Old Guard Faces New Rivals

The long-standing monopoly over film distribution in the two Telugu states appears to be under pressure; many leading producers are joining forces to challenge the status quo. Actor Nagarjuna Akkineni’s foray into film distribution in Andhra Pradesh and Telangana is expected to change the landscape in the coming years.

According to industry sources, Annapurna Studios has set up a distribution office in Hyderabad and is now set to open another one in Visakhapatnam, signaling a major expansion in both the Telugu states. Leading producers like Naga Vamsi, Sahu Garapati and Sudhakar Cherukuri are reportedly set to collaborate with Annapurna Studios to form a syndicate that will both produce and distribute the films.

Old players are inactive

“It is not a threat to us at all. Earlier there were 30 to 40 distributors and only a few have survived. It is an open business and there is room for everyone. I have seen many distributors come and go. In Telugu states, anyone can open an office and distribute; there is no need for a special license,” says D Suresh Babu, producer, exhibitor and distributor.

With big-ticket films like Toxic, Dhurandhar 2, Pawan Kalyan’s Ustaad Bhagat Singh and Ram Charan’s Peddi slated for release in March and April, distributors are naturally gravitating towards star-driven projects. “Star films have always attracted the attention of distributors and there is nothing wrong with that. I have personally seen both good and bad phases in the distribution business. Sometimes the good days last longer, sometimes the bad days. One has to survive,” added Suresh Babu.

Distributors are fraudulent, manufacturers are at a loss

But another manufacturer said the latest moves were driven by growing dissatisfaction with a lack of transparency and alleged delays in payments from an existing distributor. “A distributor failed to honor its financial commitments to a producer, forcing him to sever ties and join the union,” said the producer, who spoke on condition of anonymity.

A film sold for 30 billion rupees earned only 22 million rupees and the distributor asked the producer not to charge more. Even blockbuster collections of hit films fail to fully reach the producers.”

The manufacturer added that previously daily collection reports (DCRs) were routinely shared, but the practice has largely disappeared. “Even when a movie breaks box office records, producers don’t experience overflow. This is extremely unfortunate.”

As a result, the distribution ecosystem in Andhra Pradesh and Telangana is witnessing volatility. Production company Mythri Movie Makers has been active in distribution for the last two years, releasing both big budget and small films. Established exhibitors-turned-distributors like Suresh Babu, Allu Aravind, Dil Raju and Suniel Narang control more than 500 theaters and also 200 screens in Telugu states. Mythri Movie Makers reportedly operates in around 60 theaters and is constantly expanding its distribution footprint.

Producer Lagadapati Sridhar expressed strong concerns about the current system. “I hope there will be more transparency in the distribution business in Telugu states. Currently, the manufacturer is at the mercy of the distributor like a king turned into a pawn,” he said, urging distributors to make payments on a weekly basis.

“With bookings largely online, collections must be transparent. Despite technological advances, producers have to wait around 100 days to get their money back. A new union that breaks monopoly and introduces integrity will be widely welcomed,” he said. Citing the example of Rentrak in the US, which provides real-time, theater-by-film box office data, he added: “This will be a game changer.”

He also noted that although star-driven films generally receive advance payment and are relatively safe, producers of about 80 mid- and small-scale films each year remain uncertain about their returns, often waiting indefinitely for payments. “More players coming into distribution will definitely bring transparency and accountability,” he said.

Many distributors came and went

He is absolutely not a threat to us. Previously there were 30 to 40 distributors and only a few survived. This is an open business and there is room for everyone. I have seen many distributors come and go. Anyone can open offices and distribute in Telugu states; “There is no need for a special license.”

D Suresh Babu, Manufacturer, exhibitor and distributor

There must be transparency

I hope more transparency is brought to the distribution business in Telugu states. Currently, the producer is at the mercy of the dealer, like a king turned into a pawn.”

Lagadapati Sridhar, producer

Producers are being deceived

A distributor was unable to meet his financial commitments to a manufacturer, forcing him to sever ties and join the union. A film sold for 30 billion rupees earned only 22 million rupees and the distributor asked the producer not to charge more. Even blockbuster collections of hit films fail to fully reach the producers.” — A producer