Chapter 882: Movie Ratings

Since theater chains were the ones initiating box-office theft, could production and distribution companies collude with them to siphon revenue from competing films?

This flavor of box-office theft was far from rare. Currently, the standard revenue split in the market across the Pacific Ocean gave theaters fifty-seven percent. That exact percentage was the key to these illicit partnerships.

Suppose two movies premiered simultaneously: Movie A and Movie B. Movie A was an imported Hollywood blockbuster, while Movie B was a big-budget domestic teen romance and inspirational idol flick.

Knowing their film couldn't match Movie A's audience appeal, Movie B's producers would secretly negotiate with the theater chains: siphon some of Movie A's box office to our film, and we will give you a kickback. Through kickbacks and other methods, the producers willingly lowered their own revenue share to incentivize the theaters to help commit box-office theft on their behalf.

Theater chains were profit-driven businesses. Selling a hundred million yuan in tickets and reallocating some of that to a film offering a higher revenue split naturally yielded them higher profits.

As for Movie B, which colluded with the theaters to commit box-office theft, its profit margin might have shrunk, and it might or might not have actually made money, but its official box office was undeniably higher! High box-office numbers influenced the viewing choices of subsequent moviegoers and attracted more favor from capital. The benefits were simply endless...

Duke guessed this was exactly what had happened to The Dark Knight Rises and several other Hollywood films that had suffered box-office theft.

Of course, in the film market across the ocean, besides this active profit-seeking form of box-office theft, there was also a more reluctant variation. Theaters had mandatory screening quotas for certain state-sponsored films, but what if no one bought tickets? Certain departments would lose face. The solution was to secretly siphon a little ticket sales from genuine blockbusters to pad the numbers.

Under these circumstances, the victimized studios could only swallow their anger in silence, not daring to speak out even if they discovered the theft.

If box-office theft was a battle for profit between theaters and studios, fierce competition naturally existed directly among different film producers as well.

What if a movie couldn't beat its rivals? It didn't matter. Just like any other commercial sector, the film industry naturally had its share of cutthroat, under-the-table tactics.

Kickbacks were the most common weapon for suppressing competitors.

Mainstream audiences' viewing choices were easily swayed by theater schedules. A studio would strike an agreement with the theater chains: increase our screen share, and we will give you a kickback so you earn a higher revenue split.

For example, during the opening week of some movie called whatever Time, the studio spent money to buy up large numbers of tickets and book out entire theaters; if the theater's screen share reached forty percent, they gave a one-percent kickback, and if it reached forty-five percent, they gave a two-percent kickback...

As for box office buying, it was also to secure a high screen share and good screening times.

Returning to the earlier example: if Movie A and Movie B premiered simultaneously, they would both fight for lucrative slots like weekend afternoons. Whichever film the theater chains scheduled for these showtimes would gain the initiative.

So Movie B would negotiate with the theaters: we will book out these showtimes entirely and buy up half the tickets for all seats. For the theaters, a studio paying out of pocket to book theaters guaranteed attendance and larger ultimate profits. For Movie B, despite spending money, it bought high early box office and massive attention, giving it the upper hand in the subsequent box-office race.

The film market there operated differently from North America. In North America, production, distribution, and theater chains were forcibly separated. But over there, many conglomerates owned production companies, distribution companies, and theater chains simultaneously, which gave certain people and films much more room to operate.

For example, to claim the number-one spot, the all-time box-office champion from Duke's previous life had resorted to almost every trick. Toward the end, they had blatantly bought their own tickets under the guise of charity screenings.

The studio had bought out these showings themselves under the banner of honoring the elderly and caring for the young. That alone would have been one thing, but to fabricate the highest possible box-office figures within a limited timeframe in their own theaters, they had actually scheduled these charity screenings in the exact same auditorium every ten minutes...

Given that film's runtime, how much box office could they generate in the time it took to play the movie just once?

Actually, to those working in the theater industry, that film's box-office crown was nothing but a joke.

This was also a classic manipulation tactic, and it was hardly an isolated incident for companies with integrated production, distribution, and theater chains.

If you opened a film conglomerate with a production company, a distribution company, and a theater chain, and the movie you invested in was aiming for the highest-grossing spot of the year but was projected to fall three hundred million short, what would you do?

Set up fake showtimes and manipulate the numbers. After all, most of the money was just moving from the company's left pocket into its right.

And the cost? Fabricating 300 million yuan in fake ticket sales would require a payout of three hundred million multiplied by 8.3 percent, equaling 24.9 million yuan. That 8.3 percent was exactly the national film development fund and taxes they had to pay to the state.

A small cost for massive prestige. That was the choice the studio behind that champion film had made.

