Revenue model dispute escalates in Tollywood

Hans India

20-05-2025

Exhibitors from Andhra Pradesh and Telangana demand a shift from the rental-based system to a revenue-sharing model; theatres could shut down from June 1 if demands are not met, risking major disruption to Tollywood's June releases, including Pawan Kalyan's Hari Hara Veera Mallu
Hyderabad: Tollywood is bracing for a major shake-up as exhibitors from Andhra Pradesh and Telangana have issued a stern ultimatum—shift to a percentage-based revenue model or face a statewide theatre shutdown starting from June 1. The call for change emerged from a joint meeting held recently, where over 60 prominent exhibitors, including heavyweights like Dil Raju and Daggubati Suresh Babu, came together to voice their discontent with the prevailing rental-based system.
At the heart of the unrest is the exhibitors' demand to transition to a profit-sharing or percentage-based model, allowing them a fair share in the film's box office performance. Currently, under the rental model, producers charge fixed amounts for screening films, irrespective of how well they perform. This, exhibitors argue, places undue risk on them, especially when films underperform. They further say the current practice is crippling them financially.
The exhibitors have already communicated their intentions to the Telugu Film Chamber, the Producer Council, and the Producer Guild. They also plan to submit a formal bandh notice and request letter to these bodies, signaling their seriousness. If producers remain unyielding, theatres affiliated with these exhibitors may halt operations from June 1, affecting the entire regional film exhibition chain.
The proposed strike threatens to severely impact several major upcoming film releases. Kamal Haasan's much-awaited film Thug Life is expected to be the first casualty. While the Tamil version is likely to release as scheduled, its Telugu-dubbed version may not hit theatres if the bandh goes through. Only multiplexes that fall outside the exhibitors' association might be able to screen it.
The stakes are even higher for Pawan Kalyan's Hari Hara Veera Mallu, scheduled for release on June 12.
With substantial investments and theatrical advances riding on the film, a shutdown at this stage could spell significant financial losses and logistical chaos.
Speaking on this, senior distributor from Andhra Pradesh Appa Rao said, 'The exhibitors' demand for a percentage-based revenue model is understandable, especially with the rising operational costs.
However, this shift cannot happen overnight.
Producers have already planned their budgets and recoveries based on the rental system. A sudden change could create financial instability and mistrust.
We're open to dialogue, but it must be phased and mutually beneficial. A shutdown will only hurt the entire industry, including the audience.'
Interestingly, the exhibitors' demand has not found unanimous support within the industry.
Several prominent producers and distributors are reported to have skipped the meeting, signaling discomfort with the proposed model.
The percentage system, while beneficial for exhibitors, could potentially reduce producers' revenue shares, particularly in single-screen theatres, sparking hesitancy among them.
As of now, top industry seniors are yet to make an official statement.
However, with less than two weeks remaining before the deadline, producers are expected to initiate dialogue in a
bid to avert a full-blown crisis.
If a resolution is not reached soon, Tollywood could witness an unprecedented disruption in its theatrical business model—one that may redefine how profits are shared in the industry going forward.