A new regime for cinema ticket prices?

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A couple of days ago, SARFT sent an opinion-seeking draft of a new regulatory document (Guiding Opinions Concerning Further Standardizing Film Market Ticketing Service Management) to the China Film Distribution and Screening Association and the China Film Producers’ Association.  First and foremost, it includes a bid to shift from a system with official minimum prices, to a system where the sector associations will have to set a maximum ticket price. At present, ticket prices in China are about 80-100 Yuan per film, while a survey in the annual Film Sector Report indicates that consumers generally are willing to pay 45 Yuan.

 

Article 1 of the proposed Opinions states that “The China Film Distribution and Screening Association and the China Film Producers’ Association must divide the entire country into a number of regions according to factors such as the economic development level of all localities, the urban population numbers and cultural consumption habits, etc., and respectively formulate guide prices for cinema ticket, the guide price is the highest retail price for one film in every region, and normal film prices may not be higher than the guide price”.

 

This move is not strange, given that high ticket prices are often quoted as contributing to piracy, and recent media policy has stressed that preferential ticket prices must be made available to selected segments of society, as a social service. Industry insiders also consider this to be an effort to gain control over the “chaotic film ticket market”. Special films, such as 3D or IMAX films, or tickets in VIP booths may be “appropriately higher”, although it is advised that the difference with the guide price is not more than 50%. Linked selling is prohibited (possibly because it is one very popular method of ticket fraud), and that the indicated price must be reported as box office income.

 

However, Article 5 of the proposed Opinions states that “In order to effectively restrain the phenomenon of empty high prices, avoid unfair competition, and protect the lawful rights and interests of rights holders, it is proposed that the price of preferential tickets such as member tickets, group tickets, etc. may not be lower than 70% of the advertised film price. ”

 

At this time, there seem to be two film ticket markets: one with advertised prices and one with preferential prices. Obviously, this sort of thing is widespread in China, in most economic sectors. Apparently, in Shanghai, the average price paid for a ticket is about 40 Yuan. In other words, perhaps this new regime may have the unintended consequence of actually raising the ticket prices that people really pay, instead of lowering the official prices. In any case, it is hoped this will provide a barrier against blatant underreporting of box office income, preserving the cut of distributors and producers.

 

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