Tollywood struggles as OTT giants slash Telugu content budgets
Producers Face Financial Strain
By : BVS Prakash
Update: 2024-10-30 06:33 GMT
Tollywood is in the doldrums with digital brands like Netflix and Amazon Prime reportedly cutting down on their Telugu intake, while Disney Hotstar and Zee5 also slowing down these days to leave big OTT deals pending this year. ‘It is true that digital giants have reduced the intake of Telugu movies for some time and it has set alarming bells in the industry. It is a worrisome situation and most of the producers are clueless. For star-studded movies, digital rights cover a good amount of investment, but now we are in dire straits due to slash in OTT budgets,’ rues veteran producer C Kalyan and adds, “Riding on digital rates upswing a few years ago, superstars and directors hiked their pay cheques. Now that digital brands have reduced intake, will these stars and technicians cut down their pay and save producers from the financial mess,’ asks producer C Kalyan.
“Earlier, television satellite rights were better since they used to give us a check in advance once the film was launched. However, nowadays OTTs are not making any such payments. They are insisting on all clauses to be filled out on their 100-page agreements like how the film will do and the range of the box office success and so on and only then, they are willing to sign up for movies. They are insisting that producers release the film in theatres and based on its box office performance, they would consider any deal. Honestly, budgets are cut even for superstar films so imagine the plight of 80-odd small and medium-budget producers, “he adds.
He also claims that international brands came in faster into Tollywood and spent Rs 300 to 400 crores and popularised their brands among Telugu audiences and then slowed down. “In the last few years, they attracted Telugu viewers the world over to their respective platforms by screening their favorite star movies. Once membership subscription reached their expected levels, the digital giants' purpose was served. Eventually, they reduced deals for Telugu movies and now those viewers are watching their English and Korean web series and addicted to non-Telugu content. Their job is almost done since they have gained a strong subscription base,” he points out.
However, another top director, on condition of anonymity, asserts that Disney Hotstar and Zee 5 are planning to revive the financial support to Telugu movies. “Hotstar and Zee Studios are willing to procure Telugu movies since they understand the reach of Telugu movies these days. Zee is determined to pump in more money into Tollywood and back big-ticket films in the days to come,” he says and adds "Netflix and Amazon Prime used to procure big Telugu movies with crores of rupees and helped the producers to dish out more films. Cash-rich OTT giants together earmark Rs 300 to 350 crores per year for procuring content from Tollywood. After they reduced content procurement, It became difficult for producers to make films with young and middle-aged heroes. In the midst, Disney Hotstar bought a few Telugu movies and kept the show running."
Sharing a piece of advice to OTTs, C Kalyan says, "If a big film flops, 80% of its investment is wiped out. Whereas, brands will suffer lesser and manageable losses on small-budget films because of their limited investments. Corporate houses make big money in the Malayalam industry by betting on novel content, so they should apply the same formula here rather than reducing their budgets which will spell doom for Tollywood," he concludes.
“Earlier, television satellite rights were better since they used to give us a check in advance once the film was launched. However, nowadays OTTs are not making any such payments. They are insisting on all clauses to be filled out on their 100-page agreements like how the film will do and the range of the box office success and so on and only then, they are willing to sign up for movies. They are insisting that producers release the film in theatres and based on its box office performance, they would consider any deal. Honestly, budgets are cut even for superstar films so imagine the plight of 80-odd small and medium-budget producers, “he adds.
He also claims that international brands came in faster into Tollywood and spent Rs 300 to 400 crores and popularised their brands among Telugu audiences and then slowed down. “In the last few years, they attracted Telugu viewers the world over to their respective platforms by screening their favorite star movies. Once membership subscription reached their expected levels, the digital giants' purpose was served. Eventually, they reduced deals for Telugu movies and now those viewers are watching their English and Korean web series and addicted to non-Telugu content. Their job is almost done since they have gained a strong subscription base,” he points out.
However, another top director, on condition of anonymity, asserts that Disney Hotstar and Zee 5 are planning to revive the financial support to Telugu movies. “Hotstar and Zee Studios are willing to procure Telugu movies since they understand the reach of Telugu movies these days. Zee is determined to pump in more money into Tollywood and back big-ticket films in the days to come,” he says and adds "Netflix and Amazon Prime used to procure big Telugu movies with crores of rupees and helped the producers to dish out more films. Cash-rich OTT giants together earmark Rs 300 to 350 crores per year for procuring content from Tollywood. After they reduced content procurement, It became difficult for producers to make films with young and middle-aged heroes. In the midst, Disney Hotstar bought a few Telugu movies and kept the show running."
Sharing a piece of advice to OTTs, C Kalyan says, "If a big film flops, 80% of its investment is wiped out. Whereas, brands will suffer lesser and manageable losses on small-budget films because of their limited investments. Corporate houses make big money in the Malayalam industry by betting on novel content, so they should apply the same formula here rather than reducing their budgets which will spell doom for Tollywood," he concludes.