China Allows Hollywood to Audit Box Office for First Time

Gladys Abbott
June 27, 2017

Hollywood studios are anxious that they are being shortchanged by Chinese movie theaters and have made a decision to conduct an audit of the box office receipts coming out of the country, sources told the Wall Street Journal. The person said that end of this third quarter result will be shows the reality.

Hollywood has always been suspicious that the box office receipts they receive from the movies they release in China have been underreported, and now they are taking action.

Walt Disney Co. and Viacom Inc's Paramount Pictures are major Hollywood studios are gives the importance for this audit result.

In August, a USA government delegation is due to travel to Beijing to try to convince officials in China to allow more foreign films - especially Hollywood films - to be imported under revenue-sharing terms.

China's ticket sales growth slowed last year to the weakest pace since at least 2008, but Hollywood studios are still banking that spending on movies in the country will still surpass that of the U.S.in coming years.

China is a huge market for Hollywood, and some movies perform better at the Chinese box office than in North America. Others such as Time Warner Inc.'s Warner Bros. And this is after China approved new fines for falsifying box-office sales in November.

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In March, China's State Administration of Press, Publication Radio, Film and Television penalized more than 300 theaters in March for under-reporting ticket sales, Bloomberg reports.

However, multiple cases of ticketing fraud and empty "ghost screenings" in the world's second-biggest movie market have Hollywood wanting to take a closer look at the numbers.

The audit would also fulfill a promise by the Chinese industry to American filmmakers in 2015, during Chinese President Xi Jinping's USA visit.

Aside from revenue-sharing films, China also imports flat-fee films.

Studios in Hollywood have been under the suspicion for some time that their box office receipts in China are being underreported, the Journal noted.

Movies that perform poorly in the US can make up some ground in China.

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