Biz concerned about under-reporting

LONDON — The Russian government is considering introducing a centralized automated system to ensure cinemas correctly report box office sales.

Under amendments to the national cinematography law that came into force earlier this year, exhibitors are required to accurately report tickets sales.

But industry concerns over widespread under-reporting — with some cinemas concealing full box-office figures by between a third and half in order to keep a greater share of receipts — has prompted proposals for the introduction of a nationwide computerized system.

Draft regulations propose setting up a centralized database to receive hourly updates on box-office sales.

Exhibitors and cinema operators would be responsible for installing approved equipment themselves. Market participants would be able to access the information free of charge.

General information on box-office sales in larger cities would be made publicly available.

Small, municipally owned cinemas would be able to supply the information in written form to prevent them bearing excessive costs, the draft regulations say.

Producers and distributors have long lobbied for a more transparent system of box-office reporting in Russia, where currently around 50% of receipts are kept by cinemas, 40% by producers and the rest by distributors and other intermediaries.

Paul Heth, CEO of Kino Star, one of Russia’s leading cinema chains, welcomed the proposals.

“This will encourage transparency, although it will do nothing to solve the problem of theaters allowing customers to bypass the box office.

“Distributors can tell which theater chains are transparent and which are not by looking at comparative box-office figures and really ought to do more to police this themselves.”

Kino Star, which uses Rentrak systems to track box-office receipts, was proud of its transparency and moves toward greater transparency could only help support the development of Russia as one of the world’s leading film markets, Heth added.

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