7 ms·

Movie madness: Why Chinese cinemas are empty but full

100 points by nicolas_t 8y ago

seanmcdirmid 8y ago
I thought the Chinese government put a stop to mass phantom ticketing a couple of years ago? Either the party didn’t do a good job or western news sources are incredibly late in reporting on scandals in China.
- Nasrudith 8y ago
  It is the Chinese government - they are legendary for their lack of transparency and considering having a problem known a bigger problem than a problem not being known. Not to mention crackdowns and enforcement have proven quite cyclic for things like pollution control.
- paradite 8y ago
  Likely they are late to the party. The article itself doesn't have any concrete examples or references to timelines. It just describes the general problem, which has been done by Chinese media since 2016: http://www.chinanews.com/m/yl/2016/08-29/7987022.shtml http://www.chinanews.com/m/yl/2016/08-29/7987022.shtml This article has a summary of timeline (as an image in Chinese), notice the last update was around Apr 2018, which is the latest news that I could find related to phantom bookings: https://m.huxiu.com/article/242292.html https://m.huxiu.com/article/242292.html Nevertheless, it is also true that the problem hasn't been solved as of Apr 2018.
joejerryronnie 8y ago
I'd be more concerned about the entire cities that are empty.
- deleted 8y ago
  [deleted]
- seppin 8y ago
  Fake news? Fake city.
- azurezyq 8y ago
  Here's some recent update: https://www.forbes.com/sites/wadeshepard/2016/04/19/an-update-on-chinas-largest-ghost-city-what-ordos-kangbashi-is-like-today/ https://www.forbes.com/sites/wadeshepard/2016/04/19/an-updat... Tldr: it's fine and there are people.
  - Retric 8y ago
    the place is now roughly one-third full aka still basically a ghost town. These buildings are aginging rapidly while mostly unoccupied, which is a huge waste of resources.
    - mavhc 8y ago
      Why are they aging more rapidly than occupied buildings?
      - lithos 8y ago
        Air conditioning, heating, airflow, controlling pests, cycling water out of pipes/vents, and noticing problems like burst pipes. Quality is also abysmal to start with. Looking at some buildings in decay they seem like movie/theme park sets.
      - rasz 8y ago
        https://www.youtube.com/watch?v=XopSDJq6w8E https://www.youtube.com/watch?v=XopSDJq6w8E
oh_sigh 8y ago
This sounds like the exact kind of thing a hedge fund might investigate and short stocks on.
- seanmcdirmid 8y ago
  Shorting still isn’t allowed in the Chinese stock market, I think. Anyways, it isn’t a very patriotic thing to do.
  - cm2187 8y ago
    > Anyways, it isn’t a very patriotic thing to do. Why? There is a national pride in irrational stock market bubbles?
    - 9712263 8y ago
      A patriotic Chinese should support their countries' stock when they are going to drop. Well, at least the propaganda said. Because most large firm in China are either state-owned, or having large portion of stock owned by state. Anyway, Chinese government banned some large stock holder to sell their stock in previous nearly happened financial crisis. It's a terrorism against Chinese government if you do that.
    - currymj 8y ago
      Your average person even in the US feels that there is something unsavory about short selling, like they are saboteurs, gleefully profiting off destruction. Even people you'd expect to be more sophisticated feel this way; I don't want to bring up one company in particular that inspires a lot of weird conspiratorial thinking about short sellers in tech-person-type settings.
throwawayperson 8y ago
Money laundering
lordnacho 8y ago
> Yet the authorities have now worked out that if a showing is somewhat empty in the middle and for some reason all the seats around the walls have been purchased something must be amiss. Sounds like you'd have to investigate very thoroughly to know this? You'd have to have the numbered layout of every cinema, along with the ticket sales data. I mean it's not like you couldn't do it, but if you had a data scientist is that what you'd make him work on?
dagi3d 8y ago
Similar situation happened in Spain. Here the film industry is heavily subsidized for local movies, not only in form of tax benefits but grants. The thing is that in order to get that cash a minimum of sold tickets are required, so a bunch of producers have systematically bought those tickets in cinemas located in small cities or towns
- liftbigweights 8y ago
  In the US, we used to have NFL blackout games. If the football game wasn't soldout, the NFL wouldn't broadcast it on TV. So local businesses or the wealthy would buy the unsold tickets so that us poor peasants could get to see the game on TV. I don't know any games that were actually blacked out since football is so popular and most games get soldout before the season starts. But once in a while news of the potential of a black out game spreads and the unsold tickets get bought up and the game is televised.
  - jhfdbkofdcho 8y ago
    Happened to the Raiders in Oakland all the time. Here’s a piece from a couple years ago about how they had to remove seats from sale so they could qualify because nearly every game was blacked out. https://deadspin.com/5982547/raiders-will-reduce-seating-capacity-to-the-nfls-smallest-in-attempt-to-avoid-tv-blackouts https://deadspin.com/5982547/raiders-will-reduce-seating-cap...
  - paulcole 8y ago
    > If the football game wasn't soldout, the NFL wouldn't broadcast it on TV You’re missing a key part of this. It’s only “blacked out” in the local market of the home team. If the Cowboys are playing in Jacksonville, you better believe that game is going to be on TV in Dallas (and possibly most of the rest of the country) no matter how many tickets get sold in Jacksonville. That said, blackouts are very rare and AFAIK no game has been blacked out in about 5 years. https://en.m.wikipedia.org/wiki/National_Football_League_television_blackout_policies https://en.m.wikipedia.org/wiki/National_Football_League_tel...
  - Dylan16807 8y ago
jernfrost 8y ago
Shows the problem of capitalism. Eventually it all ends up as a big pozi scheme where it is all about artifically inflating bubbles and make sure you are the not the last one out when it bursts. Afterwards tax payers can pickup the bill. I gues the movie executives can pick some tax payer paid bonuses like American bankers in 2008.
- mojomark 8y ago
