Telugu cinema faces double whammy as high ticket prices turn audiences away, streamers balk at costly OTT rights

For one, distributors insist on higher ticket prices for big-budget films, denting prospects in the price-sensitive south Indian market. This has already affected hits such as Pushpa 2: The Rule in their home territory.

And two, as is the case for Hindi movies, streaming platforms are unlikely to keep paying exorbitant prices for big star films that aren’t bringing in adequate returns. This could result in streaming services going slow on acquiring movies, making it difficult for films to go on the floor.

“There is some concern around the business of Telugu cinema – foreign platforms like Netflix and Prime Video have spent huge sums to acquire mass-market films in the language but there is no way they would recoup those. It is a no-brainer that the industry will see some cost correction just like Hindi did and that could possibly throw them off,” said a senior executive at a streaming platform heading southern movie acquisitions who declined to be identified.

The executive added that over the past few months, production had slowed down in the Hindi film industry with streaming platforms no longer agreeing to acquire OTT rights at prices they used to. In many cases, they insist on taking a call after the movie goes to theatres first.

“A similar situation could arise in Telugu cinema,” the person added.

Experts said that after the pan-India success of blockbusters such as the two-part Baahubali and Pushpa franchises as well as RRR, streaming platforms eagerly picked up mass-market big-star vehicles from the region, paying anything from ₹250 crore to ₹350 crore for the OTT rights. However, with paid subscriptions having hit a glass ceiling, it is clear that even the biggest theatrical hits do not justify such high acquisition rates.

Dicey market

“OTTs have pulled the plug across languages and while producers had easy access to them earlier with no challenges to selling digital rights, that isn’t the case anymore. The OTT market is very dicey now and nobody is buying easily since they have no clear answers on what will help make money,” independent trade analyst Sreedhar Pillai said.

The other challenge for the Telugu film business, experts emphasized, could arise from high ticket prices. As in the case of Allu Arjun-starrer Pushpa 2, which released last December, higher ticket prices even for highly anticipated, big-star films put off the price-sensitive southern audiences.

During the movie’s release, several fans expressed frustration over the high ticket prices, which ranged from ₹500 to ₹3,000, a decision taken by the producers and distributors. Out of the ₹1,255.76 crore made by Pushpa 2 in India, the dubbed Hindi version brought in about ₹829 crore, with the original Telugu version clocking ₹339.20 crore.

While price increases are more easily implemented in the northern states, where it is common for multiplexes to charge upwards of ₹400 for high-performing titles, the southern market still sees cinema as a means of entertainment meant for the common man at nominal rates.

In an older interview with Mint, Rahul Puri, managing director, Mukta Arts and Mukta A2 Cinemas, had said Pushpa 2 had done better in Hindi and there was pushback in the Telugu-speaking states given that the distributors did not allow for lower ticket prices, pricing out a significant portion of the audience.

“You can’t go berserk with ticket pricing else the business will be impacted. Producers have to remember it is the masses that bring in numbers,” said Yusuf Shaikh, business head of feature films at production and distribution firm Percept Pictures.