HYDERABAD: Single-screen theatre exhibitors across Telangana have warned of a statewide shutdown from May 1 if a decision is not taken by April 30 to implement the percentage revenue-sharing system.
At a South India exhibitors' meeting held in Bengaluru on March 11, participants resolved to introduce the percentage system in Telugu states as well. Except for Telangana and Andhra Pradesh, most single screens across the country already follow this model.
Exhibitors cite losses under rental system
Exhibitors say the current rental system is causing losses. In this system, theatre owners pay a fixed amount in advance to distributors for screening rights, regardless of a film's performance. This protects producers and distributors but leaves exhibitors exposed to losses if collections fall.
In contrast, multiplexes follow a percentage system, where revenue is shared between producers, distributors and exhibitors based on collections.
In Hyderabad, 23 theatres have already enforced the percentage system since April 3 after refusing to screen films otherwise. They currently receive 60% of collections in the first week, 50% in the second week and 40% in the third week.
Other exhibitors are now demanding similar terms. They said that under the current arrangement, distributors take either rental or percentage, whichever is higher, when a film performs well, while exhibitors bear losses when collections are poor.
Producers oppose shift citing recovery risks
Telangana has around 450 single-screen theatres, including 150 in Hyderabad. Exhibitors say single screens have been struggling to compete with multiplexes for the past five years. They point to declining footfall, rising operational costs and the impact of over-the-top (OTT) platforms.
They have also demanded that films should not release on OTT platforms for at least eight weeks after theatrical release to improve theatre occupancy.
Exhibitors argue that the percentage system is already in place in states such as Tamil Nadu, Kerala and Karnataka, as well as in Mumbai, Delhi and other North Indian markets.
However, producers and distributors have opposed the proposal. They say high production costs make revenue recovery difficult under a percentage model.
Exhibitors have urged government intervention, seeking regulation of ticket prices, tax relief and concessions on electricity charges to address the crisis.