Mockingjay 2This weekend will see the arrival in China of James Bond and Spectre, followed by The Hunger Games: Mockingjay Part 2 the next week and The Martian a week later. Those films have a good shot at breaking out of an increasingly congested market. But box office recently has dipped for the studios in China, and while that’s been the case in the U.S., we’re not talking about the kind of star-driven fare that was chasing mature moviegoers Stateside; those movies rarely make it to the Middle Kingdom.

Rather, all-audience pics have struggled in a series of frames that were stacked with Hollywood films, and local titles that jumped out of the water. With such a heavy parade of movies recently and more to come before the next blackout in December, one distribution exec calls the market glut “a freaking mess.” Others I speak to have been scratching their heads at the downturn, with some wondering if China is at risk of losing its cash-cow status or if the market is simply seeing more manipulation.

Inside Out Ant-ManAfter an April-June window that saw a mix of mega-studio winners dominate (Furious 7, Jurassic World, Avengers: Age Of Ultron), this has been a relatively slow few weeks at the Chinese box office. October shows a 9% drop for non-Chinese pics — and that includes the strong performanceof Ant-Man and the underperformance of Inside Out. The first week in November doesn’t look any better for the studios: Receipts across the Top 10 non-Chinese pics dipped 30% even though the market was flat overall with last year.

Local titles thrived during the July-August blackout before Hollywood was let back into the market, but even for some films that were wildly successful outside the PROC gates, the payoff was low. Studio quota movies get 25% of the box office in China after a negligible P&A spend. Even though it didn’t need China, Disney/Pixar’s Inside Out made just $15M in China versus its $850M+ global haul. Dis’ Star Wars: The Force Awakens likewise won’t need China when it bows in January, but the Mouse House has been promoting the franchise six ways from Sunday and it will be interesting to see how China ultimately positions the film which does not currently have a fixed release date.

spectre 2If Spectre, which we know is coming Friday, rises to $100M, that’s an extra $25M in the Eon/MGM/Sony coffers — Skyfall did $60M, and the growth in the market is promising on this latest 007. Likewise, The Hunger Games franchise typically has underperformed in China compared to elsewhere. This last installment should get a boost from the inherent final-ness plus a big markeing campaign. Those are two examples of movies that enjoy extra grosses but don’t necessarily need them.

Still, 2015 market share will go to the Chinese – something China Film Group and SAPPRFT seem keenly determined to ensure ever since Hollywood eked out a win in 2012. And it’s taken particular measures to get there. Note that Furious 7 grossed a record-making $390.1M in 30 days in China — the limit on a foreign run with only very rare exceptions. When local pic Monster Hunt began performing strongly in July, authorities left the movie in theaters, where it beat F7’s record on its 58th day.

That movie had no leggy competition from Hollywood. But it’s been an open market since then and yet, emblematic of the reason for the recent box office downturn is that this past weekend included three new Hollywood openers that squeezed one another’s box office, plus two local movies that over-indexed. That’s a phenomenon that has happened more frequently this fall as the Chinese authorities – who select release dates for the studios at their own discretion – have pitted more studio movies against one another while also loading the deck with homegrown titles.

One distribution exec puts the weekend’s cannibalization down to the authorities taking “so long to announce dates.” Typically, studios are informed of their dates 30 days in advance, sometimes that’s longer, but if not, it allows only a short marketing window in which they need to mobilize to get the message out — competing along the way with local pics that have much more lead time.

ex files 2This weekend, local comedy Ex Files 2: The Backup Strikes Back, a sequel to an earlier sleeper, made about $17M. Fox’s Maze Runner: The Scorch Trials posted $19.8M, but only $14.3M came from the FSS. This is a growing trend in China, where many of the post-blackout Hollywood quota movies were given a Sunday or early-week date. Last Women Standing, another local movie, got up to $6.3M, in third place, and Everest, which had all the Imax screens, climbed to about $6M for the three day and No. 4.

