Hollywood will audit box office in China in an effort to gain higher revenue in new negotiations

Concerned that the growing box office fraud in China will affect future cooperation between China and the United States, The Motion Picture Association of America, which represents the interests of six major Hollywood studios, will hire PricewaterhouseCoopers to conduct box office audits of Hollywood blockbusters released in China.

Original title: China Box Office Audit: Why Hollywood Needed to Get Tough

Original author: BRENT LANG GENE MADDAUS

media "Variety" quoted Bloomberg News as saying that Hollywood has finally decided not to ignore box office fraud in the Chinese market. The Motion Picture Association of America, which represents the interests of six major Hollywood film companies, will hire PricewaterhouseCoopers to conduct box office audits of Hollywood blockbusters released in China. China and the United States will renegotiate film import agreements in the near future, and the audit results are expected to help Hollywood film makers strive for more benefits, including a higher debt-sharing ratio.

Stanley Rosen, a professor of political science at the University of Southern California, said that if PricewaterhouseCoopers can prove that Hollywood has not received its due share of the box office, it can use it as a bargaining chip in negotiations to demand an increase in the box office share of future Hollywood films in the China market."

According to the "Memorandum of Understanding between China and the United States on Resolving WTO Film-Related Issues" signed by China and the United States in 2012, American film companies can receive a 25% box office share in China. The agreement also stipulates that the number of divided films introduced each year cannot exceed 34, which is already an increased number. The agreement will be renegotiated this year, and Hollywood hopes to gain more benefits.

China's film market has always been deeply affected by box office fraud and box office theft. For example, distribution companies sometimes conceal real box office revenue from the box office in order to gain more benefits. For example, the box office of some Hollywood blockbusters will be recorded in local films in China, commonly known as box office theft. A typical method is to write the ticket by hand. The theater will steal the ticket. The movie ticket sold will print the name of a Hollywood movie, but the name of another domestic movie will be written with a pen.

Aynne Kokas, author of "Hollywood Made in China," points out that China's main bargaining chip is the huge box office capacity of the film market. If the growth of this box office figure slows down, it will be in a weak position.

In fact, in the agreement reached between the two parties in 2012, there were provisions stipulating that Hollywood had the right to audit box office revenue, but this was the first time Hollywood had exercised this right.

Hollywood is currently highly dependent on the China film market. To a certain extent, it can be said that China has saved many Hollywood blockbusters that suffered setbacks in the early days of the country, such as "Transformers 5" and "Pirates of the Caribbean 5".

But even so, Hollywood remains cautious about the China film market, in part because of the instability caused by China's political environment and regulatory factors. The U.S. government is also skeptical of China capital entering Hollywood. The radical policies pursued by Trump in power have cast a shadow on cooperation between the two sides.

In fact, China is also aware of the seriousness of box office fraud and has punished several incidents of box office fraud. The transparency of data brought about by online ticket purchase has also made box office fraud increasingly difficult. Earlier, 63 movie theaters that had faked box office were criticized by the State Administration of Film and Television and ordered them to close for 90 days for rectification. Another 63 movie theaters with minor plots were closed for 60 days.

Hollywood's only worry now is whether the audit process goes smoothly, and Tanley Rosen suspects that the most serious and appalling cases of fraud may never be exposed.

Editor: queenie