Digital platforms and Telugu cinema: Has the bubble burst?

The OTT rights for one of this year’s Telugu box office hits, Thandel, was reportedly bagged by Netflix for over ₹45 crore. The film directed by Chandoo Mondeti, starring Naga Chaitanya and Sai Pallavi, was made on a budget of nearly ₹75 crore. The massive hit, Sankranthiki Vasthunam, produced with a budget of around ₹50 crore, reportedly sold its digital rights to Zee5 for nearly ₹30 crore. Such pre-release deals help the makers recover a substantial portion of their production costs. 

However, not all films get lucky. For every film that secures a lucrative deal for digital rights, several others have to contend with lower prices or find no takers. Digital platforms that were eager to acquire new films during the pandemic to consolidate their subscription base, are now tightening their purse strings and setting terms.

What worked in case of Sankranthiki Vasthunam were the previous blockbusters delivered by Venkatesh-Anil Ravipudi duo. Thandel benefitted from the presence of director Chandoo Mondeti of Karthikeya 2 fame, the Naga Chaitanya–Sai Pallavi collaboration after Love Story, and production house Geetha Arts.

Leading digital platforms are said to be purchasing films going by the box office track record of the lead actor, director or the production house, and dictating the release dates to suit their digital release calendar. For instance, films sign up for either a four-week or eight-week window  following the theatrical release after which the films will stream digitally. The platforms prefer to stagger the films for streaming, for better viewership.

Lockdown boom

Director and producer Sai Rajesh, whose 2023 film Baby was a massive hit, explains, “There is no dearth of films being made, ever since the industry sensed the digital potential during lockdowns. But the business model of digital platforms has changed since then.” 

At the time, several films made with modest budgets and not boasting a star cast also found takers. Some caught the attention of viewers while others went unnoticed. As digital platforms analysed viewing patterns, they began favouring films that generate pre-release buzz in the form of music, teaser and trailer. 

“Film units cannot take things for granted. If the pre-release content generates audience interest, there is a better chance of bagging digital rights for a good price. Else, OTTs prefer that the film is released and then decide on the price, going by the box office reception,” says Sai Rajesh.

His own film is an example. His production, Colour Photodirected by Sandeep Raj, had a massive viewership after its direct digital release during lockdown. Baby, which he directed, benefitted from the musical album composed by Vijai Bulganin. One of its principal actors, Anand Deverakonda, had become a household name during the pandemic thanks to Middle Class Melodies, but Vaishnavi Chaitanya and Viraj were new names. The pre-release buzz generated by the audio and the teaser did the trick.

The change in digital strategy, say industry insiders, was inevitable. A director says on condition of anonymity, “The OTTs decide everything. Not just the release date, even the combination of actors and directors and within what time frame they want a film to be completed. Apart from films starring A-list actors or those who are delivering consistent box office hits, it is a struggle for everyone else. Since OTTs were buying films for a good price and producers were confident of getting returns, the remuneration of actors had gone up. Now, it would be prudent for producers and directors to work within their estimated theatrical returns and not count on digital rights until the deals are finalised.”

Hit trail

Among the small and medium range productions, a recent success story is that of Court: State Vs A Nobody. Reportedly produced on a budget of around ₹10 crore, the digital rights were reportedly sold for ₹8 crore prior to its theatrical release. A major reason cited is the film’s producer, actor Nani’s streak of success. The film starring Priyadarshi, Roshan, Sridevi and Sivaji, directed by first-timer Ram Jagadeesh, reportedly crossed the ₹50-crore mark in the first two weeks of its theatrical run. 

Roshan and Sridevi in ‘Court: State Vs A Nobody’
| Photo Credit:
Special Arrangement

The Netflix slate of new Telugu film acquisitions unveiled in January 2025 included OG, Kingdom, HIT: The Third Case, Thandel, MAD Square, Mass Jathara, Jack, Court: State Vs A Nobody, and Anaganaga Oka Raju. All these films boast production houses, actors or directors with a success streak.

The digital boom during the pandemic came as a boon to makers of small and medium budget films. It was not very different from the multiplex boom in the early 2000s. Eventually, both multiplexes and digital platforms turned their gaze on money spinners and began to prefer well known names.

In film circles, it is well known that several films made with budgets of ₹3-5 crore find no takers for theatrical release. Even if they do, there is no guarantee for OTT sales. Some are even willing to give their films for free, or opt for pay-per-view models, but platforms are not interested.

A few producers who are in talks with platforms for their next films refrained from commenting. The digital platforms too did not respond.

Digital fatigue

Venkat Siddareddy, who was part of production teams of indie films such as Mallesham, 8 A.M. Metro, and played a crucial role in helping the theatrical release of C/O Kancharapalem, reasons that the change in strategy could also stem from the ‘digital fatigue’, where viewers are bombarded with way too many films and series. “Are we watching as much as we used to during lockdowns?” he asks.

The thirst for new content during the pandemic had led to a spurt in production. As soon as lockdown restrictions were lifted, studios in Hyderabad were abuzz with film and web series productions. Industry representatives had told this journalist back then that the units were working at such a brisk pace that it was tough to rent technical equipment at short notice for shootings. However, the spurt in quantity did not translate into quality. 

The takeaway from the scenario, says Venkat Siddareddy, lies in film teams having to wake up to the reality that they have to offer a refreshingly new experience to viewers to be able to draw attention. “Last year’s film, KA, is an example. Portions of the climax took the audience by surprise and the word-of-mouth publicity ensured that the theatres filled up.”

Further, he says it is imperative that producers do not overshoot the budget. “There needs to be a rethink in the method of work. We don’t have the luxury of taking digital rights for granted any longer.”