Blatant box-office forgery like this—where the studios barely even covered it up and forcefully defended themselves afterward—was just one symptom among many chaotic phenomena in this rapidly developing yet messy market.

Much like in Hollywood, many film companies would stop at nothing for profit and box-office numbers.

Whenever a film proudly declared at its Premiere that it would rake in one or two billion at the box office, netizens would just share a knowing laugh—to make the numbers look good, they would stop at nothing.

Box-office theft had long been an unwritten industry rule that ambitious executives knew by heart. Inside the industry, if you didn't steal box office, you were too embarrassed to even call yourself a filmmaker.

Underreporting box office, slipping "red envelopes," and offering "high kickbacks" to secure more showtimes... Perhaps the box-office opportunists were holding regular topic-selection meetings just to research new tricks for box-office theft.

For example, according to a report submitted to Duke by the Warner Greater China Region, "ghost screenings" had become the new driving force for forgery in the film circle across the ocean under the cover of night.

Just like that champion film, the films suspected of holding "ghost screenings" generally chose the early mornings or midnights when theaters were not operating. They would schedule a fake showing every few tens of minutes, turning them into "sold-out shows" on the books. Alternatively, producers and distributors would pay out of their own pockets to create the illusion of high attendance during golden hour. Their singular goal was to rapidly inflate the box office, stimulate bandwagon viewers, and manufacture the false impression of a massive hit, all to increase the screen share for the opening week and beyond.

This kind of chaos naturally triggered Hollywood's vigilance. The MPAA not only engaged in formal negotiations with the relevant departments across the ocean, but also established a dedicated Asia-Pacific branch specifically to handle market disputes across the Pacific Ocean.

Every film market needed a developmental stage from its inception to maturity. Duke understood this perfectly, so even though he knew how chaotic that market was, he never had any thought of abandoning it.

Furthermore, the relevant departments across the ocean were also introducing related laws and measures to make this industry more regulated.

For instance, after Duke and Warner Brothers submitted their protests, the person in charge of a certain big scissors publicly stated that they would treat the phenomenon of theater box-office theft based on facts and punish it according to regulations, with absolutely no pardons.

The Film Distribution and Exhibition Association across the Pacific Ocean would also regularly publish the names of theaters caught committing "box-office theft," and all would be published with their real names. Violating theaters would face massive fines, a four- to six-month suspension of film supply, and the cancellation of their eligibility for all "collect first, refund later" subsidies and rewards for the year.

The big scissors was even preparing to establish a dedicated ticket-monitoring company to conduct nationwide audits.

Beyond establishing a ticket-monitoring company, they were also introducing measures to encourage ordinary audiences to provide supervision. Photos of theaters altering film titles themselves and handwritten tickets would all serve as evidence for the Film Bureau to handle offending theaters.

These were all gratifying developments that would allow market regulations to be further perfected.

Following that, the MPAA once again proposed a movie rating system to the big scissors across the ocean, but was rejected yet again.

"A movie rating system clearly has its benefits."

Scarlett Johansson, who had just returned from Tennessee, flipped through some letters the housekeeper, Emma, had just delivered.

"Why do they keep refusing?" she asked Duke, who was sipping tea on the terrace.

Duke shrugged. "Who knows?"

The big scissors didn't want a rating system or any dividing lines because, no matter who it was for, they never wanted to be seen as permitting pornography or violence. Their restrictions on film and television content reflected the various anxieties of the ruling class over there: content must not "harm" unity, security, and honor, nor should it "distort" history, feature explicit sexual or gambling scenes, advocate "religious supremacy," or include "meticulous depictions of fortune-telling and praying to the spirits."

In theory, all of these were prohibited.

To a certain extent, a movie rating system could lead to the gradual legalization of pornographic and violent films, which was a fact that could not be ignored.

Of course, some reasons weren't critical, but could barely be counted among them.

For instance, this didn't align with the big scissors' demand for a one-size-fits-all approach. Ratings meant having standards, and having standards meant things couldn't be too outrageous. For some movies they didn't want released, under a rating system, they would have to struggle to find suitable reasons and excuses. But as things stood now, if someone wanted a certain movie not to be released, it wouldn't be, and the excuse was simply that it was inappropriate.

Regardless, movie ratings were fundamentally a false proposition across the Pacific Ocean, and there was no need to fight for them. It would be too difficult for the films of directors like Quentin Tarantino to ever appear in that market. Even if they were imported, the big scissors could issue an emergency notice to pull them from theaters right in the middle of a screening.

Duke couldn't explain these things clearly to Scarlett at all, so he simply couldn't be bothered to try.

Scarlett Johansson tore open something that looked like an invitation, her expression turning slightly strange.

"These adult associations actually sent you an invitation?"