By TN Ashok
Tamil cinema is heading towards a shutdown on September 1 that could leave more than 1,180 screens across Tamil Nadu with little or no fresh Tamil content, as producers lock horns with distributors and theatre owners in an unusually bitter fight over a seemingly technical question: how long should a film remain exclusively in theatres before it moves to OTT?
The answer demanded by exhibitors is eight weeks. Producers want to retain the present four-week window.
But beneath that four-week-versus-eight-week argument lies a much bigger battle over who controls the economics of Tamil cinema in the streaming age — producers who finance increasingly expensive films, distributors who take the commercial risk of releasing them and exhibitors who say audiences are deserting theatres because they know a film will be on their television or mobile phone within a month.
The Tamil Film Producers Council (TFPC), headed since February by G M Tamil Kumaran, and the Tamil Film Active Producers Association have announced that from September 1 there will be no new Tamil film releases. The proposed action goes further: shooting and post-production are also to stop. The producers have appealed to the Tamil Nadu government to intervene.
The immediate casualties could include films such as Sardar 2, Mandaadi and Demonte Colony 3, while the September release calendar is thrown into uncertainty.
A state with too few screens. The scale of the confrontation becomes clearer when one looks at the exhibition business. Tamil Nadu had 1,182 screens at the end of 2024 — 572 single screens and 610 multiplex screens, according to the Tamil Film Active Producers Association. That was up from 1,144 in 2018, but the composition has changed sharply: single screens have fallen from 721 to 572 while multiplex screens have increased from 423 to 610. The industry itself says Tamil Nadu would need around 2,000 screens for its 77-million population.
That shortage makes every screen fiercely contested. A major star film can open on hundreds of screens simultaneously and generate an extraordinary amount of money in its first week. But the very success of the multiplex and multi-screen model has shortened the theatrical life of films. Earlier, a successful film could occupy screens for several weeks. Today, exhibitors often recover the overwhelming majority of a big film’s theatrical business in the opening fortnight.
An older industry analysis estimated that 85-90% of the theatrical revenue of a big-budget Tamil hero film could arrive in the opening week, with most of the balance coming in the following week or two. That is the paradox at the heart of the present dispute.
If a star vehicle is going to make most of its money in the first two or three weeks anyway, why should the producer be forced to wait eight weeks before monetising the OTT rights? The exhibitors’ answer is equally straightforward: because the possibility of an early OTT release itself changes audience behaviour.
The exhibitors’ fear: “Why pay for a ticket?”; M Subramaniam, president of the Tamil Nadu Theatre and Multiplex Owners Association, has been arguing for months that the early arrival of films on streaming services is damaging theatre attendance.
His argument is simple. If audiences know that a film will arrive on OTT after three or four weeks, a section of them simply waits. “Why pay ₹200, ₹300 or more for a family theatre outing when the same film will appear on a streaming service within a month?” is effectively the exhibitors’ economic argument.
Why has home viewing destroyed the theater? A weekend theater family outing was common in the 70s, 80s, 90s, and even in early 2000. But everything changed with the electronics industry dumping flat screens and 43 inches to 100 inch TV screens at reasonable prices with a 5.1 surround system with dolby surround. One gets the same thrill as big screen at home with popcorn and nachos with much greater clarity and sharper picture on the TV screens.
Why blow Rs 2,000 on a theater outing when you can pay one time Rs 50,000 to Rs 1,20,000 for an 4k OLED TV to enjoy the film in theater like atmosphere and sound effects This is where the OTT scores over big screen and exhibitors are right about their argument that if theater goer knows the date of OTT release he skips the theater thereby denying the exhibitors of anticipated revenues.
Subramaniam has said films should move to OTT only after eight weeks and has blamed falling theatre attendance partly on the present three-to-four-week window. The distributors are making essentially the same case. The Tamil Nadu Film Distributors Association, whose president Arulpathy participated in industry discussions earlier this year, has backed the longer window.
The theatre owners and distributors have gone further by demanding a written assurance from producers that their films will not appear on OTT before eight weeks. Their position is that they will not screen new films unless producers accept that condition.
The producers see the matter differently. The cost of making a Tamil film has risen dramatically. Location shooting, overseas schedules, sophisticated action sequences, visual effects, technicians and, above all, star remuneration have pushed budgets upwards.
The South Indian star system is no longer a low-cost alternative to Bollywood. Rajinikanth, Kamal Haasan, Ajith, Vijay, Suriya and other leading stars command remuneration and commercial valuations comparable with major Hindi-film stars.
The producers therefore increasingly depend on a portfolio of rights to recover their investment: Tamil Nadu theatrical rights, other-state theatrical rights, overseas rights, satellite television, digital/OTT rights, Hindi-dubbing rights, music and other ancillary revenues.
And here lies the crucial economic reason producers oppose eight weeks. A longer theatrical exclusivity period can reduce the price an OTT platform is willing to pay.
Producer S R Prabhu has made precisely this argument: a longer theatrical window can result in streamers paying less for digital rights, leaving producers with a financial hole to fill. The numbers from the industry’s own trade data demonstrate how important OTT has become.
In January-June 2025, Tamil cinema’s estimated revenues included ₹640 crore from digital/OTT rights — about 40% of total producer revenues — compared with ₹350 crore, or 22%, from Tamil Nadu theatrical rights. Satellite rights accounted for another ₹200 crore. Overall, non-theatrical rights contributed 64% of producer revenues.
