China Film Execs Claim 'Terminator' a Victim of Box-Office Fraud to Boost Propaganda Movie

Terminator: Genisys Still 4 - H 2015
Paramount Pictures

Terminator: Genisys Still 4 - H 2015

The CEOs of Huayi Bros. and Bona, the country's two largest private film companies, sent out messages on social media suggesting malfeasance at Chinese cinemas.

Something stinks at the Chinese box office – at least, that's what the CEOs of the country's two largest private film studios are suggesting.

Since its release on Aug. 28, Chinese propaganda film The Hundred Regiments Offensive has been battling Paramount's Terminator: Genisys for the top spot at the Chinese box office, now the world's second-most-valuable film market.

The Chinese government has cited patriotism spurred by last week's 70th anniversary of Japan's defeat in World War II as the key to the film's success. But a broad swath of China's film community – from ordinary viewers to cinema managers to studio heads – has raised questions about the nationalistic war epic's outsize performance.

Produced by a group of state-owned film companies to celebrate the WWII anniversary, The Hundred Regiments Offensive came from behind to dominate Terminator Genisys at Chinese box office for the week of Aug. 31 to Sept 6, grossing $39.40 million over Terminator’s $26.67 million, according to Beijing-based research firm Entgroup. But Regiments achieved its sudden surge from far fewer screenings than Terminator – 99,728 for Regiments compared with 250,435 showings for Terminator – suggesting that the government-backed movie either racked up a phenomenal per-screen average or there is more to the story.

Wang Zhonglei, president of the influential private Chinese film studio Huayi Brothers, which recently signed a raft of deals extending its ties with Hollywood, has been a vocal critic of the Regiments results. Huayi Bros.’ romantic drama Tale of Three Cities, starring Tang Wei, opened the same Friday (Sept. 28) as Regiments.

As box-office results were coming in that Friday night, Wang shared a message with his 9.94 million followers on Weibo, China’s version of Twitter: ”Where’s all the box office gone? Please keep those dirty hands away!” The message was accompanied with data showing that Huayi’s Tale of Three Cities had 7.03 percent of screenings that day but took just 1.54 percent of box office, while Regiments was said to have taken 30 percent of total box office in China from just 10.12 percent of showings. By Tuesday (Sept. 1), Regiments accounted for 57.67 percent of all box office for the day, from just 11.64 percent of screenings – a near impossible feat, Chinese film figures say. Terminator Genisys, meanwhile, accounted for nearly 30 percent of screenings in China on Sept. 1, but pulled in just 14.93 percent of the total revenue.

Yu Dong, CEO of Bona Film Group, China’s other major private studio, weighed in with a similarly outspoken message on Chinese social media. "We never steal others' box office, so please don't steal ours,” he said to his followers on WeChat. The message was accompanied by a mock search warrant, designed in the style of promotional materials for Bona's police thriller The Dead End, which was competing with Regiments and Terminator in Chinese cinemas. The poster invites cinemagoers to share any evidence of box office fraud.

Plenty of film fans have taken Yu up on the offer. Since Regiments’ release, moviegoers have been circulating photos of suspicious tickets they received from Chinese cinemas. The photos show printed tickets for Regiments with screening details for other movies scribbled over them. Chinese bloggers cite the photos as evidence that cinemas are channeling box-office revenue away from Terminator and Huayi and Bona’s movies to prop up the results for Regiments. For example, when moviegoers ask for tickets to Terminator, cinema staff log the sale for Regiments while ushers rewrite the tickets by hand for the Terminator screening (some moviegoers have even posted videos of the process).

Chinese industry sources say the cinemas are simply responding to a set of incentives imposed on them by China Film Distribution, the distribution wing of the all-powerful state studio, China Film Group. 

A widely circulated essay, titled "Entertainment Capitalism” and published anonymously in China last week, alleges that all major cinema chains were ordered by CFD to hit specific box office targets for Regiments. The chains that reached their quotas would be rewarded with a special revenue sharing arrangement throughout Regiments’ first week on release, Aug. 28 to Sept. 3. For all Regiments tickets sold, CFD would allow cinemas to keep 100 percent of the revenue and would further reimburse them for the usual 8.3 percent in taxes Chinese cinemas pay on ticket sales. Typically, for a Chinese domestic film, the producer and distributor take as much as 43 percent of box office (Hollywood movies take a maximum of 25 percent of box office in China). Thus, cinemas were given a powerful financial incentive to sell as many Regiments tickets as possible – not to mention the official umbrage they might face for failing to hit their target. 

A cinema chain manager in Beijing, who spoke with THR on the condition of anonymity, said the essay’s claims were accurate. The manager said his company's programming director was asked by CFD to attend a meeting in which the details of the arrangement were explained. "They also called us and ordered us to book two sold-out dummy shows before Sept. 3," the manager added. 

As Terminator was both foreign and the biggest performing title at the time, it naturally became the top target for graft. The cinema chain manager said he believes $11 million (70 million yuan) is a "conservative estimate" for how much the Paramount film lost from ticket sales channeled to the state propaganda picture during CFD's period of preferential treatment.

The box-office data over the alleged “CFD special treatment period” indeed suggests something was amiss. On Sept 3, the final day of CFD’s full revenue offer to cinemas, Regiments came in first at the box office with $7.99 million over Terminator’s second-place $5.71 million. The next day, Regiments plummeted to sixth place, pulling in just $670,000, while Terminator returned to the top with $5.40 million. 

The Hollywood Reporter contacted Paramount for comment, but representatives could not be reached at the time of publication. 

Despite the allegations of graft, Terminator: Genisys has been a huge surprise hit in China. As of Sept. 7, the film had grossed $111.92 million there – well over its disappointing $89.6 million performance at the North American box office, elevating an undisputed flop into international hit status. But with the previously announced Terminator 6 sequel hanging in the balance – and now fully dependent on foreign ticket sales – every $10 million counts.