Analysis: The ‘Debt’ Trap Behind Tollywood Glitter

From the outside, the Telugu film industry might look like a glittering star with loads of talent and financial resources. But on the inside, the situation is complete opposite.

The film industry may look glamorous on the outside, but inside it is fighting a brutal financial battle. Audiences discuss whether a film is a hit or a flop after release.

Today, however, even releasing a film itself has become a major victory due to the frightening conditions prevailing in the industry. Recently, the postponement of a big budget film because of old debt disputes has turned into a hot topic in trade circles.

This is not just the problem of one film. It is like a cancer affecting the entire Telugu film industry. In the past, film business functioned in an orderly way based on trust.

Once a film was announced, exhibitors or theatre owners would give advances to distributors, and that money would reach the producer. With this amount, the producer would make the film. Today, this chain has completely broken. Advances from theatres have almost disappeared.

As a result, producers are forced to depend entirely on external financiers and corporate companies. This is where the real problem begins. A major portion of the film budget goes into star hero remunerations.

After paying the hero and other cast costs, very little money is left. With that limited amount, producers cannot make a quality film or promote it properly, so they borrow money at high interest rates.

If a producer’s first film incurs losses, the second film is started to clear the earlier debts. The advances from the second film are used to repay the first film loans.

In effect, interest from one film gets added into the budget of another. If this cycle breaks at any point, multiple projects come to a halt. That is exactly what is happening now. When corporate funding is not recovered, these companies show no sympathy and approach courts to legally block new films.

They are not interested in emotions but only in recovery. Whether it is 20 crore or 25 crore, they make it clear that no reel will move until dues are cleared. Changes in the theatre system have also added to producer troubles.

Earlier, with more single screen theatres, producers received cash within a week of release and could quickly repay interest. Now multiplex culture dominates. Ticket money from multiplex chains reaches producers after several months. During this gap, interest keeps increasing. This burden again falls on the film budget.

Delayed payments from exhibitors and pressure from financiers are pushing producers into severe stress. At the same time, the digital and satellite rights market is no longer stable.

Two years ago, streaming platforms competed to buy films. Now the market has slowed and prices have dropped. Hopes placed on non theatrical revenue are fading. Despite having no funds in hand, films are announced for market buzz and later stalled or postponed due to lack of finance.

Heroes do not reduce their remuneration and corporate companies do not forgive dues. The only one crushed in between is the producer. To escape this debt trap, film budget calculations must change completely.

Spending should be based on market realities, not just star image. Otherwise, today one film has stopped and tomorrow ten more will follow.