  Concur 100%. This story is just another indicator of a decades-old deeper global corporate philisophical crisis that's leading the global economy down a deep dark rabbit hole. Please see my comment; I feel strongly that this is an important conversation that HN (and other leaders building pur future) need to be having.
- Dylan16807 8y ago
  Even without capitalism, even without money at all, if you want your day job to continue to be "making movies" then there is an incentive to cheat the numbers. And it's not really 'tax payers' that pay the bill here, it's 'stock owners'. There's no reason to bail out a movie company.
  - mojomark 8y ago
    > Even without capitalism, even without money at all, if you want your day job to continue to be "making movies" then there is an incentive to cheat the numbers. One probably shouldn't be 'making movies' if fake sales are necessary because nobody wants to watch. > And it's not really 'tax payers' that pay the bill here, it's 'stock owners'. There's no reason to bail out a movie company. I don't know how it works in China, but often in the U.S., when people put their life savings into junk bonds (or an overly risky house mortgage) that inevitably go bust, they declare banckruptcy and ultimately tax debt is forgiven or severely cut, or tex revenues are funneled to them in the form of wellfare to help them stay afloat. So, yes, when a commercial entity fails for whatever reason (even criminally bad decisions), the tax payers are the ones left paying for the social safety net to keep the afloat.
OliverJones 8y ago
Back in when CDs ruled the music world, artists worked out the Soundscan scam. All CDs came out on Tuesdays. Artists recruited street teams in multiple cities to go to a handful of record stores and buy a few copies of their CD on its debut Tuesday. The music sales metric vendor called Soundscan would pick up these sales numbers and deliver them overnight to the labels. On Wednesday the labels' marketing teams would take a look at the numbers and interpret them as widespread interest. So they would back the CD with marketing programs, giving the CD a better chance to find an audience. Similar things happen with book sales. But, the point here is to find an audience, not to manipulate the stock market.
mabbo 8y ago
One begins to wonder how many such scams like this the Chinese economy can support before the whole house of cards collapses.
- ksec 8y ago
  Quite a while. As long as there are money pouring in China and letting little money escaping China, all they need is just keep the capital flowing.
cs702 8y ago
China's stock market is down over 50% since its peak.[a] Maybe this kind of chicanery has something to do with it? Are fake ticket sales at empty cinemas just the tip of the iceberg? [a] https://money.cnn.com/investing/china-stock-market-meltdown/ https://money.cnn.com/investing/china-stock-market-meltdown/
- ksec 8y ago
  Do you know all the articles inside the link are from 2015?
  - cs702 8y ago
    Yup. It's been in decline since then (with few respites along the way): https://www.scmp.com/business/china-business/article/2162010/shanghais-reign-worlds-worst-performing-stock-market-may https://www.scmp.com/business/china-business/article/2162010...
sct202 8y ago
This reminds me of the Handbook for Mortals scandal (https://www.theguardian.com/books/2017/aug/25/handbook-for-mortals-by-lani-sarem-pulled-from-nyt-bestsellers-list https://www.theguardian.com/books/2017/aug/25/handbook-for-m...) where a publisher was strategically buying books from specific stores that send sales data to the NY Times Best Sellers rankings. They were trying to game the system so that their book would be so 'successful' to drive real sales and create a movie on the book.
mojomark 8y ago
This is not a uniquely Chinese problem - we have the same problem right here in the US... In Tim Oreilly's book 'WTF? What's the future and why it's up to us' (1), he talks quite a bit about the emergence of the idea of corporations focussing on maximizing shareholder value over actually productivity (true societal/economic value). It's the same philosophy that drives the standard massively inflated corporate 'leader' comoensation packages - even when some leaders are severely incompetant. This Wash. Post article describes it a bit (2), but Tim pinpoints the origin to a specific conference talk (can't remember who/when exactly, but the shift occured sometime in early 80's). It's why founders/early invvestors can achieve massive payouts by selling a company even when they've never achieved a profit and ultimately fail - because they're paid in 'smart money' vice cash from profits ('dumb money' - how the worker bee's are paid). It's why companies will continue to opt for short-term gains by displacing workforce with automation versus investing in the long term health of a comoany by training their workforce to be more efficient working in conjunction with automation. Trust me, I believe in large compensation/payouts for talent, but I think that the talent should be measured in true contribution to the health of the economy - which is distinct from the percieved value of a share. HN: Can we please start focussing on building truely productive companies again? 1. https://www.oreilly.com/tim/wtf-book.html https://www.oreilly.com/tim/wtf-book.html 2. https://www.washingtonpost.com/business/economy/businesses-focus-on-maximizing-shareholder-value-has-numerous-costs/2013/09/05/bcdc664e-045f-11e3-a07f-49ddc7417125_story.html?noredirect=on&utm_term=.996eef75e1e2 https://www.washingtonpost.com/business/economy/businesses-f...
- JumpCrisscross 8y ago
  > talent should be measured in true contribution to the health of the economy - which is distinct from the percieved value of a share Most measures of economic health focus on total production. If two societies go head to head, long-run total production will predict both military success and the rate of technological advancement.
- naveen99 8y ago
  Companies can ultimately fail even after going public. Later investors pay earlier investors, founders, or other shareholders by definition. There is nothing smart or dumb about either. Employees have options for liquidating there shares as well in the secondary markets.
lkrubner 8y ago
This is the same force that drives the price of Bitcoin. Thousands of Chinese businesses are trying to get capital out of China, and they take advantage of every loophole to move money out of the country.

