An audit conducted for the Motion Picture Association of America (MPAA) has determined that Hollywood is being shortchanged by millions of dollars at China’s box office, the Wall Street Journal reports.
Auditors at PricewaterhouseCoopers concluded that ticket sales in China were underreported by about 9 percent last year, the report said, citing people familiar with the matter.
That translates into at least US$40 million in lost revenue for the six Hollywood studios that make up the MPAA, according to a Journal analysis of last year’s box-office take.
Box office data shows their films grossed at least US$1.87 billion last year in China. Under an existing arrangement, the studios’ share was 25 percent of those receipts.
Auditors discovered irregularities such as revenue categorized as concession rather than ticket sales, screenings that went unreported and audience sizes that were underreported, the report said.
The MPAA and its auditors presented the results last month to state-backed China Film Group, which distributes most movies in the country.
China Film representatives were receptive, but said only a higher government authority could enforce stricter controls on theaters, according to the report.
The state-backed distributor will however meet the parties again for another discussion later this month.
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