Investors in China’s growing movie economy are buying up swathes of empty seats in cinemas to help bolster their companies’ share prices, according to a new report.
An investigation by the BBC reports that the practice of faking box office sales is widespread, and that Chinese regulators are now investigating the practice.
It’s claimed that investors have been buying out ‘entire late night screenings’ to make movies seem more popular than they are, leading to a bump in share value, despite some screenings being completely empty.
Chinese movie critic and industry commentator Raymond Zhou told the BBC: “When you have a hit film, your stock price will go up several times in terms of market valuation compared with the grosses from the box office so some ‘financial genius’, came up with this idea: Why don’t I have fake box office numbers so that I can make much more money from the stock market?
“The natural way is to make a good movie and then your stock price will go up right?
“But some people have reversed this equation. They have seen the rise of the stock price as the ultimate goal and have just used the making of the movie as an excuse.”
But the authorities are now taking action, with the National People’s Congress introducing fines between $7000 and $74,000 for misrepresenting box office figures.
It’s is also allowing the Motion Picture Association of America to audit Chinese box office data.
Meanwhile, according to anti-corruption investigators in the Community Party, it’s also on the trail of one high-profile Chinese movie producer who has been accused of fraud, and is thought to be on the run in the US.
It follows news that one of the biggest Chinese movies ever made, the fantasy epic Asura, made for a record-breaking $100 million, was pulled from cinemas in July following a disastrous opening weekend, during which it made only $7 million.
It’s producers said it plans to make changes to the film, and then re-release it.
Last year, Chinese-produced action movie Wolf Warrior 2 made almost £600 million alone, putting it ahead of the domestic gross of James Cameron’s Avatar, the highest-grossing movie of all time.