China Box Office: 'Ip Man 3' Opens to $75M Amid Fraud Allegations, 'The Mermaid' First to Cross $500M

Ip Man 3 Still - H 2015
Courtesy of Pegasus Motion Pictures

Ip Man 3 Still - H 2015

'Zootopia,' meanwhile, gave Disney Animation its highest China debut ever, pulling in $23.5 million and earning rave local reviews.

Ip Man 3, the latest installment of the hit Hong Kong martial-arts franchise starring Donnie Yen, punched its way to a massive opening weekend in mainland China.

The fight flick, which was produced by Pegasus Motion Pictures and includes the stunt casting of Mike Tyson as a bone-crunching villain, grossed $71.5 million from Friday to Sunday, according to estimates from Beijing-based box-office monitor Ent Group.

The film's high-flying rollout has been marred by widespread allegations of fraud, however.

Several major media outlets, including the state-backed China Daily, carried reports Monday alleging that Ip Man 3's Chinese distributor, Dayinmu Film Distribution, orchestrated an audacious scheme to enhance the film's perceived performance.

The distributor is accused of bulk-buying discount tickets to its own film through various cinema chains across the country. The theater chains then scheduled multiple "ghost screenings" after midnight, with ticket prices set to the highest rates to ensure that the title racked up major revenue. China Daily ran a screen grab from a Chinese mobile ticketing service showing weekend screenings for Ip Man 3 running from 5:40 p.m. to 11:25 p.m. and charging about $6 per seat (38 Chinese yuan) — a common discounted online rate for a movie ticket in much of China — followed by two additional screenings at 12:50 a.m. and 12:56 a.m. asking for a suspiciously steep $31 per seat (203 yuan).

Some cinemas are alleged to have scheduled "sold-out" Ip Man 3 screenings every 10 minutes from midnight to 2 a.m. Reports of other alleged tactics include less desirable front row and aisle seats having been mysteriously sold out in advance to many Ip Man 3 screenings, and cinema chains in smaller regional markets reporting much larger grosses for the film than they have for other recent blockbusters.

Chinese distributors have been accused of deploying such tactics in the past. Most notably, Edko Films admitted to buying some 40 million tickets to last summer's CGI fantasy blockbuster Monster Hunt, which eventually unseated Furious 7 to become China's top-grossing film ever. The studio apologized and said those involved in the activity would be reprimanded. 

Although bribing cinemas and mass-buying tickets to one's own films undoubtedly makes for hefty marketing expenses, the investment is believed to pay off if the mainstream Chinese attendance begins to regard the "hit" picture as an event film not to be missed. 

Last October, China's State Administration of Press, Publication, Radio, Film and Television (SARFT), which oversees the country's media and entertainment sectors, said that it would introduce stricter regulation to improve oversight of ticket sales at cinemas. Wrongdoers would be blacklisted and their names made public, the regulators said.

Both SARFT and China Film Group, the country's dominant state-backed distributor, issued statements Monday saying they have begun investigating unspecified allegations of box-office fraud.

"We have received many complaints about box office fraud," said the SARFT statement. "We will nullify box office returns as necessary and punish the cinemas, distributors and film companies involved, depending on the seriousness of the offense."

SARFT Film Bureau head Zhang Hongsen also posted an ominously worded message via WeChat, writing: "It was not easy for the Chinese film market to get to the point where it is today. We should treat it with respect."  

China Daily's report further alleges that the inflation of Ip Man 3's gross may be part of an even larger accounting scandal, whereby the distributor's parent company, Kuali Group, sought to temporarily inflate the value of one or more of its publicly listed subsidiaries. 

Despite the hand-wringing and industry turmoil surrounding Ip Man 3, the Chinese film sector also had much to celebrate over the weekend. Stephen Chow's conservation-themed romantic comedy, The Mermaid, became the first-ever film to gross more than $500 million in China. 

The film crossed the half-billion threshold on Saturday and pulled in $9.9 million for the full weekend, lifting its record-breaking cumulative gross to $505 million (3.29 billion Chinese yuan) after 28 days in Chinese cinemas, according to data from Ent Group.

The astounding performance gives The Mermaid membership in an elite group of just six other films that have earned more than $500 million from a single territory, not accounting for inflation. They are: Star Wars: The Force Awakens ($928.8 million), Avatar ($749.8 million), Titanic ($600.8 million), Jurassic World ($652 million), The Avengers ($623.4 million), and The Dark Knight ($533.3 million).

The Mermaid's record run comes amid rapid growth in the Chinese movie market as a whole. In February, the Chinese box office took in $1.05 billion, surpassing North America's monthly haul ($798.6 million) for the second time in history. At its current rate of growth, China's theatrical market is expected to surpass North America as the world's largest sometime in early 2017.

On Feb. 20, The Mermaid pushed past Monster Hunt, from director Raman Hui, to become the all-time top-grossing film at the Chinese box office. Monster Hunt grossed $373.7 million last summer (2.44 billion Chinese yuan), unseating prior record holder Furious 7's $371.7 (2.43 billion yuan). (Local Chinese currency is used to track box-office records, as the exchange rate to the U.S. dollar fluctuates considerably).

Blending Chow's signature brand of ribald humor with a love story and an environmentalist message, The Mermaid centers on a billionaire playboy (Deng Chao) who buys a dolphin preserve with the intention of illegally developing it. A beautiful mermaid (played by newcomer Jelly Lin) plots to protect the aquatic paradise by seducing and assassinating the tycoon — but her plans go awry after she falls in love with him. The film was produced by Beijing Enlight Pictures and China Film Group.

The Mermaid can be expected to extend its record slightly over the coming weeks. According to a statement from China Film Group released last Thursday, the film has been granted permission to screen for an additional three months in Chinese cinemas. In China's highly regulated film market, the gesture is akin to giving Chow and his producers permission to take a few victory laps.  

Zootopia, meanwhile, outshone local expectations, giving Disney Animation its biggest China opening ever with a second-place weekend haul of $23.5 million, according to Ent Group. Outstanding word of mouth surrounding the title — it currently has sky high ratings of 8.8 and 9.4, the highest of any title in wide release, on reviews aggregators Mtime and Douban, respectively — bodes well for a strong hold next weekend.