100 points by nicolas_t 8y ago

I thought the Chinese government put a stop to mass phantom ticketing a couple of years ago? Either the party didn’t do a good job or western news sources are incredibly late in reporting on scandals in China.

Nasrudith 8y ago
It is the Chinese government - they are legendary for their lack of transparency and considering having a problem known a bigger problem than a problem not being known. Not to mention crackdowns and enforcement have proven quite cyclic for things like pollution control.
paradite 8y ago
Likely they are late to the party. The article itself doesn't have any concrete examples or references to timelines. It just describes the general problem, which has been done by Chinese media since 2016: http://www.chinanews.com/m/yl/2016/08-29/7987022.shtml http://www.chinanews.com/m/yl/2016/08-29/7987022.shtml This article has a summary of timeline (as an image in Chinese), notice the last update was around Apr 2018, which is the latest news that I could find related to phantom bookings: https://m.huxiu.com/article/242292.html https://m.huxiu.com/article/242292.html Nevertheless, it is also true that the problem hasn't been solved as of Apr 2018.

joejerryronnie 8y ago

I'd be more concerned about the entire cities that are empty.

deleted 8y ago
[deleted]
seppin 8y ago
Fake news? Fake city.
azurezyq 8y ago
Here's some recent update: https://www.forbes.com/sites/wadeshepard/2016/04/19/an-update-on-chinas-largest-ghost-city-what-ordos-kangbashi-is-like-today/ https://www.forbes.com/sites/wadeshepard/2016/04/19/an-updat... Tldr: it's fine and there are people.
- Retric 8y ago
  the place is now roughly one-third full aka still basically a ghost town. These buildings are aginging rapidly while mostly unoccupied, which is a huge waste of resources.
  - mavhc 8y ago
    Why are they aging more rapidly than occupied buildings?
    - lithos 8y ago
      Air conditioning, heating, airflow, controlling pests, cycling water out of pipes/vents, and noticing problems like burst pipes. Quality is also abysmal to start with. Looking at some buildings in decay they seem like movie/theme park sets.
    - rasz 8y ago
      https://www.youtube.com/watch?v=XopSDJq6w8E https://www.youtube.com/watch?v=XopSDJq6w8E

oh_sigh 8y ago

This sounds like the exact kind of thing a hedge fund might investigate and short stocks on.

