Casting suspicion on China’s box- office stats
Officials probe ticket sellers after a stunning tally for ‘ Ip Man 3,’ the latest Chinese film that may have netted bogus sales
BEIJING — Not a week goes by without some shocking box- office statistic from China: A mermaid movie has raked in more than $ 500 million in four weeks. February’s ticket sales exceeded those in the United States. Total sales jumped nearly 50% last year to $ 6.8 billion, and the market is on pace to become the world’s largest by 2017.
But even Chinese regulators — who typically bend over backward to ensure the success of homegrown f ilms while keeping a tight leash on Hollywood imports — seem to smell a rat in last weekend’s stunning numbers for the local martial arts movie “Ip Man 3.”
Officials with the State Administration of Press, Publications, Radio, Film and Television on Monday launched an investigation into four online ticket sellers to determine whether sales f igures for the f ilm were manipulated and hyped.
The investigation comes at a delicate time for China, which is eager to trumpet the success of its homegrown film industry, and as companies such as Alibaba and Dalian Wanda Group
forge closer ties with Hollywood. Just last week, AMC Entertainment, owned by Wanda, announced that it was buying Carmike Cinemas, the nation’s fourthlargest theater chain, for $ 1.1 billion.
Bankrolled in part by a f lamboyant Shanghai mogul with an estimated net worth of $ 780 million, the Donnie Yen- Mike Tyson f lick supposedly took in $ 72.3 million in its first three days in theaters even though March is typically a slow moviegoing period. By comparison, Disney’s “Zootopia,” which also opened Friday, earned about one- third as much.
Movie fans reported strange goings- on with online ticketing services, which showed unusually large numbers of “Ip Man 3” screenings sold out, and ticket prices as high as $ 31 ( the average ticket price in China is around $ 5). Some cinemas indicated they were showing the movie to full houses every 10 minutes.
“Ip Man 3,” though, is hardly the only Chinese film to have come under recent suspicion for bogus box- off ice f igures. Last summer, producers of “Monster Hunt,” an animated/ live- action movie, admitted handing out 40 million free tickets to push the film past Universal’s “Furious 7” as the mainland’s highest- grossing f ilm ever ( a record since eclipsed by “The Mermaid”).
And in September, the chief executives of privately run studios Bona Film Group and Huayi Bros. took to social media to grouse obliquely about box- office manipulation favoring the propaganda f ilm “The Hundred Regiments Offensive,” produced by a state- run company.
“The question some people … might be asking now is, is the $ 6.8- billion f igure real?” said Rance Pow, president of movie industry consulting f irm Artisan Gateway, referring to last year’s official total Chinese box- off ice tally. “Because it’s like, there’s a portion of f ilms on the Chinese language side that’s purposely inf lated, that has false ticket sales.”
Whereas makers of “Monster Hunt” may have been motivated primarily by pride to nab the box- office crown from an American f ilm ( and enabled by Chinese regulators), industry watchers say the backers of “Ip Man 3” may have sought to hype the results to boost their company’s stock price. Two weeks ago, “Ip Man 3’ s” multimillionaire investor, Shi Jianxiang, became chairman of a Hong Konglisted company that owns rights to theatrical earnings from the movie.
Shi did not respond to a request for comment. But shares in the Hong Kong company, Shifang — which were trading at about 5 U. S. cents in October — began rising sharply at the end of 2015, to about 40 cents, as “Ip Man 3” was released in Hong Kong. The movie’s mainland opening, however, was delayed. On Friday, when “Ip Man 3” landed in mainland cinemas, Shifang’s stock price closed at a 52- week high of about 48 cents. That day, Shi posted a picture of the rising stock chart on his WeChat social media account.
On Monday, Shifang shares dropped nearly 18%, and after the probe was announced, the stock plummeted an additional 28% on Tuesday, closing at about 32 U. S. cents.
“If the producer or distributor is buying millions of dollars in tickets to create the appearance of demand … investors in this guy’s company are being duped,” said Robert Cain, a writer, producer and China f ilm industry consultant. “Those are mainly the people that get hurt.”
But Chinese investors aren’t the only ones who may suffer from shady box- office tactics. Fraudulent moves to inf late Chinese films’ box- office tallies can harm the performance of Hollywood fare if cinemas prefer to book local movies that offer extra gravy. “Zootopia,” Cain noted, initially had only about 14% of the weekend’s screen times, but after the “Ip Man 3” controversy surfaced, cinemas started shifting screens to the Disney film.
“Probably some of the exhibitors got caught with their hands in the cookie jar, or want to distance themselves from that film, and so now they’ve turned those screens over to ‘ Zootopia,’ ” he said.
Although moves to puff up the performance of Chinese f ilms have grabbed headlines lately, the opposite problem — exhibitors underreporting sales and pocketing the difference — has also long bedeviled the market. Zhang Hongsen, head of China’s film bureau, estimated in January that 10% of box- office sales, or $ 680 million, may have been stolen last year.
Zhang said that inaccurate box- office f igures were warping the market, giving producers and directors false impressions about what kind of f ilms were popular and how much to spend on them.
“It’s very simple. If the box office is harmed, producers won’t be motivated to create new films. If there’s no new content, even with more theaters, audiences won’t go to the cinema,” Zhang said.
Pow said that overinflation could have similarly damaging effects, because producers may benchmark budgets for movies against numbers that aren’t true.
“Then you can no longer make profitable f ilms because you have a false conception of the market,” he said. “In the long run, it hurts everybody.”