China’s SAPPRFT announced that it has already punished 326 cinemas across the country for illegal business practices under the newly enacted Film Promotion Law, less than a month after it came into effect.
The cinemas are accused of under-reporting or mis-reporting revenue ranging from RMB100,000 to RMB1 million. 63 cinemas that mis-reported over RMB1 million in revenue have been forced to suspend operation for at least 90 days, and the operators must re-apply for screening licenses after making necessary adjustments.
63 other offenders that mis-reported RMB500,000 to 1 million in revenue have been forced to seize operation for 60 days. 110 cinemas that mis-reported RMB100,000 to 500,000 will have to pay a fine of RMB200,000. 90 cinemas that mis-reported less than RMB100,000 have been given warnings.
Wenzhou Yandang Movie Circuit and Jiangxi Xinghe Cinema Circuit were especially called out by SAPPRFT for having the most number of offending cinemas. Both chains may not add any new establishments during the suspension period.
The cinemas were punished under article 51 of the new Film Promotion Law, which targets actions like box office gouging. Local media and netizens revealed in recent years that cinemas under-report or manipulate box office revenue with actions such as printing out tickets to other films (replacing the printed film name with a handwritten ticket) or intentionally lowering ticket prices so that it could pocket a larger percentage of revenue by charging various administration fees.
While the new Film Promotion Law set out to simplify certain production and censorship procedures, it also took a hard stance on piracy and shady business practices by cinemas. It was passed in mid-November 2016 and officially went into effect on March 1st.