Tollywood’s Revenue Revolt

The Telugu film industry is locked in a high-stakes battle over box office revenue sharing. Theatre owners are pushing to replace the outdated rental-based model with a revenue-sharing system.Faced with rising costs and shrinking audiences, they say the current setup is no longer viable. Exhibitors have threatened to shut down theatres starting June 1 if their demands aren’t met, insisting that revenue be fairly split among producers, distributors, and exhibitors based on actual ticket sales.BackgroundTwo decades ago, AP and Telangana had nearly 1,900 single-screen theatres. Today, about 1,500 remain, many struggling financially after closures and conversions to multiplexes or commercial spaces. Under the fixed rental model, theatre owners pay a set fee regardless of a film’s success, bearing full operational costs even with poor ticket sales. For many years now exhibitors have been asking to shift to a revenue-sharing system based on actual collections.Things came to a boil last week when they threatned to shutdown theatres starting from June 1. Distributors and exhibitors met on Wednesday to hash out the issue and are set to meet producers today to push for a resolution. The future of summer releases hangs in the balance as the stakeholders scramble to find a solution.Rental vs Revenue Sharing: Theatre owners demand change‘Corrections are needed from all sides, including stars sharing the risk’“The theatre experience is vital for a film’s success. With rising ticket prices and varying revenue splits — typically starting at 50/50 — there’s an urgent need to shift to a fairer model. For example, a film earning ₹1.25 lakh per show can gross ₹35 lakh a week. After splits and taxes, producers get around ₹17 lakh, and exhibitors and distributors share ₹14 lakh each. Corrections are needed on both exhibitors and distributors sides, and stars should also embrace revenue-sharing.Celebrate success, yes — but share the risk when a film fails to ease the pressure on the industry.”— Prasanna Kumar, Producer and Secretary, Telugu Film Producers Council‘We still have rents and operational costs to cover’“Big-budget theatrical releases have reduced due to pan-Indian films and OTT platforms, with major star films now arriving only once in two years. Even when such films release, most profits go to producers and distributors. We’re seeking a shift from the current rental-based model to a percentage-based revenue-sharing system, as exhibitors still have to bear rents and operational costs. A theatre shutdown is not confirmed yet; a final decision will follow an upcoming meeting.”— B Sathyanarayana Goud, Treasurer, Telangana Telugu Film exhibitors and controllers associationExhibitors are saying that running single-screen theatres under the current rental system is no longer viable. They’re incurring losses and a growing number of exhibitors are advocating for a shift from the traditional rental model to a percentage-based model. We expect a resolution before June 1, where a final decision could be made.— Bobby, GM, Geetha Film Distributors– Divya Shree