The Rice University Neologisms Database

To give out free tickets to a performance in a theatre in order to fill the seats. Used as a marketing technique. This word is a clipping of the phrase “paper the house”, which is a theatre term that describes passing out free tickets to fill seats during a performance. Theatres often do this to get people to see a show so that they will spread publicity through word of mouth. I’m not sure how this term originated, but a theory is that it refers to the fact that the tickets aren’t worth the paper they are printed on. While “paper the house” is a fairly established term, “papering” seems to be a recent clipping.