China Ticket Sales Underreported by Up to 9%, Audit Finds

Movie ticket sales in China were underreported by up to 9% last year, according to the findings of an audit being conducted for the the Motion Picture Assn. of America, a source familiar with the study said Tuesday, confirming an earlier Wall Street Journal article.

The paper said that underreporting in 2016 accounted for $40 million or more of lost revenues for U.S. studios. The alleged fraudulent activity uncovered by auditors at PricewaterhouseCoopers includes audience numbers being recorded inaccurately and legitimate sales logged as concessions.

Variety reported earlier this year that Hollywood was adopting a tougher stance on ticketing fraud in China, having previously taken a softer approach for fear of causing friction in the huge Chinese market. The PwC report should provide ammunition for that effort.

It emerged in June that the MPAA had tapped PwC to take a closer look at the box office results of certain titles. The report is still being finalized, with an early draft version circulated among the studios, the source familiar with the audit said. 

News of the audit’s results comes at a crucial moment, with Hollywood set to renegotiate the share of local gross box-office receipts for imported titles in China. The current agreement dates back to 2012. As well as mandating that studios get 25% of ticket receipts, the agreement restricts the number of imported titles that can play in China.

Popular on Variety

Chinese authorities have taken steps to crack down on ticket fraud, but the PwC findings suggest there is still an issue. The Chinese market has assumed greater importance for Hollywood studios in recent times, in effect rescuing some titles that have registered middling or poor performances domestically and in other international markets.

Gene Maddaus contributed to this story. 

More Film

  • The Invisible Man

    Box Office: 'The Invisible Man' Eyes $20 Million-Plus Debut

    With “The Invisible Man,” a terrifying thriller starring Elisabeth Moss, Universal is attempting to revive the cinematic prospects for its classic monster properties. After “The Mummy” with Tom Cruise flamed out theaters in 2017, the studio scraped its plans to form an interconnected Dark Universe and instead retooled its vision to create standalone stories unique [...]

  • Dau

    'Dau' Director Defends Controversial Russian Competition Film: 'It's not Hollywood'

    “Dau. Natasha,” the Russian art project-turned-movie franchise competing at the Berlinale, has triggered headlines in the local and international press over the years due to its epic scale, scenes of graphic violence and anecdotes of an allegedly oppressive work environment for women. Hours before the film’s premiere at a presser on Wednesday, Ilya Khrzhanovsky, who [...]

  • The Trouble With Being Born

    Sandra Wollner on Berlin A.I. Drama 'The Trouble With Being Born'

    At first glance Elli appears to be a normal young girl living with her single father, spending idle afternoons lazing by a sunlit pool. But a disturbing reality is soon revealed: Elli is actually an android whose memories were programmed by the man she lovingly calls “Daddy.” Before long the true nature of their relationship [...]

  • Legendary Entertainment Hires Matthew Erramouspe Chief

    Legendary Entertainment Hires Matthew Erramouspe as Chief Legal Officer

    Legendary Entertainment has appointed veteran sports-media attorney Matthew Erramouspe to the newly developed role of chief legal officer and executive VP. Erramouspe has been co-chair of O’Melveny & Myers’ Entertainment’s Sports and Media practice group. He will report to Legendary’s CEO Joshua Grode and work closely with the heads of Legendary’s business units. “Matthew has been [...]

  • The Roads Not Taken

    'The Roads Not Taken': Film Review

    In 2013, Sally Potter lost her younger brother, artist and musician Nic Potter, to early onset dementia, although the disease is so cruel, one could say that she began losing him a couple years earlier — that he started to disappear on her in 2010 — and that her film “The Roads Not Taken” is [...]

More From Our Brands

Access exclusive content