As Monster Hunt producer Edko Film owns or has a stake in movie theaters, those venues were reported to have scheduled a large number of screenings, sometimes 15 minutes apart, for which no moviegoer would show up.
Edko executives explained that those screenings were reserved for special groups, which the company paid for as a social benefit akin to charity. In other words, one branch of the company has to pay another and register the deals just as any other. In this case, the government seems to be the only benefactor because it earns a nifty income in taxes.
In the case of Enlight Picture, which produced and distributes Lost in Hong Kong, it does not own theater chains and thus has to pay for theater rental. But the cost, reveal the insiders, is counted as part of distribution or advertising, which explains the dramatic decrease of film advertising in traditional media or outdoor displays in recent years, say the analysts.
One might say that "phantom screenings" present little cost to the movie theaters as they do not have a graveyard shift anyway. But they have a downside: They are so suspect as to invite sleuthing. A newer version is more costly because it books shows at prime time, but only a portion of the seats.
A screening for 9 pm may seem to have sold half of the house, but once you go in you'll find it less occupied than you had anticipated. And since movie theaters rarely impose the ticketed seating arrangement and people naturally pick the best seats, it takes a sharp eye to notice something fishy between a sold-out diagram and a half-empty house.
It's funny that when Enlight was first accused of this form of deceit, one of its executives blurted out online that they were not to blame because everyone was doing it. (He later deleted the post.)