Back in 1999, Taiwanese actress-singer Rene Liu released a song in which she lamented young love. It went on to become a huge hit. So popular, in fact, that when Liu, 48, was thinking about a story for her directorial debut, she decided to make a film inspired by the song.
Us and Them, which was released in late April, struck a chord and became the cinema surprise of the Labour Day holiday. The romantic drama, which follows the love story of two migrant workers in Beijing, made over Rmb1 billion ($157 million) since its release. That figure rendered Liu the highest grossing female filmmaker in China, surpassing previous record holder Xue Xiaolu, who pulled in Rmb785 million with Finding Mr Right 2 in 2016.
But what many hadn’t anticipated was the controversy the film would stir beyond the box office.
Us and Them sold over Rmb120 million ($18.91 million) worth of pre-sales tickets in the week leading up to its release, a similar figure to Hollywood blockbusters like The Fate of the Furious. And while the Labour Day holiday is one of the busier moviegoing periods, the strength of the pre-sales figures caught the industry by surprise. After all, it was hard to believe that a “small drama and small budget film” could fend off some seriously strong competition during the holiday period, pondered Southern Metropolis Daily.
Liu’s debut film was up against crime drama A or B, starring A-listers Xu Zheng and Wang Likun, and the action flick Genghis Khan. In fact, over the three-day holiday period six new films were released.
By the end of its first day of release, cinema operators were noting something else that was different for Us and Them: how many of its pre-sales tickets had been refunded.
According to news outlet Mtime, nearly 4,000 theatres had to refund tickets that were sold online, and the total number of refunded tickets was estimated to be 200,000, costing between Rmb14.3 million and Rmb19.3 million.
Wanda’s cinema chain said it had refunded 90,000 tickets alone, while other chains admitted to being perplexed about the surge in refunds. Normally, refund rates average no more than 0.3%, but Us and Them was reporting a whopping 6% return rate.
Before long, there were allegations that the pre-sale tickets had been purchased to generate buzz around the film and to pressure cinemas into allocating more screens in its opening week.
“Cinemas always put profits as the priority,” Yang Jinsong, an independent film industry analyst told the China Daily. “They were encouraged to arrange many resources for this film by the outstanding pre-sale performance.”
Indeed, cinema managers expanded the number of screens dedicated to the film from 144,000 on Saturday to 162,000 on Sunday. Us and Them claimed an estimated 51% of all screenings that weekend across the country, muscling out the other new releases.
Manipulating the box office is nothing new in China. Two years ago the martial arts film Ip Man 3 made headlines because its distributors were accused of inflating ticket sales with “ghost screenings,” that is, buying all the tickets for screenings even after the theatres had closed.
Even though regulators have cracked down on box office fraud – including rules that penalise theatres accused of underhand practices – distributors are creative types, and always ready to find ways to skirt the regulations.
This time round it was the ticket platform Maoyan under suspicion, after reports that it had refunded over Rmb13 million worth of tickets on the film’s opening night.
Maoyan certainly had the commercial incentive to make Us and Them a hit – it also happens to be a producer and the promoter of the film. But it issued a statement addressing suspicions that it was behind the box office malfeasance, maintaining that it wasn’t responsible for the high number of refunds and that it was cooperating with authorities to investigate the matter.
Not everyone was convinced. “Like other third-party platforms, to orchestrate such a large-scale ticket purchase and refund, it [Maoyan] only needs to tweak a few things in the back-end to manipulate the numbers,” an industry observer told Entertainment Capital, a film sector blog.
Maoyan then followed up with a second statement, hoping to offer some fresh insight on the situation. It claimed that changes to tickets — for instance, customers switching to different showings of the same movie — accounted for 54% of its refunds (which means that the underlying spending still took place).
The remaining 46% of pre-sales purchases, Maoyan suggested, could have been the work of ticket touts.
Most of the tickets that were refunded were discounted ones that cost just Rmb19. But Maoyan’s critics have countered that the scalping like this, especially on this scale and with this level of organisation, is rare. “Do you know anyone that would go to all this trouble to buy a ticket for Rmb19 only to sell it for Rmb35. The margin is too low for that amount of risk,” Entertainment Capital scoffed.
Still, the case does reflect how powerful the online ticketing platforms have become. As WiC reported back in issue 390, online channels now account for 80% of cinema seat sales in China. But the challenge now is re-establishing some trust between the online platforms and cinema operators. “The only way to predict whether a film is going to succeed in the box office is from the pre-sales. It has become an important reference point for cinema managers as they decide how many screens to allocate for a film. But in the future if other online ticketing platforms try a similar tactic, who is going to trust these pre-sale figures?” another cinema insider told Southern Metropolis Daily.
© ChinTell Ltd. All rights reserved.
Sponsored by HSBC.
The Week in China website and the weekly magazine publications are owned and maintained by ChinTell Limited, Hong Kong. Neither HSBC nor any member of the HSBC group of companies ("HSBC") endorses the contents and/or is involved in selecting, creating or editing the contents of the Week in China website or the Week in China magazine. The views expressed in these publications are solely the views of ChinTell Limited and do not necessarily reflect the views or investment ideas of HSBC. No responsibility will therefore be assumed by HSBC for the contents of these publications or for the errors or omissions therein.