Single Screen Theatres Threaten Shutdown Over Revenue Sharing Dispute

A brewing standoff between exhibitors and producers threatens to disrupt Tollywood's theatrical landscape as single screen theatres in Telangana push for a fundamental change in revenue sharing.

The Telangana Film Chamber has decided to replace the traditional rental system with a percentage-based model similar to multiplexes, but the Producers Guild is having none of it. This isn't just a business disagreement: it's a clash over the very economics that keep Telugu cinema's exhibition sector alive.

Under the current rental system, producers pay a fixed amount to theatre owners regardless of a film's performance. It's predictable but increasingly unsustainable for exhibitors who claim they're bleeding money as operational costs soar while footfalls decline. Even big-budget films aren't delivering the consistent collections they once did.

The proposed percentage model would give theatres 60% of collections in the first week, 50% in the second, and 40% in the third: a dramatic shift that exhibitors say reflects the actual risk-reward dynamics of film exhibition. Around 23 single screens in Hyderabad are already testing this system.

But producers see this as financial suicide. With production costs already spiraling and theatrical revenues under pressure from OTT platforms, handing over such large percentages would squeeze their margins even tighter. The Guild has drawn a line in the sand: stick with rentals or lose access to our films.

What makes this particularly volatile is the institutional power play. The Film Chamber feels sidelined by the Guild's unilateral stance, viewing it as an affront to the industry's traditional hierarchy. They've set April 30 as the deadline for resolution, with threats of a complete single screen shutdown from May 1 if the impasse continues.

This dispute exposes deeper structural problems in Telugu cinema's exhibition sector. Single screens, once the backbone of mass entertainment, are struggling to survive in an ecosystem dominated by multiplexes and streaming platforms. The percentage model might save some theatres, but it could also price out smaller producers who depend on predictable rental costs.

With summer releases hanging in the balance, both sides need to find middle ground fast. A complete shutdown would hurt everyone: exhibitors would lose revenue entirely, while producers would lose crucial screens in smaller towns where single screens remain the primary entertainment option.