French film industry watchdog, the CNC, has fined UGC $198,000 (FFr1.5m) because the exhibitors' controversial loyalty card scheme breaches its regulatory code.
The UGC pass allows cinema-goers to see an unlimited number of films for FFr98 a month with a minimum subscription period of one year. The CNC argues that cinema tickets issued through the passes do not show the name of the film that the cardholder is going to see, thus making it impossible to calculate admissions for specific titles.
The cards have already been investigated by French competition authorities but were cleared in July. The on-going issue of whether rights holders are being adequately remunerated under the loyalty card scheme could soon be resolved as new legislation - which focuses on the accountability of box office receipts - is expected to go before the French Parliament next spring.
UGC's rivals Pathe and Gaumont/MK2 face a similar fine over their own loyalty passes. However, a major issue remains the profitability of the cards to exhibitors. UGC chief Guy Verrechia has stressed that profit margins are currently 'comfortable' if cardholders see 30-40 films per year, but at 70 films a year, the exhibitor loses money.
According to Verrechia, UGC Illimite cardholders have been to see one film per week on average so far.