China suspends movie theaters over fraudulent box office reporting.
In February, Chinese authorities started to crack down on movie theaters that manipulated box office figures. This ended in nine cinemas that were banned from screening new movies. Now, seven additional theaters join the list.
According to Deadline, there are over 18,000 cinemas in China‘s growing film industry and in order to regulate the booming industry, China is focused on shutting down illegitimate movie theaters. On Monday, the China Film Producers’ Association and the China Film Distribution and Exhibition Association issued a statement saying the movie theaters had used a dual software system that allowed them to sell tickets without registering the real earnings, the Xinhua news agency reports. Last January, China‘s State authority SAPPRFT issued a memo pointing out new regulations that demanded all movie cinemas upgrade their software to a national digital ticketing platform before May 1.
You may ask why would China suspend movie theaters from fraudulent box office reporting? In China, business attempt to hide income from the government because China takes a 3% value-added tax on revenues as well as a 5% film fund tax.
The number of movie theaters in China has exploded over the last ten years. According to Beijing-based film industry research company Entgroup, there were just 3,000 movie screens in operation in China in 2007. Now there are more than 18,000.
According to The Hollywood Reporter, China is now the world’s second largest movie market and the local box office total is expected to grow to $4.6 billion this year. In February alone, their box office reached $520 million, about the same as the country’s full year total as recently as 2007.
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