The Ongoing Standstill In The Telugu Film Industry, Explained

From the outside, one would assume that the Telugu film industry is doing several things right, especially when compared to Bollywood. Apart from this year’s biggest hit RRR, which is being mooted as a formidable Oscars contender, the industry has also had its share of nationwide successes such as Major and the recently-released Karthikeya 2. But the healthy image one gets while observing this industry hardly represents the truth of what’s going on inside. Reeling from two back-to-back strikes that threatened to bring all film production to a halt, the industry is currently in a period of introspection after the pandemic changed the way the business was being run. What is the immediate cause for this panic, even when the industry seems to be pushing out one hit after another?   

“But that impression is a result of the hits that released in the last two or three weeks,” suggests a Telugu film producer, who did not want to be named. “With hits like Sita Ramam, Bimbisara, and now Karthikeya 2, it might seem like the business is healthy again, but you should not forget how desperate we were just a month ago. For a period that began after the release of Major, we did not have a single hit until these recent films. That is more than two more months of flops, sending us into a state of panic.” 

The films that released during this phase included highly-anticipated projects like Acharya, Rama Rao On Duty, The Warriorr, Virata Parvam, Ante Sundaraniki, Thank You, and others. With a mix of big stars, directors, and hit combinations, these films were expected to bring back audiences to the theatre and keep them there week after week. But with dismal opening figures and empty seats, distributors and producers too have been wondering why so much changed so quickly. 

The Viewer Returns…

The obvious reason for this is naturally the OTT disruption. “The two pandemic years got the audience hooked to the OTT model,” says producer Srujan Yarabolu who sensed the potential of the OTT earlier with his film Gatham (2020). He now has six films under production at various stages. “Apart from the convenience of watching films at home, audiences discovered films in other Indian and international languages. Even the proliferation of OTT subscriptions from cities to rural areas happened faster than anyone anticipated. People who primarily watched only Telugu films have now developed a taste for all kinds of films. The so-called commercial films that were made a year or two ago are not considered commercial anymore. In fact, we now have to redefine the word commercial.” 

Audiences also have become more choosy when they decide on which films to watch in the theatre. Logistically, one of the reasons for this is the increased ticket prices. Right before the release of RRR, several theatre chains decided to increase ticket prices and also introduced flexi-pricing that made movies out of reach for a section that was recovering from the financial crisis of the lockdowns. Naturally, the families stayed away from theatres, deciding to be far more selective. 

Even if one observes recent hits, they are commercial films but not formulaic. As Srujan says, “they are concept-based films which would earlier have been considered niche films.” Of these, Sita Ramam is a decidedly old-school love story with a strong nostalgia factor, Bimbisara is a period film and adventure film Karthikeya 2 takes a leap forward by working around the concept of time travel. In other words, none of these films can be described as mass films in the traditional sense. 

Insider Issues 

But these are still issues emerging from audiences’ tastes and choices, something all industries are fighting. How has the OTT model changed film production? “A major difference is how the ratios have changed in budgeting,” says the producer who did not want to be named.

“Earlier, if Rs 10 was a film’s budget, you factored Rs 6 to be earned theatrically. Between satellite, OTT, and other rights, we would calculate the remaining amount. But with OTTs coming in, this ratio has turned upside down. Now we factor in 5 rupees from the OTTs with theatricals only bringing in three rupees of this budget. If the OTTs are not paying the price we want or if they don’t want to buy the film, we’re stuck.”

Another important factor that has brought about this conundrum is the overproduction of films that began eyeing OTT revenue. Producers who felt the OTTs will offer them a larger sum, increased the budgets of their films and in other cases, started making multiple films at once. Until the strike, this meant hundreds of films getting made, all with an eye on the OTT return. The funding from OTT also led to superstars increasing their salaries. “If 150 films were getting made yearly, producers increased this to 300 films now. This overproduction also means a huge demand for technicians and character actors. So if an actor charged Rs 2 lakhs per day, with this new demand, now they can charge Rs 5 lakhs. When this is spread to the whole crew, the budgets shoot up significantly,” the producer adds. With superstars too charging more, thanks to what the OTT has to offer, these films further became out of reach. 

Course Correction

All these factors have contributed to the present day when the producers associations have come together to call for a “healthy pause” to introspect and reconsider what went wrong. “We have all sat together and discussed how to move forward from this slump,” says producer Sharat Marar, who had made huge films like Sardar Gabbar Singh (2016). “We have had meetings with the federations of all 24 crafts and we also have ongoing meetings with the actors’ associations. We assumed that the audiences would all flock to the theatres once they opened and this resulted in too many films getting made. But at the stage we’re in, all of us understand that we have to tighten our belts if we need to survive.”

Among the many ideas that are needed to bring back lost glory is the idea to extend the OTT release window.

Marar adds, “If you look at the west, France has a one-year period before you can release your film on OTT. In fact, if you want a smaller release window, these companies have to invest in the films, further strengthening the industry. Similarly, if we too extend the OTT release, audiences will go back to the habit of watching films in the theatre.” 

The trick is also to reduce their reliance on OTTs. “With these companies rapidly changing their policies, it is healthier if we back content and hope it does well in theatres. In the future, if OTTs decide on the buying price based on the box office performance, it will be easier for producers to make that switch too.” With so much happening inside and outside, we will have to wait until the strike is called off to see how the industry survives. With the two producer’s organisations expected to coordinate and finalise a date soon to restart shoots, other industries too will be waiting for guidance and solutions from the Telugu Film Industry to survive and thrive in the post-Covid universe. Until then, it’s up to films like Karthikeya 2 to hold the fort.