The Telugu film industry has garnered Nationwide fame with Pan-India successes. Many say Tollywood already replaced Bollywood in the Indian Cinema canvas. But then this is all the outside glamor. Tollywood is facing its own challenges and now is also facing a challenge of existence. The main reason for this is the OTT.
Telugu films these days are centered around non-theatrical rights. Gone are the days, the dependence would be on 70% theatrical. These days, there is a 70% dependence on non-theatrical and the rest is on theatrical.
The Non-theatrical again is mostly about OTT and Hindi rights. With the emergence of OTT, the satellite rights market got diminished entirely. Several small and medium films are finding no takers in satellite already.
Producers are planning their markets based on non-theatrical markets. If there is a market for a hero in non-theatrical, the movie becomes viable for the producer. But then, the problem is far from being over.
Heroes are changing their remuneration as per the non-theatrical market. For instance, a YouTube star who is making small films these days recently bagged a success with a film on mother sentiment. He is demanding close to 1.25 to 1.5 Crore remuneration.
Another hero who had a direct-to-OTT release during COVID took 10 Crore remuneration for that film. He had three releases after that and he is now charging 30 Crore for his forthcoming film.
The logic in both cases is the non-theatrical market.
So heroes and producers are largely depending on the non-theatrical market, particularly the OTT rights. But is the picture rosy at the OTT companies’ end?
SunNXT already disappeared from the scene. Zee is looking at a possible merger with Sony and slowed down drastically. SonyLIV is doing some buying these days but going by its patronage, it may not last long.
Amazon Prime Video which triggered the OTT boom for Tollywood revamped its strategy and slowed down. Netflix is aggressively acquiring rights. Tollywood is hoping Jio will also do some aggressive buying
But then, no OTT company can burn cash forever. Sooner or later, we will see consolidation to one or two players and then, the prices offered today will never be permanent.
As of now, Hindi rights money only looks certain as long as Bollywood is churning out trash. But that will not be forever.
Neglecting the theater business and relying on non-theatrical is going to be dangerous.
There is one young hero who makes films as a Package deal showing non-theatrical revenue. This is slowly eroding with focus on minting money and less on content. Two top production houses made money with Package deals with this hero but bagged bad name.
Two heroes – one from an influential family and a hero with a sudden super hit debut film have their films lying in cans for several months just because there are no takers for their OTT deals.
It’s high time the industry particularly the heroes and producers revisit their strategy. Somehow the audience should be brought back to the theaters. Or else, the fall is coming.
This should be done before single-screen theaters become Marriage halls, Warehouses, and Multiplexes. Multiplexes do not offer Shares as good as single screen theaters. The theater biz should be revived before single-screen theaters become history. Or else, it will be another problem brewing.
To put Industry’s scenario correctly – It is like riding a tiger, not knowing how to get off without being eaten.
