New rules have gone into place in China to prevent cinemas from manipulating viewing figures and other cinematic frauds

China’s new rules stop box office cheats
Liu Lu, Tao Yiping
BEIJING, Jan. 22 (Xinhua) — New rules have gone into place in China to prevent cinemas from manipulating viewing figures and other cinematic frauds.
The State General Administration of Press, Publication, Radio, Film and Television, China’s movie watchdog, confirmed on Wednesday that it has issued a circular with new rules to prevent box office fraud.
Earlier this month, the administrators defined a standard on the technicalities of managing cinema ticket sales to prevent tax avoidance through falsification of numbers of movie-goers and reporting of artificially reduced ticket sales.
According to the circular, film distributors should conduct routine inspections of cinemas and report those which break the rules whenever and wherever they are discovered. Persistent or severe offenders may have their licenses revoked.
These frauds are often facilitated through the use of illegal ticketing software offering double systems to cheat on box office sales. The circular said that all ticketing software must be upgraded before May 1 and disqualified software will not be allowed. An upgrade to the national digital ticketing platform will be completed by that date and all commercial cinemas must upgrade or face being banned from operations.
China has made rapid progress in the film industry in recent years.
In 2013, box office sales neared 21.8 billion yuan (3.6 billion U.S dollars), and domestic films raked in about 12.8 billion yuan, a year-on-year increase of 54.3 percent.
However, industry experts believe that real box office sales are at least 10 percent more and cheating by some cinemas has gravely affected tax revenue, as well as hitting the enthusiasm — and bottom line — of film makers.
Yin Hong, professor of Tsinghua University, said it is now common for cinemas in smaller cities to report fewer box office receipts to avoid paying taxes.
“Box office fraud will lead to disorder in the film market and to vicious competition which will ultimately affect Chinese people’s viewing pleasure,” said Yin.
Wang Changtian, president of film company Enlight Pictures, said that if film releasers did not make a profit, they would have no funds to make more movies; a vicious circle of film development.
Yin suggested harsher punishments for cheating cinemas and incentives for local departments to supervise cinema operations.
“The standard of ticket management can be further improved this year,” said Zhang Hongsen, head of the administration.
Departments at all levels should be positive in solving emerging film ticketing problems to keep the film industry on an even keel, Zhang added.