BOX-OFFICE FRAUD

'Us and Them' refund dispute rekindles concerns about fraudulent practices in China's film industry

The controversy arising from the massive ticket refunds for Chinese romance movie Us and

Them on online ticketing platforms during the film’s May Day holiday debut two weeks ago has triggered concerns about artificial inflation of box-office numbers in China.

The film, directed by Taiwan singer/actress Rene Liu, grabbed the No.1 spot at the threeday holiday box office with 640 million yuan ($100.8 million). However, an unusual amount of ticket refunds on Chinese ticketing platforms including Maoyan and Taopiaopiao that weekend led some to suspect that the studios behind the film were trying to inflate its presale numbers in order to build hype for the film.

Some 380,000 tickets were refunded on Chinese ticketing platform Maoyan alone, roughly equivalent to 13 million yuan, according to an announcement from the platform, also one of the film’s distributors and marketing partners.

According to a report from China Film News on April 30, China’s State film bureau announced in a statement that it was investigating the “abnormal” refunds.

While the investigation is still underway, a second announcement from Maoyan on May 3 suggested that 46 percent of the refunds were possibly due to ticket scalpers while 54 percent were routine refunds by users on the platform.

Long-term damage

Despite the platform’s clarification, the incident triggered backlash from media and Chinese industry insiders, who accused Maoyan and those behind the film of trying to “manipulate the market.”

“Previously, online ticketing platforms usually operated as neutral third parties providing relatively objective information and data to the industry,” said Liu Jianfeng, head of Poly Film Investment Co Ltd’s Public Affairs Department, in an interview with Beijing Business Today.

“But now, with the ticketing platforms also taking part in marketing and distribution, the platforms’ other branches might be influenced by this change,” said Liu. If government authorities do determine that the refunds were indeed part of a fraudulent attempt to bolster presale numbers, while the parties responsible may have succeeded in building hype for the film, experts note that their actions will end up damaging the film industry over the long run. “Cinemas might not want to participate in presales anymore. If that happens, in the end it is the film market as a whole that will suffer,” Chen Shaofeng, associate director of Peking University’s Cultural Industry Institute, said in an interview with Beijing Business Today.

Ongoing issue

This is not the first time that attempts to artificially inflate box-office numbers has caused trouble for the Chinese mainland film market, now the secondlargest in the world. Back in 2009, animated coproduction Astro Boy was screened in the Chinese mainland on October 23. Days later, its distributer Enlight Media announced that the film’s opening weekend box office had reached 40 million yuan. However, according to official box-office data released by China Film News, that number should have only reached 17 million yuan. The incident sparked a backlash among Chinese audiences and Enlight Media quickly released an announcement apologizing for their reported box-office numbers, explaining that the 40 million yuan was supposed to have been just an estimate.

In 2015, Chinese fantasy comedy film Monster Hunt was also embroiled in a box-office scandal. The film, grabbing a total of 2.43 billion yuan, was the highest-earning film in China that year.

The controversy arose after it was revealed that Monster Hunt’s producers had booked screenings, including midnight showings, at some 29 cinemas for 40.42 million yuan more than a month after the premiere that they claimed were free showings for a “specific audience segment.”

Facing criticism from netizens, the film’s producers explained that the showings were a “public welfare” move so more people would have the chance to see the film.

According to cinema data, all of the seats for these screenings were sold out, however, an investigative report by China Central Television news in April 2016 revealed that many of these showings were actually empty.

Netizens note that if the 40 million yuan from the free screenings is deducted from Monster Hunt’s box-office total, that would make Furious 7 the No.1 film of that year. In 2016, Chinese action film Ip

Man 3 was also dragged into a controversy after the National Film Market Administrative Office announced that 7,600 screenings of the film, equivalent to 32 million yuan, were “problematic” and would not be counted toward its final box office.

Purposely inflating or misreporting box-office figures is a “tough, long-time problem that the film industry has continued to face,” the Xinhua News Agency quoted an official from the State film bureau as saying in 2017.

The film watchdog has been trying to improve the situation by introducing new regulations aimed at curbing these dishonest practices.

In March, 2017, 326 cinemas were fined by the bureau for faking box-office figures. This was the same month in which China’s Film Industry Promotion Law was enacted – the first law to officially tackle fraudulent box-office numbers.