China, world’s largest film market—or is it?

Columns
Asia / Pacific Roundabout

Early last year, official Chinese quarterly movie ticket sales statistics for the first time outstripped those of North America, setting the country on a path to becoming the world’s new largest film market. But not everything is as clear-cut as it may appear.

Industry reports as well as the Chinese authorities have repeatedly highlighted a rather outrageous—and criminal—malpractice perpetrated by certain production companies, studios and film financiers alike: the misreporting of ticket sales figures in order to drive up stock prices.

"When you have a hit film, your stock price will go up several times in terms of market valuation compared with the grosses from the box office, so some 'financial genius' came up with this idea: Why don't I have fake box-office numbers so that I can make much more money from the stock market?" a BBC report recently quoted Chinese film critic and industry observer Raymond Zhou.

"The natural way is to make a good movie and then your stock price will go up, right?" he added. "But some people have reversed [that] equation. They see the rise of the stock price as the ultimate goal and have just used the making of the movie as an excuse [to achieve that objective]."

The mechanics are surprisingly ingenious. Investors or studios may buy out entire late-night screenings at multiple theatres, which will artificially increase audience figures although in reality the auditoriums in question were totally empty.

But those empty seats will of course register as “ticket sales” and be reflected in box-office statistics. This gives the false impression that the particular movie has turned out a genuine blockbuster, which consequently will drive up stock prices of the companies involved as people rush to buy shares.

Alternatively, producers and investors may just buy all unsold seats across circuits and showtimes instead of buying out entire auditoriums, which is much harder to track.

And a further variant of box-office meddling is so-called “phantom tickets” in cases where cinema circuits themselves have co-financed a film. Basically, the operator can sell itself the phantom tickets for free and additionally increase the number of screenings across its whole circuit to inflate box-office figures.

While Chinese regulators are putting up a hard fight to deter this type of fraud, it is an uphill battle, as the culprits’ tactics change frequently. But last year the government at least introduced stiff fines for misreported box-office figures ranging from $7,000 to $74,000, with several companies having been prosecuted since then. Additionally, China recently allowed the Motion Picture Association of America to use an accounting firm to audit local box-office data.

Whether these measures will help to effectively eradicate the malpractice to any meaningful degree, only time will tell. Until then, China’s title will have to be taken with a grain of salt, as it may not be all that it’s made out to be.

Cambodia Jails Australian Filmmaker for ‘Espionage’

A court in the Cambodian capital of Phnom Penh has sentenced Australian documentary filmmaker James Ricketson to six years in prison for spying for an unnamed country.

Ricketson was arrested in June 2017 because he was flying a camera drone over an opposition rally and subsequently accused of espionage, a charge which the 69-year-old consistently rejected. His lawyer said he would appeal against the verdict.

The filmmaker’s arrest came amid a nationwide crackdown on opposition supporters by Cambodia’s increasingly authoritarian government led by Prime Minister Hun Sen. Ricketson has been known as a staunch critic of Hun Sen.

After his arrest, local pro-government media labelled Ricketson as “a spy for an unknown country” and accused him of “acting to promote revolution.” In addition to espionage, the prosecution also charged him with “harming the reputation of Cambodia in the eyes of the world.” But Ricketson dismissed all accusations as ridiculous and unfounded throughout his trial.

"The Phnom Penh Municipal Court has decided to convict James Ricketson and sentences him to six years in prison for espionage and collecting information that is harmful to the nation between December 2010 and June 2017," presiding judge Seng Leang said during the verdict reading.

Operation Red Sea to Represent Hong Kong at 2019 Oscars

Chinese action blockbuster Operation Red Sea has been chosen to represent Hong Kong at the 91st Academy Awards to compete for the coveted Oscar in the Best Foreign Language Film category, the movie's official website announced on Sept. 24.

The film, a China-Hong Kong-Morocco co-production that reportedly cost about $70 million to make, is loosely based on the dramatic evacuation of almost 600 Chinese citizens and about 220 foreigners by China’s navy from the war-torn country of Yemen in 2015.

Starring a roster of Chinese A-listers, Operation Red Sea has raked in around CNY 3.65 billion ($531 mil.) since its premiere in February, making it the country's top earner in 2018 so far as well as China’s second-highest grossing film of all time.

The picture has also received several awards, including Best Filmat the 25th Beijing College Student Film Festival and Best Visual Effects at the 2018 Beijing International Film Festival.

"I am honored that Operation Red Sea has gained this recognition and I would like to extend my sincere thanks for your support and once again thank my team members for what you all have accomplished,” the film’s director, Dante Lam, was quoted on the movie’s website.

For feedback and inquiries, contact Thomas Schmid at thomas.schmid@filmjournal.com.