With ₹700 crore loss in 2024 and star salaries taking up 50% movie budget, why future looks bleak for Malayalam cinema

While the Malayalam film industry is hailed for its authentic stories, excellent storytelling and stellar performances, it now seems to be facing some severe turbulence. As reported earlier, the Kerala Film Producers’ Association (KFPA) had stated that the Malayalam industry incurred losses of ₹650-700 crore in 2024. According to the president of the Film Chamber of Kerala, producer G Suresh Kumar, Mollywood faced losses of nearly ₹100 crore in January this year with only Asif Ali’s Rekhachithram making profits at the box office. (Also read: With ₹1000-crore loss and 223 flops, 2024 spelled one of the worst years for Tamil cinema)

Given that these losses are significant for a film industry that is much smaller than the Tamil or Telugu one, last week, a joint meeting was held between producers’ associations, exhibitors, distributors, and the Film Employees Federation of Kerala (FEFKA), in order to determine how to course-correct. Post the meeting, G Suresh Kumar told the media that production, distribution, and exhibition of Malayalam cinema will shut down from June 1 if the financial issue is not sorted out.

Star Remuneration Issue

One of the major factors cited by Mollywood film producers, including Suresh Kumar, was the high remuneration for the actors and even some of the technicians. However, this has been a bone of contention not just in Malayalam cinema but other industries as well and has been debated for years. “Many producers are in a dire situation of leaving the country. Malayalam cinema is currently in a situation where no producer can make a film in any way. Stars are receiving a remuneration that we cannot even imagine. We will not move forward without stars reducing their remuneration,” Suresh Kumar told Mathrubhumi.

Well-known entertainment industry tracker Sreedhar Pillai explains, “First and foremost across any Indian film industry, the producer is on the decline; he has absolutely no power. The best period producers had was from the 1960s to the late 1990s. This was a period when the producer called the shots and determined the salaries of heroes. Now, producers have lost their hold on the industry and it’s difficult to survive as actors have become more powerful. Stars themselves have become production houses and when they work for a producer, their salary is up to 50 to 60 per cent of a film’s budget. Stars live in an illusionary world and when they become successful, they don’t want to reduce their salary. It is human nature. Old-time Malayalam producers are asking why they should work with stars but like in the Tamil film industry, there are 1000s of Shankars waiting to get a star’s dates.”

Trade analyst Ramesh Bala also agrees with this, adding, “Historically, Malayalam movies were made on a shoestring budget. It would be just 20 days shoot in total. Luxury hotel accommodation for stars, caravans, and so on, came late to Mollywood. And now, they are aping the Tamil and Telugu film industries and star salaries have gone up, they are shooting in foreign locales, and so on. Given that the Malayalam film market is small as compared to Tamil and Telugu, the collections won’t be on par. So, producers are now trying to control these spiralling costs.”

OTT and satellite rights issue

When the Covid pandemic hit the world, the Indian film industry, while facing severe losses, made significant strides on OTT with many films sold for whopping amounts. Since then though OTT platforms have changed their content buying criteria and terms and this has caused an impact on the Indian film industry, including Malayalam cinema. Star films too, for instance, are only getting 50 to 60 percent of what they were getting two years ago by OTT platforms state industry insiders. “Hardly any film is getting sold these days to OTT platforms. Parallel to this situation, the cost of production has skyrocketed, landing producers in a crisis. Why should producers continue to make films bearing losses?” questioned G producer Suresh Kumar recently.

“The fallout of OTT and satellite rights is also an issue not just in Malayalam, even in Tamil. Today, even Tamil big films are getting only 50 to 60 percent of what they received two years back for their films, with a rider the streaming platform will decide theatrical release date. OTT platforms don’t want to buy small films as they don’t see a profit in that. Thus, these producers now have to depend only on the theatrical to make money. 2024 was a great year for small films in Malayalam (e.g Manjummel Boys, Premalu, Kishkindha Kaandam). My advice is that Malayalam producers should make small films with good content for theatres – this way they can survive and sustain in the industry for a long time,” opined Sreedhar Pillai.

Another issue that the Malayalam film industry bodies have highlighted is the high entertainment tax and the Goods and Services Tax (GST). G Suresh Kumar said that Mollywood was being taxed at 30 per cent which includes both the GST and entertainment tax. According to him, the government should withdraw this tax since this contributed to unsustainable costs.

The concern for the sustainability and survival of the Malayalam film industry seems to have reached its peak and a team from the various film bodies is expected to meet Kerala Chief Minister Pinarayi Vijayan soon. Meanwhile, the film producers’ association has also stated that if the financial issues were not sorted out, it would reveal actors’ real salary figures, especially those who are demanding exorbitant amounts non-commensurate with the market. Will this stand-off continue or will the issues get resolved by June 1 remains to be seen.