China passes first film law against box office fraud

China today passed its first film law which promises harsh punishment for firms fabricating box office earnings amid widespread allegations that Chinese film industry is falsifying records in a bid to catch up with Hollywood in terms of revenues.
Film distributors and theaters will have all their illegal earnings confiscated and be fined upward of 500,000 yuan (about USD 73,800) if they falsify ticket sales data, according to the law which was adopted at the National People's Congress (NPC) Standing Committee bi-monthly session after a third reading.
If their illegal earnings exceed 500,000 yuan, the fine will be up to five times their illegitimate earnings, the new law said.

They may also be slapped with an operating suspension or have their business certificates revoked in serious cases, according to the law.
The law is the first of its kind in China which is currently the world's second largest film market.
China's box office takings had already exceeded 38 billion yuan as of October, leading many to speculate that China's market will surpass North America's as early as 2017, state-run Xinhua news agency said today.

Last year, Chinese film industry claimed to have raked up USD 6.3 billion which puts it next to Hollywood whose revenue was stated to be around USD 10.35 billion and far above the estimated USD 2.2 billion of revenue of Bollywood and Indian film industry in general.

Shi Chuan, vice president of Shanghai Film Association, lauded the law calling it "a milestone," as it gave the industry a legal foundation on which it can further develop.
Box office fraud is not a new phenomenon in China, this new law will provide a legal basis for law enforcers and help better protect the interests of the public, Shi said.
In March, the film watchdog suspended the license of a distributor that had inflated box office figures for domestic movie "Ip Man 3."
This case was just the tip of the iceberg, as statistics indicate at least one per cent of all box office takings had been "stolen" in recent years.

There are two ways in which people "forge ticket sales" generally. One, the distributors inflate box office takings to make the film appear popular, thus, attracting more viewers and screenings. Two, theaters conceal their true ticket sales and then pocket the earnings without sharing with the film makers, the report said.
To accurately count ticket sales is of utmost importance to ensure the healthy development of the industry, said Ren Zhonglun, president of Shanghai Film Group Corp.
He said the law was drafted in response to public concern and the stipulations outlined in the law are feasible.