Japanese pics beat the Hollywood competish like a giant taiko drum in 2006. Six, led by the Studio Ghibli toon “Tales From Earthsea,” raked in ¥5 billion ($43.5 million) or more, while local pics grabbed a 53.2% market share — the first time they had reached the 50% mark in 21 years.

From the get-go, industry insiders knew 2007 might be different. For one thing, hitmaker Ghibli had announced it would not release its next toon, Hayao Miyazaki’s “Ponyo on the Cliff,” until 2008. For another, the 2007 Hollywood lineup — beginning with new entries in the “Pirates of the Caribbean,” “Spider-Man” and “Harry Potter” franchises — looked formidable and has since performed up to expectations, while many local would-be-blockbusters have not.

According to figures compiled by Kinema Junpo magazine, the local market share slipped to 43% in the first seven months of 2007 — a 10-point drop from last year’s.

Also, according to a survey of the exhibition biz conducted by the Ministry of Economy, Trade and Industry, total B.O. dropped 24.4% year-to-year, to $112 million in the peak month of July, while admissions fell 19.6%. The main reason for the sorry summer numbers was the poor showing by local pics, whose July B.O. plunged 41.4% compared with the same month last year.

In 2006, “Tales From Earthsea” and the TBS disaster pic “Sinking of Japan” topped the summer charts, earning $67.7 million and $42.2 million, respectively. This summer, the only Japanese pic to approach those totals was the 10th Pokemon toon, with $44.2 million.

Foreign pics, by contrast, recorded only a 3.2% year-to-year drop for July, buoyed by strong numbers from “Harry Potter and the Order of the Phoenix” and “Pirates of the Caribbean: At World’s End.”

So is this year a writeoff for the Japanese biz? Not yet: The second half is shaping up as far better than the first.

The upturn began Sept. 1, with Klockworx’s release of “Evangelion: 1.0 You Are (Not) Alone,” a toon based on a 1995 cult hit TV series by Hideaki Anno that has become a worldwide sensation. The toon, directed by Anno with a new story, characters and 3-D look, soared to the top of the B.O. in its first weekend despite being screened with only 84 prints, and is now expected to finish with at least $13 million.

A bigger hit by far is “Hero,” a thriller/romance based on a popular Fuji TV show about a rebel prosecutor. Released Sept. 8 by Toho on 475 screens — a record for a Japanese pic — “Hero” cleared $17.4 million in its first week and now, says Kinema Junpo B.O. analyst Hiro Otaka, “looks likely to pass the ¥10 billion ($87 million) mark.”

Fuji TV producer Chihiro Kameyama, the mastermind behind both “Hero” and the smash hit “Bayside Shakedown” pics about cops in the trendy Tokyo Bay area, is even more upbeat, saying that “Hero” may surpass “Bayside Shakedown 2,” which grossed $152.6 million in 2003 — a record for a live-action local pic.

Several pics inspire optimism

Otaka is skeptical (“He saying that as the film’s producer”), but “Hero,” he believes, is one of several fall pics that will boost the local market share toward the 50% mark.

Another is “Always — Sunset on Third Street 2” — the sequel to Takashi Yamazaki’s hit 2005 dramedy set in a working-class Tokyo neighborhood circa 1958. Still another is “A Tale of Mari and Three Puppies,” a heartwarming drama based on a true story about a mother dog who kept her three newborn puppies alive in the wake of the devastating 2004 Niigata earthquake. Toho will release “Always 2” on Nov. 3, “Mari” on Dec. 8.

Meanwhile, Toho archrival Shochiku hopes to win the year-end B.O. battle with “Midnight Eagle,” Izuru Narushima’s actioner about the disappearance of a U.S. stealth bomber and its vastly lethal secret payload in Japan’s North Alps in midwinter. Co-produced by Universal Pictures Japan, the pic will open this year’s Tokyo Intl. Film Festival on Oct. 20 and go into general release Nov. 23.

Hollywood’s fall lineup, including “The Bourne Ultimatum,” “Resident Evil: Extinction,” “Beowulf,” “I Am Legend,” “Surf’s Up” and “National Treasure: Book of Secrets,” by comparison “does not look that strong,” Otaka says, though he believes “it will be very hard, maybe impossible” for Japanese films to again grab a majority share.

“But if ‘Hero’ really takes off, that could change,” he adds.

And if “Hero” falls short? There’s always next year when Miyazaki — the local biz’s real B.O. hero — will ride to the rescue.