Why Tollywood Heads Fighting Ahead of Peddi Release

The Telugu film industry is witnessing a major divide between exhibitors and producers over the long-debated theatre revenue-sharing model. The conflict intensified ahead of the release of director Ram Charan's much-awaited film Peddi, co-starring Janhvi Kapoor, scheduled for release on June 4.

The Telangana Exhibitors Association has been demanding the immediate implementation of a percentage-based revenue-sharing system in place of the existing fixed rental model followed in single-screen theatres across the Telugu States. Producers, however, argue that introducing a new system abruptly could severely impact the revenues of several films already in production and awaiting release.

The disagreement escalated over the past week after both sides chose to address the media publicly rather than continue internal discussions. At one point, exhibitors even warned that single-screen theatres in Telangana might refuse to screen Peddi if their demands were not considered. However, following a meeting involving more than 50 producers, producer Dil Raju announced that a committee comprising representatives from various industry bodies would be formed to find a mutually acceptable solution. He also clarified that Peddi would release without any hurdles.

What Is the Existing Fixed Rental Model?

Under the prevailing system, single-screen theatres pay distributors or producers a fixed rental amount to screen a film. The amount is determined based on factors such as theatre capacity, location, and the expected commercial potential of the film.

This payment must be made irrespective of the film’s box office performance. Exhibitors argue that the system has become financially unsustainable, especially during periods when films fail to attract audiences. According to theatre owners, their earnings depend entirely on ticket sales, making it increasingly difficult to recover both rental costs and operational expenses.

Exhibitors also claim that more than 100 single-screen theatres across Telangana have shut down over the past three years due to declining revenues and poor footfalls.

What Is the Proposed Percentage Revenue System?

The proposed model suggests a percentage-based sharing of box office collections between exhibitors and producers/distributors. As per discussions, producers and distributors may receive around 55% to 60% of the collections during the first week, while exhibitors would get 40% to 45%. From the second week onwards, revenues would likely be shared equally.

This system is already being followed by multiplex chains across the country. Exhibitors believe adopting the same structure for single screens would reduce financial risks during weak theatrical runs.

Why Are Exhibitors Pushing for the Change?

Representatives of the Telangana Exhibitors Association, including exhibitors-producers Suniel Narang and Sirish Reddy, stated that most other States in India already operate on a percentage-sharing basis.

They pointed out that Telugu producers willingly follow the percentage system while releasing pan-Indian films in other States, but continue to insist on the fixed rental pattern within the Telugu States.

Exhibitors also maintain that falling footfalls, longer gaps between major releases, and rising operational costs have pushed single screens into crisis. They argue that unless revenues improve, upgrading theatres with better projection systems, sound quality, and audience amenities will remain difficult.

Producers Raise Concerns Over Timing

Prominent producers including Yalamanchili Ravi Shankar of Mythri Movie Makers, Suryadevara Naga Vamsi of Sithara Entertainments, Sahu Garapati, Sudhakar Cherukuri, and Venkata Satish Kilaru also addressed the media to explain their position.

Ravi Shankar stated that producers and distributors are equally under financial pressure and such structural changes cannot be implemented overnight. He also questioned why the issue was being aggressively raised just before the release of a major film like Peddi, which is expected to bring audiences back to theatres.

Producer Naga Vamsi pointed out that several films currently under production have already exhausted 70–80% of their budgets under the existing business model. According to him, changing the system midway would create financial complications for producers.

However, producers indicated that they are open to discussing the percentage system for future projects, provided there are parallel discussions regarding theatre grading, maintenance standards, and online ticket booking convenience fees.

Bigger Issue: Declining Theatre Footfalls

Industry insiders believe the conflict also reflects a larger crisis facing Telugu cinema — declining audience turnout in theatres. Since the Sankranti season, very few Telugu films have managed to generate strong theatrical buzz.

The lack of major releases, delays in pan-Indian productions, shorter OTT windows, and weak content have all contributed to poor box office performance. The IPL season has also been cited as one of the reasons for reduced evening theatre attendance.

Apart from Adivi Sesh starrer Dacoit, which released on April 10 and drew some attention, most recent releases have failed to make an impact. Even Samantha Ruth Prabhu’s Maa Inti Bangaaram was postponed from May to June.

Industry Expected to Resolve the Issue Before Peddi Release

While talks between exhibitors and producers are expected to continue in the coming days, industry observers believe a temporary resolution is likely before the release of Peddi. However, many within the industry feel the real concern extends beyond revenue-sharing models.

According to several producers and trade analysts, delayed productions, rising budgets, lacklustre storytelling, and dwindling audience interest in theatrical content are deeper issues that require urgent attention.

As one senior producer reportedly remarked, “The bigger worry is that audiences are no longer excited to come to theatres for our films.”