seanmcdirmid 8y ago
Shorting still isn’t allowed in the Chinese stock market, I think. Anyways, it isn’t a very patriotic thing to do.
- cm2187 8y ago
  > Anyways, it isn’t a very patriotic thing to do. Why? There is a national pride in irrational stock market bubbles?
  - 9712263 8y ago
    A patriotic Chinese should support their countries' stock when they are going to drop. Well, at least the propaganda said. Because most large firm in China are either state-owned, or having large portion of stock owned by state. Anyway, Chinese government banned some large stock holder to sell their stock in previous nearly happened financial crisis. It's a terrorism against Chinese government if you do that.
  - currymj 8y ago
    Your average person even in the US feels that there is something unsavory about short selling, like they are saboteurs, gleefully profiting off destruction. Even people you'd expect to be more sophisticated feel this way; I don't want to bring up one company in particular that inspires a lot of weird conspiratorial thinking about short sellers in tech-person-type settings.

throwawayperson 8y ago

Money laundering

lordnacho 8y ago

> Yet the authorities have now worked out that if a showing is somewhat empty in the middle and for some reason all the seats around the walls have been purchased something must be amiss. Sounds like you'd have to investigate very thoroughly to know this? You'd have to have the numbered layout of every cinema, along with the ticket sales data. I mean it's not like you couldn't do it, but if you had a data scientist is that what you'd make him work on?

dagi3d 8y ago

Similar situation happened in Spain. Here the film industry is heavily subsidized for local movies, not only in form of tax benefits but grants. The thing is that in order to get that cash a minimum of sold tickets are required, so a bunch of producers have systematically bought those tickets in cinemas located in small cities or towns

liftbigweights 8y ago
In the US, we used to have NFL blackout games. If the football game wasn't soldout, the NFL wouldn't broadcast it on TV. So local businesses or the wealthy would buy the unsold tickets so that us poor peasants could get to see the game on TV. I don't know any games that were actually blacked out since football is so popular and most games get soldout before the season starts. But once in a while news of the potential of a black out game spreads and the unsold tickets get bought up and the game is televised.
- jhfdbkofdcho 8y ago
  Happened to the Raiders in Oakland all the time. Here’s a piece from a couple years ago about how they had to remove seats from sale so they could qualify because nearly every game was blacked out. https://deadspin.com/5982547/raiders-will-reduce-seating-capacity-to-the-nfls-smallest-in-attempt-to-avoid-tv-blackouts https://deadspin.com/5982547/raiders-will-reduce-seating-cap...
- paulcole 8y ago
  > If the football game wasn't soldout, the NFL wouldn't broadcast it on TV You’re missing a key part of this. It’s only “blacked out” in the local market of the home team. If the Cowboys are playing in Jacksonville, you better believe that game is going to be on TV in Dallas (and possibly most of the rest of the country) no matter how many tickets get sold in Jacksonville. That said, blackouts are very rare and AFAIK no game has been blacked out in about 5 years. https://en.m.wikipedia.org/wiki/National_Football_League_television_blackout_policies https://en.m.wikipedia.org/wiki/National_Football_League_tel...
- Dylan16807 8y ago

jernfrost 8y ago

Shows the problem of capitalism. Eventually it all ends up as a big pozi scheme where it is all about artifically inflating bubbles and make sure you are the not the last one out when it bursts. Afterwards tax payers can pickup the bill. I gues the movie executives can pick some tax payer paid bonuses like American bankers in 2008.

mojomark 8y ago
Concur 100%. This story is just another indicator of a decades-old deeper global corporate philisophical crisis that's leading the global economy down a deep dark rabbit hole. Please see my comment; I feel strongly that this is an important conversation that HN (and other leaders building pur future) need to be having.
Dylan16807 8y ago
Even without capitalism, even without money at all, if you want your day job to continue to be "making movies" then there is an incentive to cheat the numbers. And it's not really 'tax payers' that pay the bill here, it's 'stock owners'. There's no reason to bail out a movie company.
- mojomark 8y ago
  > Even without capitalism, even without money at all, if you want your day job to continue to be "making movies" then there is an incentive to cheat the numbers. One probably shouldn't be 'making movies' if fake sales are necessary because nobody wants to watch. > And it's not really 'tax payers' that pay the bill here, it's 'stock owners'. There's no reason to bail out a movie company. I don't know how it works in China, but often in the U.S., when people put their life savings into junk bonds (or an overly risky house mortgage) that inevitably go bust, they declare banckruptcy and ultimately tax debt is forgiven or severely cut, or tex revenues are funneled to them in the form of wellfare to help them stay afloat. So, yes, when a commercial entity fails for whatever reason (even criminally bad decisions), the tax payers are the ones left paying for the social safety net to keep the afloat.

