China Punishes 'Ip Man 3' Distributor Over Box-Office Fraud

A government investigation discovered that at least $8.7 million in tickets sales were fabricated.

China's media regulators have cracked down on film distributor Beijing Max Screen for gaming the box office to boost the performance of martial arts movie Ip Man 3.

After admitting to inflating ticket sales by as much as $8.7 million, Max Screen has been slapped with a one-month ban from releasing movies, according to the state news service Xinhua.

Ip Man 3, starring Donnie Yen and featuring a fight scene with Mike Tyson, debuted to a blistering $71.5 million over three days, but allegations of fraud descended upon the film just as swiftly.

Film industry observers and ordinary moviegoers reported suspicious patterns in the movie's screening schedule throughout its opening weekend at the beginning of March. Several of China's top mobile ticketing apps — which is how over 70 percent of Chinese movie tickets are now bought — showed sold-out Ip Man 3 screenings running every 10 minutes until 3 a.m. at some cinemas, an impossibly frequent schedule.

The Chinese State Administration of Press, Publications, Radio, Film and Television soon launched an investigation, discovering that more than 7,600 of the screenings were fabricated. In addition to slapping Max Screen with the one-month ban, the bureau issued formal warnings to three mobile ticketing services involved in the scam, as well as to 73 cinemas. In a push to prevent repeat offenses, the China Association of Film Distributors and Cinemas named and shamed the offending companies on its website.

After initially denying wrongdoing, Max Screen said in a statement that it had "studied and fully accepted" the punishment.

The Chinese film sector is growing at a historic rate — by mid-2017, China is expected to surpass North America as the largest theatrical market in the world — but the industry's hot streak has been marred by recurrent box office fraud. Cinema chains have been known to under-report and embezzle ticket revenue. At other times they have colluded with distributors to boost the perceived performance of movies, making them appear like a runaway hit, as in the Ip Man 3 case. Occasionally, government parties have been an active participant in the fraud, forcing private cinemas to guarantee the success of drab propaganda pictures at the expense of commercial movies.

"These kinds of issues could be considered inevitable in a young industry, but box office fraud has become so serious that it is harming Chinese cinema," said Zhang Hongsen, head of the film bureau.