Everest had a strong start to the week — releasing on a Tuesday — and all things considered did solid business with an $11.6M cume in the full frame; it should get to $20M before Bond flies in Friday. Scorch Trials saw a 60% rise on the previous Maze Runner installment but surprisingly bit into Fox’s own The Peanuts Movie. Retitled to put Snoopy front and center, it summoned only $2.8M in its debut, with much of its pumpkin patch going to Scorch Trials instead. One exec thinks this is part of a trend in China that sees animation being supplanted by superhero movies. “Animation is playing a lot younger. It’s not the 8-12 anymore, they want to see something a little tougher,” I’m told.

Minions and its $70M in September might be the exception to that rule — though it was “wedged into a non-school holiday date surrounded by other U.S. titles,” as one person points out. But it does bring up what happened to global phenom Inside Out, which has been wildly embraced since it debuted in Cannes in May. A source suggests Pixar can “divide” auds in some markets (Russia, for example, where the movie topped out at $20M, is not in the Top 10 of offshore plays). Others believe that Pixar’s knack for drawing adult and kid audiences doesn’t jive in the Middle Kingdom. But it’s also notable that Inside Out got a Tuesday release in a crowded early-October window. At the same time, Disney/Marvel’s Ant-Man fared far better a week and a half later with about $105M to date locally. Still, October was weighted toward Chinese movies with Goodbye Mr Loser and Lost In Hong Kong alone accounting for $315M out of about $600M across the Top 10, which only included $142M from non-Chinese movies, per Rentrak.

china hollywoodFast-forward to the current frame and one exec, who works across China and Hollywood, opines, “The U.S. films have the screens, they just aren’t drawing the interest.” Exhibitors, I hear, are balking at showing some non-essential Hollywood movies. Referring to controversy this summer when reports surfaced of creative accounting at some theaters, a studio exec who deals regularly with China says, “The exhibitors who are pissed they have to take Hollywood movies are the same people who cheated Paramount out of receipts on Terminator. They have no business to bitch about having to take foreign films. It’s a bullsh*t argument.”

Can the two industries coexist peacefully inside the world’s second-biggest box office market? There certainly is skepticism. It’s a “ticking clock,” said DMG Entertainment’s Chris Fenton last month at the USC Law School Institute on Entertainment Law and Business. He highlighted a threat that “without aggressively implementing innovative strategies to create relevancy in the China market, U.S. studios will lose more and more of their foothold in the China market to the rapidly progressing China film industry.”

Hollywood has made inroads by adding Chinese characters or locations or plot devices and partnerships (think Transformers: Age Of Extinction), but might have lost ground as the Chinese industry has caught up. “It’s now to the point where China Film Group and SAPPRFT don’t even have to level the playing field. It’s happening naturally,” I’m told. And the authorities “don’t gain anything with Chinese exhibitors pissed at them for forcing U.S. movies, especially when domestic movies are crushing the Western films anyway.” What’s more, says a source, “A few years back, when Western films were dominating, picking films to fail was the agenda. Not anymore. It’s not necessary.”\

The next several weeks will be telling with the November movies. Spectre and The Hunger Games: Mockingjay Part 2 both have big potential to do better than their last outings. Beyond that, look for The-MartianThe Martian to land well. China has appreciated comps Gravity and Interstellar in the past, plus Ridley Scott’s hit has the Chinese come in to save the day — a plot factor that will please local authorities and auds. And then comes the experiment that I reported exclusively last week in which Point Break will bow in China three weeks before it goes Stateside. A potentially smart bet, if it does well there that bodes nicely for picking up some crumbs from Star Wars: The Force Awakens on the rest of the planet later in the month. If it doesn’t do so hot, at least it’s still likely to open well. After that, a new blackout starts and in come The Ghouls and Jackie Chan in Skiptrace, once again guaranteeing a holiday with a big local box office bow around it.

A final vagary of the current Chinese market: One movie that has neither to do with Hollywood or China has been a bona fide hit locally. Cannes debut Le Petit Prince has run away with more than 4.6M admissions and has made over $22M. Paramount has the title for the U.S. and Wild Bunch sold it internationally. How does Wild Bunch’s Vincent Maraval explain the success in Asia? “I don’t know. I suspect they were familiar with the story.”