CHINA-US: FILMS
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The Wall Street Journal reported on June 27, 2017, that Hollywood studios are conducting an audit of box-office receipts from Chinese movie theaters suspecting that their box-office receipts in China are underreported since 2016. The audit has been under way for six months and is being conducted by accounting firm Pricewater house Coopers LLP for the Motion Picture Association of America. The audit is scrutinizing ticket sales at a granular level, starting from how local movie theaters report sales all the way up to how revenue is reported to U.S. studios by state-backed China Film, which distributes most films in the country. It said China Film couldn’t immediately be reached for comment. (Comment: The most recent trade deal, struck in 2012, allowed for 34 films to be released in theatres in China each year, with Hollywood studios receiving 25% of those box-office receipts. The 2012 agreement included provisions for a basic audit, which Hollywood had already wanted for some time, the person said. However, it took almost five years to hammer out a legal agreement for the audit. China’s box office grew 3.7% to 45.71 billion yuan ($6.71 billion) in 2016. That was slower than an average growth rate of 34% over the past five years due to cutbacks in discounted tickets and a crackdown in so-called “ghost screenings,” in which movie distributors buy tickets in bulk to make a flop look like a hit.) |