The Malayalam film industry is facing unprecedented financial turmoil as 2024 progresses, with the Kerala Film Producers Association (KFPA) warning of losses ranging from ₹650 crore to ₹700 crore. This announcement emerges amid what had been described as one of the more successful years for the industry, with several films gaining recognition across diverse audiences.
Surprisingly, only 26 out of around 200 films released last year managed to recover their investment, leaving many producers deeply concerned about the industry's sustainability. Suresh Kumar, producer and president of the Film Chamber, addressed these growing worries during a recent press conference, describing the alarming financial state and expressing his frustration over the rising demands for higher compensation from actors.
"Our industry is now in turmoil," Kumar emphasized, "with only 24 successful films out of the 200 released last year, leading to significant financial losses." The reporting from various sources indicates this situation has persisted even as 28 films were released just last January, only one of which, Rekhachithram, emerged as a major success. The rapid expansion of film production juxtaposed with rising costs paints a stark picture of the contrasting realities within the industry.
One core issue highlighted by the KFPA is the high remuneration demanded by lead actors, which has become increasingly burdensome amid rising production expenses. Kumar lamented, "New-age actors do not appear to recognize the detrimental impact their actions have on producers when movies flop. They are unwilling to agree to lower fees, even when faced with economic uncertainties."
Industry observers note this mentality contrasts sharply with practices from previous generations, who understood the need to adjust pay according to market realities.
This growing discontent among producers has led to proposals for strikes beginning June 1, potentially halting new film productions until the economic concerns are addressed. Industry insiders are skeptical about the efficacy of such strikes. For example, some believe the decision to strike might not effectively mitigate rising remuneration demands, particularly as public sentiment grows increasingly polarized between actors and producers.
Further compounding the industry’s struggles is the financial burden imposed by government regulations, including entertainment taxes alongside the Goods and Services Tax (GST), which amounts to approximately 30% of gross earnings from films. According to Kumar, "If a film grosses ₹100 crore, ₹30 crore goes to the government, leaving producers with only about ₹27 crore." This significant tax burden has only heightened discontent among producers who feel inadequately supported by the government.
Adding to the complexity, Kumar mentioned the impact of the COVID-19 pandemic, which encouraged many industry players, including actors and technicians, to establish their own production houses, driven by the growing popularity of OTT platforms. Kumar pointed out, "Many new production houses were created with the hope of profiting from OTT deals. Unfortunately, as the terms of those deals changed, the expected profits have not materialized, resulting in disillusionment among those who entered the field post-pandemic."
This has led to fluctuations within the industry, creating uncertainty as established actors and rising stars vie for notable projects.
Recent decisions around film releases have also raised eyebrows, with postponements like Mohamed Lal’s Thudarum, indicating how OTT negotiations influence theatrical schedules. Kumar revealed, "We have witnessed producers face substantial losses due to budget overruns on projects. One example, the film Sureshanteyum Sumalathayudeyum Hridhayahaariyaya Pranayakatha, originally budgeted at ₹4 crore, ballooned to ₹20 crore." Such examples of mismanagement have fueled critiques aimed at both producers and stars amid mounting industry tensions.
With the pending strike announcement looming, reactions from various sectors of the film community are mixed. While some support producers' claims of unjust demands from actors, others caution against the effectiveness of strikes as the best solution. An anonymous scriptwriter voiced skepticism, stating, "This may be more about masking other issues within the producer community rather than merely addressing valid concerns about remuneration and production costs." This indicates the multi-layered nature of this financial crisis.
Despite the turmoil, several quality films have emerged from Mollywood, drawing appreciation from audiences. Yet, fears persist about the ramifications of financial constraints on future productions. A journalist from the industry, wishing to remain anonymous, shared, "While I understand the frustrations expressed by producers, the reality perpetuated might directly influence the quality we aim to achieve. Cost-cutting measures could upset the standards we've built."
Unfortunately, responses from leading actors about the current situation have yet to surface, leaving many questions unanswered. The impending strike and the industry's financial climate pose significant challenges, with many eagerly awaiting developments as the June deadline approaches.