OliverJones 8y ago

Back in when CDs ruled the music world, artists worked out the Soundscan scam. All CDs came out on Tuesdays. Artists recruited street teams in multiple cities to go to a handful of record stores and buy a few copies of their CD on its debut Tuesday. The music sales metric vendor called Soundscan would pick up these sales numbers and deliver them overnight to the labels. On Wednesday the labels' marketing teams would take a look at the numbers and interpret them as widespread interest. So they would back the CD with marketing programs, giving the CD a better chance to find an audience. Similar things happen with book sales. But, the point here is to find an audience, not to manipulate the stock market.

mabbo 8y ago

One begins to wonder how many such scams like this the Chinese economy can support before the whole house of cards collapses.

ksec 8y ago
Quite a while. As long as there are money pouring in China and letting little money escaping China, all they need is just keep the capital flowing.

cs702 8y ago

China's stock market is down over 50% since its peak.[a] Maybe this kind of chicanery has something to do with it? Are fake ticket sales at empty cinemas just the tip of the iceberg? [a] https://money.cnn.com/investing/china-stock-market-meltdown/ https://money.cnn.com/investing/china-stock-market-meltdown/

ksec 8y ago
Do you know all the articles inside the link are from 2015?
- cs702 8y ago
  Yup. It's been in decline since then (with few respites along the way): https://www.scmp.com/business/china-business/article/2162010/shanghais-reign-worlds-worst-performing-stock-market-may https://www.scmp.com/business/china-business/article/2162010...

sct202 8y ago

This reminds me of the Handbook for Mortals scandal (https://www.theguardian.com/books/2017/aug/25/handbook-for-mortals-by-lani-sarem-pulled-from-nyt-bestsellers-list https://www.theguardian.com/books/2017/aug/25/handbook-for-m...) where a publisher was strategically buying books from specific stores that send sales data to the NY Times Best Sellers rankings. They were trying to game the system so that their book would be so 'successful' to drive real sales and create a movie on the book.

mojomark 8y ago

This is not a uniquely Chinese problem - we have the same problem right here in the US... In Tim Oreilly's book 'WTF? What's the future and why it's up to us' (1), he talks quite a bit about the emergence of the idea of corporations focussing on maximizing shareholder value over actually productivity (true societal/economic value). It's the same philosophy that drives the standard massively inflated corporate 'leader' comoensation packages - even when some leaders are severely incompetant. This Wash. Post article describes it a bit (2), but Tim pinpoints the origin to a specific conference talk (can't remember who/when exactly, but the shift occured sometime in early 80's). It's why founders/early invvestors can achieve massive payouts by selling a company even when they've never achieved a profit and ultimately fail - because they're paid in 'smart money' vice cash from profits ('dumb money' - how the worker bee's are paid). It's why companies will continue to opt for short-term gains by displacing workforce with automation versus investing in the long term health of a comoany by training their workforce to be more efficient working in conjunction with automation. Trust me, I believe in large compensation/payouts for talent, but I think that the talent should be measured in true contribution to the health of the economy - which is distinct from the percieved value of a share. HN: Can we please start focussing on building truely productive companies again? 1. https://www.oreilly.com/tim/wtf-book.html https://www.oreilly.com/tim/wtf-book.html 2. https://www.washingtonpost.com/business/economy/businesses-focus-on-maximizing-shareholder-value-has-numerous-costs/2013/09/05/bcdc664e-045f-11e3-a07f-49ddc7417125_story.html?noredirect=on&utm_term=.996eef75e1e2 https://www.washingtonpost.com/business/economy/businesses-f...

JumpCrisscross 8y ago
> talent should be measured in true contribution to the health of the economy - which is distinct from the percieved value of a share Most measures of economic health focus on total production. If two societies go head to head, long-run total production will predict both military success and the rate of technological advancement.
naveen99 8y ago
Companies can ultimately fail even after going public. Later investors pay earlier investors, founders, or other shareholders by definition. There is nothing smart or dumb about either. Employees have options for liquidating there shares as well in the secondary markets.

lkrubner 8y ago

This is the same force that drives the price of Bitcoin. Thousands of Chinese businesses are trying to get capital out of China, and they take advantage of every loophole to move money out of the country.