Introduce international audit institutions to monitor the box office of China's film market. What is the competition between China and the United States?

China Film Group, the only domestic film import rights, signed a "Cooperation Agreement on Import and Distribution of Shared Films" with the Motion Picture Association of America (MPAA). Details of the agreement have not been disclosed.

President Xi Jinping visited the United States not long ago, which brought about phased progress in the new round of WTO negotiations that China films are about to face. China Film Group, the only domestic film import rights, signed a "Shared Film Import and Distribution Cooperation Agreement" with the Motion Picture Association of America (MPAA). Details of the agreement have not been disclosed to the public, but according to the Hollywood Reporter (The Hollywood Reporter) recently reported in a report titled "Accused of Hidden Money, China Agreements to New Rules in Secret Hollywood Summit". Reliable sources said that in response to multiple demands put forward by the United States, China will make two key concessions:

1. Introduce an international audit agency to supervise the box office of the Chinese film market;

2. Increase the number of approved films introduced from China (approved films refer to the introduction model in which domestic film companies buy out the right to show films at a fixed price without sharing them with foreign companies, and is not affected by quotas but is limited in quantity).

The appeal of the China market to the United States is self-evident. As the world's second largest market, it is already a more important source of box office recycling for many Hollywood blockbusters than the domestic market in the United States. However, in recent years, it has been common for Hollywood films to encounter hidden box office incidents in China's market. Presumably, this is the fundamental reason why the United States insists on introducing international audit institutions to supervise the box office of China film market in order to eradicate persistent diseases and protect the interests of American production companies.

Hollywood complained repeatedly. The management department

issued repeated orders and orders. At the end of August this year,"The Battle of the Hundred Regiments" was released. It was widely rumored in the market that the official order required all theaters to ensure the box office of "The Battle of the Hundred Regiments", prompting some theaters, especially state-owned theaters, to support "The Battle of the Hundred Regiments" in order to complete their tasks, and even violated regulations in box office settlement. One of the imported films in the same period that was greatly affected by this was Paramount's "Terminator 5". According to The Hollywood Reporter, the film lost nearly $11 million in box office.

It is not uncommon for the box office of imported division-account films to encounter a paradoxical situation due to the release of key themes. For example, in the summer of 2011, four years ago, when "Transformers 3" was released, there were two main themes films in the same period,"Flying Sky" and "Yang Shanzhou". I thought that "Transformers 3" would embarrass the two main theme films. Unexpectedly, the two films would be almost unscathed and have also achieved great results repeatedly."Flying Sky" exceeded 50 million yuan and "Yang Shanzhou" exceeded 100 million yuan. However, some media investigations found that at that time,"Transformers 3" and "Yang Shanzhou" were "bundled" together in many theaters across the country. Audiences purchased movie tickets for 80 yuan. On the same ticket stub,"Yang Shanzhou" was priced at 60 yuan, while "Transformers 3" was only 20 yuan. This kind of "bundled" sales usually takes place in two modes: "consecutive ticket sales"(i.e., two films are shown in a double) and "package sales"(i.e., one ticket can watch two films in different time periods).

"Speed and Furious 7", released in April this year, set a number of records in the China market. However, it was reported that the film's box office encountered a statistical error. International box office Box Office Mojo estimated that the film created US$390 million in China. According to the Hollywood Reporter, the data provided by China officials to Universal Pictures was nearly US$30 million short. "Speed and Furious 7"'s box office record of 2.4 billion yuan was not finally broken until the domestic special effects blockbuster "Monster Hunt" released in July after the key was extended multiple times.

In fact, the industry management department has always abhor cheating on box office, and has repeatedly issued orders to rectify the market.

In April 2015, China Film Distribution and Screening Association and China Film Producers Association issued a notice of punishment for 21 cinemas including Henan Xinmi Pyramid Studios for secretly leaking and concealing box office. Among them, 12 cinemas and their affiliated cinemas were suspended from supplying films for at least three months, 9 cinemas were fined 8-10 times the amount of the ticket money, and these 21 cinemas 'special funds for films this year were cancelled. Qualification for refunds.

In January 2015, China Film Distribution and Screening Association exposed 10 reported serious violations of movie theaters, distributed in different provinces. The violations were generally the use of dual-system ticket sales, the use of "reservation" ticket sales to conceal box office, the use of manual tickets, etc. The ultimate goal is to withhold ticket money and conceal box office money. Among them, two theaters stole the box office against "Wisdom Tiger Mountain 3D" and "One Hundred Thousand Cold Jokes" respectively.

In May 2014, China Film Distribution and Screening Association once again issued a report on the handling of many theaters 'bad behaviors of illegally stealing box office. The cinemas involved this time include 11 cinemas including China Film Cana International Studios in Shucheng, Lu 'an, Anhui, Zhuanghe Haitian Theater in Dalian, Liaoning, Shanghai Juying International Studios, and Guangshan Oscar Studios in Xinyang, Henan. Among them, seven theaters illegally use the "dual system" to print and sell movie tickets, and these seven theaters will be severely punished by suspending film supply indefinitely.

In February 2014, China Film Distribution and Screening Association and China Film Producers Association jointly issued a notice announcing that 15 cinemas that have violated and concealed box office behaviors to varying degrees will be punished, including Laizhou Theater in Shandong, Time Warner International Studios in Linfen, Shanxi, and Wanning Huaying Film City in Hainan. Some cinemas that violated regulations were suspended for one month, while some were suspended for an "indefinite period." The time for resuming film supply depends on the rectification situation.

