China’s box office has recorded its first Q1 loss in five years, according to numbers from various box office statistics gathering sites.

Total box office for the first three months of the year was RMB14.46 billion (US$2.097 billion) from 409 million admissions, slightly down from last year’s RMB14.496 billion (US$2.1 billion).

However, that total includes RMB932 million (US$135 million) in internet ticketing service fee – about 76% of the nation’s movie tickets are purchased via internet ticketing platforms.

Once the service fee is deducted, the actual Q1 box office was RMB13.53 billion (US$1.96 billion), representing a year-on-year drop of 6.6%. The drop shows that the Chinese box office slowdown is likely to continue this year.

The slowdown is partly due to the ending of subsidies by internet ticketing platforms. To attract new users in an intensely competitive field, these platforms offered deep discounts on movie tickets at their own expense. In 2015, ticketing subsidies contributed an estimated RMB3 to 5 billion (US$435 to 725 million) to total box office revenue. These ticketing subsidies helped boost cinema attendance in third, fourth and fifth-tiered cities, where average income is lower than larger cities. However, it seems that a portion of those who benefitted from these subsidies did not continue to attend films once those discounts were gone.

Last week, Alibaba Films revealed that the expenses for these subsidies was the main cause that the company reported a net loss in 2016.

The declining quality of films also continue to plague Chinese cinema. Earlier this year, Lunar New Year releases Journey to the West: The Demons Strike Back (西遊伏妖篇) and Buddies in India (大鬧天竺) both underperformed due to negative word-of-mouth. Han Han’s Duckweed (乘風破浪), however, was one of the rare bright spots, recovering from a slow opening for an excellent RMB1.05 billion (US$152 million) total. Jackie Chan’s Kung Fu Yoga (功夫瑜伽) also performed better than expected despite a low user score on Douban, thanks to family audiences.

In March, foreign films accounted for an astonishing 94.1% market share, thanks to the success of Logan, A Dog’s Purpose, Resident Evil: The Final Chapter and Beauty and the Beast. The top-grossing local film was Top Funny Comedian: The Movie (歡樂喜劇人), which made only RMB65.3 million (US$9.46 million). Total box office for the month, however, also saw a year-on-year drop of 9%.

The next big test for Chinese box office comes at the end of this month, when moviegoers will choose between four local titles during the Golden Week holiday. Fate of the Furious and Guardians of the Galaxy Vol 2 are also expected to do big business before and after the holiday, respectively.