Explained: The Telangana Theatre Dispute That Could Impact Ram Charan’s Peddi

For years, Telugu cinema has proudly been called one of India’s strongest theatrical industries. Massive first-day celebrations, packed single screens, cut-outs touching rooftops and fans bursting crackers outside theatres became part of its identity. But behind all that noise and celebration, many theatre owners in Telangana now say they are barely surviving.

What began as a disagreement over revenue-sharing has now exploded into one of the biggest industry standoffs in recent years, putting producers, distributors and theatre owners directly against each other. And unexpectedly, Ram Charan’s upcoming big-ticket film Peddi has landed right in the middle of the controversy.

The fight is no longer just about one film. It is about whether single-screen

theatres in Telangana can continue to survive at all.

What Exactly Is Happening?

Single-screen theatre owners across Telangana are demanding a major change in the way films are released and revenue is shared in theatres. According to exhibitors, the current system has become financially impossible to sustain.

At present, many Telugu films operate under what is called a “rental system” or “fixed-hire model”.

In this setup, theatre owners pay distributors or producers a fixed amount to screen a movie, regardless of whether audiences turn up or not. This means exhibitors carry most of the financial risk.

If a film becomes a blockbuster, producers and distributors benefit. But if a film underperforms, theatre owners still have to pay the agreed rental amount while also handling electricity bills, staff salaries, maintenance, air-conditioning costs and taxes.

Exhibitors now say this system is slowly destroying single-screen cinemas.

“It is an existential crisis for single-screen theatre owners,” Vishek Chauhan, CEO of Roopbani Cinema in Bihar, told Economic Times.

“On the one hand, they pay a fixed fee to distributors irrespective of the performance of films. On the other hand, they do not have a say in the choice of films they want to showcase or even in the number of shows,” he explained.

Why Are Theatre Owners Angry Now?

The anger has been building for years, but things became worse after the pandemic. Audience habits changed drastically after Covid-19. People became more selective about which films they wanted to watch in theatres. OTT platforms also became stronger, making viewers comfortable waiting for digital releases instead of rushing to cinemas.

At the same time, running a theatre became more expensive. According to exhibitors, daily operational costs for several single screens now range between Rs 12,000 and Rs 18,000. In smaller towns, many theatre owners say collections often do not even cover basic expenses on weekdays.

Trade analysts say the situation is especially difficult for single-screen cinemas because multiplex chains already follow a percentage-sharing model, which is considered safer.

“Exhibitors that are part of national chains have more favourable terms, as they follow the percentage model to the hilt,” Chauhan added.

This has created frustration among smaller exhibitors, particularly in Telangana, where single screens still form a huge part of the theatrical business. India currently has close to 5,000 single-screen theatres, and nearly 70 percent of them are located in South India, according to trade analysts. Telangana alone reportedly accounts for nearly 10-11 percent of South India’s single-screen capacity.

What Do Theatre Owners Want?

The Telangana Exhibitors Association has proposed shifting from the rental system to a percentage-based revenue-sharing model.

Under the proposed arrangement:

– Producers/distributors would receive 60 percent of box-office collections during Week 1
– 50 percent during Week 2
– 40 percent from Week 3 onward

Exhibitors argue this model is already followed successfully in several other parts of India and would help struggling theatres survive.

Their argument is simple: if everyone shares profits during hits, everyone should also share risks during flops. Several theatre owners have also promised that ticket prices will not be increased if the new model is accepted.

Why Are Producers Worried?

Producers, however, are dealing with a crisis of their own. Over the last few years, Telugu cinema has aggressively expanded into the pan-India market. Films are now being made on much larger budgets, with nationwide promotions, multilingual releases and huge production costs.

At the same time, actor remuneration has skyrocketed. “A key reason for weak box-office revenues in the Telugu and Kannada markets is the pan-India ambitions of stars and filmmakers in these industries,” Chennai-based trade analyst Ramesh Bala said.

“As a result, stars have not only reduced the number of films they release each year but have also increased their fees. These developments have put producers in a vulnerable position.”

Producers say changing the revenue model suddenly could create further instability, especially when the industry is already facing unpredictable theatrical business.

According to the FICCI-EY 2026 Media and Entertainment report, large-scale pan-India films are increasingly dominating screens and reducing space for medium-budget regional films.

“Large-scale, multilingual releases are increasingly dominating screens, often compressing theatrical windows for mid-budget and regional-language films,” the report noted. The same report also revealed that the gross box office of South Indian films dropped from Rs 7,000 crore in 2024 to Rs 6,000 crore in 2025.

Why Has Ram Charan’s Peddi Become The Centre Of The Fight?

The situation intensified because the exhibitors’ protest coincided with the release of Peddi, one of the biggest Telugu releases of the year. Directed by Buchi Babu Sana, the sports action drama stars Ram Charan alongside Janhvi Kapoor, Shiva Rajkumar, Jagapathi Babu and Divyenndu. The film is produced by Venkata Satish Kilaru under Vriddhi Cinemas, co-produced by IVY Entertainment and presented by Mythri Movie Makers and Sukumar Writings.

Trade circles believe Peddi is expected to open huge at the box office and possibly revive theatrical business after months of underwhelming releases.

But exhibitors across Telangana warned that theatres may refuse to screen the film unless discussions over revenue-sharing are taken seriously.

Theatre owners insist they are not targeting Ram Charan or the film specifically. Instead, they say the release window of a massive film gives them leverage to push for reforms they have been demanding for years.

Still, the possibility of a boycott has sent shockwaves through the Telugu film industry because Peddi is seen as an extremely important release for both theatres and producers.

Why Single Screens Are Disappearing Across India

The Telangana dispute has also exposed a much larger national problem. According to the FICCI-EY report, India shut down 124 screens in 2025, most of them single screens. During the same period, around 225 new screens opened, largely multiplexes.

The report also stated that in several Hindi-speaking regions, some theatres now operate only during weekends or major releases because daily business is too weak.

This reflects a growing divide in India’s theatrical business:

– Multiplexes are surviving with premium pricing and urban audiences
– Single screens are struggling with falling footfalls and rising expenses
– Mid-budget films are disappearing quickly from theatres
– Only giant star-led spectacles are consistently pulling audiences

Trade experts say Telugu cinema’s pan-India boom has unintentionally worsened this imbalance.

Big films now occupy more screens for longer periods, while smaller films barely get breathing space. Meanwhile, when large films fail, the losses become enormous for exhibitors locked into expensive rental deals.

What Happens Next?

Right now, discussions between exhibitors and producers are continuing, but tensions remain high. Some top single-screen theatres in Telangana have reportedly already started independently moving toward percentage-sharing models. Others are waiting for an official industry-wide resolution.

Meanwhile, everyone in the industry knows one thing: neither producers nor exhibitors can afford a complete breakdown. Producers need theatres to recover massive investments. Theatres need star films to bring audiences back. And audiences ultimately suffer when disputes affect releases.

For many older theatre owners, this fight is emotional too. Single-screen cinemas were once the heart of movie culture in Telugu states. Families grew up watching first-day-first-shows there. Fans celebrated stars there. Entire local economies revolved around those theatres.

Now many owners say they are simply fighting to keep those cinema halls alive.