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The continuous upgrading of independent technology for box office supervision

In addition to severe punishment, industry management departments are also constantly upgrading their technology.

In February 2012, the National Film Ticketing Comprehensive Information System (referred to as the new platform) was launched.

At the end of 2013, the Special Funding Office and the Film Research Institute conducted another large-scale revision of the technical specifications and issued the "Technical Requirements and Measurement Methods for Cinema Ticket Management Systems."

At the beginning of 2014, due to the theft and concealment of box office by cinemas in 2013, resulting in losses of more than 5 billion yuan. In order to purify the market, the Film Bureau of the State Administration of Press, Publication, Radio, Film and Television issued the "Notice on Strengthening Film Market Management and Standardizing the Use of Film Ticketing Systems."(Xindian Television Development No. 201412) Strengthen the management of film ticketing information; subsequently, China Film Distribution and Screening Association and China Film Producers Association issued notices in February, May and December respectively, severely punishing a total of 43 theaters that stole box office.

From May to October 2014, the national movie box office information system underwent its third large-scale upgrade. The newly upgraded system was named the "2014 National Film Ticketing Comprehensive Information Management System."

On September 16, 2015, the State Administration of Press, Publication, Radio, Film and Television issued a notice again emphasizing the newly revised "Measures for the Management of the Collection and Use of Special Funds for the Development of the National Film Industry"(hereinafter referred to as the "New" Measures for the Management of Special Funds for Film "or the" New "Measures") will be officially implemented starting from October 1, 2015. Compared with the pre-revision "Measures for the Management of Special Films Funding", the new "Measures" further strengthen the supervision of special funds and box office revenue based on the current market development situation.

On October 2, 2015, the real-time data platform for the box office of specially funded movies, which had been canceled for nearly a year, was finally launched. This not only means that box office data is finally accurate and transparent, but also that movie theater supervisors can go to the theater to monitor the actual situation as soon as possible based on the data on the platform to prevent stolen box office.

The US share ratio has experienced an obvious increase and a hidden decline?

In addition to being repeatedly questioned at the box office, the United States has also been quite dissatisfied with the settlement of sub-accounts in recent years. In 2012, Xi Jinping, then Vice President of the State, visited the United States and signed the "China-US Film Agreement" with the United States. What the United States achieved was that the proportion of movie box office accounts increased from 13%-17% to 25%, and the number of imported films increased from 20 to 34, and the number of imported batches was expanded. Since the introduction of imported sub-accounts in 1994, the United States has significantly increased its share of sub-accounts for the first time in the past 20 years. It must be a surprise for the Hollywood Eighth Congress.

However, a year later, in 2013, foreign media reported that Hollywood film companies accused the Chinese company responsible for imported films of defaulting on nearly tens of millions of dollars in film payments because China required Hollywood film companies to pay a 2% value-added tax, which caused dissatisfaction among the six major Hollywood film companies. At that time, it coincided with the reform of China's tax system. The pilot program of changing business tax to value-added tax was applied to the field of film import and export, which meant that a 2% new tax burden (value-added tax) would be generated, and who would bear it became the focus of controversy. China believed that the 2% should be borne by the United States, so the original 25% share ratio of the United States was correspondingly reduced to 23%. This naturally made Hollywood quite dissatisfied and refused to accept this change, so the settlement of accounts could not be implemented.

At that time, the imported sub-accounts affected by this included "007: The Sky Break","Superman: Body of Steel","Star Trek: Darkness and Boundless", etc., and it is reported that the sub-accounts involved exceeded 770 million yuan.

Behind concessions, or another kind of "progress"

, it is impossible to present a one-sided situation in terms of the trump cards and chips of both parties to the negotiation. Different from the weak domestic U.S. market, China's film market stands out in the global market, and its value is related to the future of Hollywood. Whether it is referring to France's protection of the local film market based on cultural exception policies, or China's increasingly tough stance and strength in global trade, the United States 'wishes may not be achieved overnight. It can only be continuous "progress," but at every stage, there must be some concessions and concessions. The same is true for my country, which uses retreat as advance to deal with the pressing United States and buys time to strengthen local films.

Judging from the two currently rumored concessions, the first concession has no disagreement with China's interests on the one hand. The industry management department has been emphasizing and promoting a more standardized market order in recent years. On the other hand, the introduction of international audit institutions to ensure the accuracy of the US box office data has also achieved the effect of "increasing" the share ratio to a certain extent;

the second concession actually fully liberalizes the upper limit of import shares. In name, the entry threshold for the Chinese market has been greatly reduced, and the US has more opportunities to export its productions. Of course, how much the Chinese domestic market introduces does not depend on whether the policy is limited, but how much the market can digest. The competitiveness of the batch is generally not enough to threaten excellent domestic productions. Although the threat to the local market exists, it may not be enough to panic.

As far as the United States is concerned, these two "progressives" are derived from practical benefits, and should be enough for it to enjoy for a while. As far as China is concerned, these two "concessions" must be another kind of "progress" that negotiators have strived for in order to stop the US's desire to increase import sub-account quotas or increase larger quotas. If this is the case, China film companies may have won another buffer period. At a time when domestic films are becoming increasingly self-reliant, there is reason to foresee that China film companies will continue to forge ahead and make further progress on the journey of resisting the impact of Hollywood.

Wen| Chen Changye, Zhang Ning

Editor: yvonne