So, the dynamics of this changes the entire economics of filmmaking. The producer is no longer simply asking: “How much will this film earn at the box office?” He is asking: “How much can I recover before the film is released, and how much more can I make from theatres and subsequent rights?”
The OTT money is not equal to the box office. The distinction between theatrical and OTT economics is often misunderstood. If a star film costs ₹150 crore to make, it does not have to collect ₹150 crore at the box office for the producer to recover the investment. The producer may have already sold satellite, digital, overseas, dubbing and music rights.
Conversely, a ₹200-crore worldwide box office does not mean the producer has made ₹200 crore. Theatres, distributors and other intermediaries take their shares. OTT can therefore function as an insurance mechanism. But it is not an insurance policy available to every film.
Producer-author G Dhananjayan pointed out earlier this year that of 285 Tamil films released in 2025, only 135 eventually reached OTT platforms. Just 44 obtained outright OTT purchases before release; 91 went to streaming on revenue-share arrangements and 150 films got nothing from OTT.
That is a brutal statistic. The OTT market is effectively rewarding star power and commercially attractive content. Of 44 films bought outright in 2025, 22 were big-budget films and 16 were medium-budget films; only six were small films.
So, the producer of a Rajinikanth, Ajith or Suriya film has negotiating power with Netflix, Amazon Prime Video, Sun NXT or other platforms that the producer of a small film simply does not possess.
What happens between week four and week eight? This is where the dispute becomes particularly interesting.
For a blockbuster, much of the theatrical business may already have been captured by the end of week four. A fifth-to-eighth-week run therefore produces diminishing returns. The famous Malthusian theory starts operating after the 4th week.
But those four additional weeks can still be valuable to exhibitors because they provide exclusive access to the film. A successful film may continue generating occupancy, food-and-beverage sales and premium ticket revenues.
The producer, however, sees four weeks of foregone OTT monetisation. The exhibitor sees four additional weeks of protected theatrical business. Neither side is necessarily wrong. They are simply looking at the same asset from opposite ends of the revenue chain.
Tamil cinema is already a loss-making business; The producers’ case is strengthened by the industry’s overall economics. The TFPC has said Tamil cinema releases around 250 films a year and loses more than ₹700 crore annually, with most films failing to recover even half their investment.
That means the industry’s problem is not simply that theatres are losing money. Producers are losing money too.
Indeed, Tamil cinema is increasingly becoming a winner-takes-most business: a handful of major-star films generate enormous revenues while a large number of smaller films struggle even to obtain meaningful theatrical or OTT exposure. The producers therefore argue that imposing an eight-week rule across the board will further squeeze the very people financing the films.
Where do Rajinikanth, Kamal, Ajith and Suriya stand? There is considerable curiosity about the position of Tamil cinema’s biggest stars. But as of August 28, there are no verified public statements from Rajinikanth, Ajith Kumar or Suriya specifically endorsing either side of the present shutdown that can safely be attributed to them.
Kamal Haasan is a different case. He met Chief Minister Vijay in May and presented six proposals concerning the film industry, including a revision of OTT release windows to protect theatrical revenues, GST relief, promotion of Tamil film exports, action against piracy, censor reforms and a fund for independent filmmakers.
That does not amount to an endorsement of the present eight-week ultimatum, but it does show that Kamal recognises the OTT-theatre imbalance as a structural problem.
And what about Chief Minister Vijay? This may ultimately be the most important question. Joseph Vijay is not merely Tamil Nadu’s chief minister. He is himself one of the state’s biggest former box-office stars. His political career was built on an extraordinary relationship with the Tamil cinema audience.
That gives him an unusual ability to summon the principal combatants to the same room. His government has already shown an interest in cinema economics. In May, it changed the rules to permit five shows a day for new Tamil films during their first seven days, including expanded provisions for weekends and holidays.
The producers are now explicitly asking the government to intervene. Vijay therefore has a potential role as mediator rather than regulator. A compromise could involve different windows for different categories of films: perhaps eight weeks for films without pre-existing OTT commitments, while honouring existing four-week contractual agreements; or a sliding window based on budget, star value and theatrical performance.
Indeed, industry veterans have already floated the possibility that an eight-week window could apply to fresh films that have not yet locked in OTT deals. That may be the escape route.
The likely compromise; The economic reality makes a total victory for either side unlikely. Theatres cannot survive if every major film disappears onto OTT after four weeks. Producers cannot survive if they are forced to surrender valuable digital revenue for an additional month after their theatrical momentum has largely peaked.
And the thousands of technicians, lightmen, drivers, junior artistes and other workers who depend on continuous production cannot afford a prolonged shutdown. FEFSI has already urged producers to reconsider the action, warning of serious consequences for film workers.
The solution may therefore be neither four weeks nor eight. It could be a negotiated hybrid window: eight weeks for films where exhibitors have genuinely invested in a longer theatrical run, four weeks where contractual OTT agreements already exist, and perhaps performance-based extensions for blockbusters.
That would preserve the theatre as the premium first window without destroying the producer’s ability to monetise digital rights. For Chief Minister Vijay, the challenge is to persuade two sides that are both economically vulnerable that the survival of Tamil cinema is not a zero-sum game.
Because the real danger is not that an individual film will lose four weeks of theatrical exclusivity. It is that Kollywood itself may discover that its old business model no longer works — and that neither the theatre nor the OTT platform alone can pay for the increasingly expensive machine that produces Tamil cinema. (IPA Service)
