States late last month, the MPAA sealed a new film distribution agreement with China's powerful state studio, China Film Group. According to THR's sources, the deal includes a concession from China to allow international firms to audit China's box office for the first time (the MPAA has declined to comment). 

"It is a forward step to show seriousness from the China side to the MPAA that they will honor the new amendment to let foreign firms audit box-offices," a Beijing-based source with knowledge of the discussions tells THR.

Previously, box office data in China came from various private agencies or the state-affiliated distributors themselves, which regularly reported conflicting totals. The new website is said to be China's attempt at a transparent, centrally managed box office data source covering cinemas nation-wide.

The website is updated daily at 9:30pm, Beijing time. It is managed by the Special Fund Administration, a division of the China Film Bureau that collects and manages the 5 percent film fund tax that is charged on all movie tickets sales in China — proceeds of which are earmarked for developing the country's movie industry.

The release of the site has also been hailed in the local Chinese press and by movie figures on social media as a positive development for the Chinese film industry. 

Irregularities at the box office have recurred throughout the meteoric rise of the Chinese film market. In September, China Film Group was caught rigging grosses in favor of a state propaganda movie, The Hundred Regiments Offensive, which is believed to have cost Paramount's Terminator: Genisys as much as $11 million. And sources close to Furious 7's huge summer release in China have told THR that China Film Distribution under-reported the film's gross to Universal by as much as $30 million (Universal and Paramount declined comment).

Similar ticket fraud schemes were reported back in 2009 during the release of Founding of a Party, a propaganda epic produced to commemorate the 90th anniversary of the Chinese Communist Party’s beginning.

Chinese regulators have tried to internally address patterns of corruption at cinemas in the past, as it was believed to be hurting both local and imported films. In 2014, China's entertainment industry watchdog, State Administration of Press, Publication, Radio, Film and Television (SARFT), issued new rules requiring cinemas to upgrade to a national digital ticketing platform to help stop under-reporting of box office sales. China's official box office total for 2013 was $3.6 billion, but industry experts believed that the real sales were at least 10 percent or more.  

Industry watchers in China say the new ticketing system should make it possible for the China Film Bureau to offer ticket sales data on the new website on an almost real-time basis, rather than once daily. Real-time data would be a more powerful tool for deterring ticket fraud schemes. Nonetheless, the centralized site is being welcomed as a positive first step. 

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