Telangana Government 20% Levy Draws 'Mixed' Response

The Telangana government has issued fresh directions on the sharing of additional revenue generated through movie ticket price hikes, making it mandatory for 20 percent of the incremental revenue to be contributed to the welfare fund for Telugu film industry employees.

According to the latest orders, the 20 percent welfare contribution will be paid to the Telangana Film Development Corporation (TGFDC) and deposited into a designated account for the welfare of employees working in the Telugu film industry. The government has authorised producers to collect the applicable contribution from exhibitors on the additional revenue generated through increased ticket prices.

The directive will apply to films including Akhanda 2, The Raja Saab, Mana Shankara Vara Prasad Garu and Peddi. Letters have been issued to the respective production houses, including 14 Reels Plus LLP, People Media Factory, Shine Screens India LLP and Vriddhi Cinemas LLP, authorising them to collect and deposit the 20 percent contribution through the TGFDC.

The move provides clarity on how the additional revenue generated from ticket price hikes will be channelled towards the welfare fund. Producers will now have to coordinate with exhibitors to collect the amount and ensure that it is deposited into the designated account.

However, the decision has not gone down well with sections of the film industry. Telugu Film Producers Council secretary T Prasanna Kumar expressed his disappointment over the government order, saying it would affect the larger producer community.

“It has come as a big shock,” he said, noting that only a small percentage of producers seek ticket price hikes, while the decision affects the remaining majority.

Prasanna Kumar cited Akhanda as an example, noting that the 2021 film became a sensational hit and generated strong business for producers, distributors and exhibitors without any ticket price hike. In contrast, he said, Akhanda 2, which was released with increased ticket prices, did not achieve the same commercial impact.

He also pointed to recent releases such as Maa Inti Bangaram, DC and Lenin, which he said performed well with relatively normal ticket prices. According to him, this demonstrates that Telugu audiences are willing to visit theatres without steep ticket prices. In contrast, several films released with higher ticket rates have struggled at the box office.

Another distributor, who is also opposed to ticket hikes, said producers and distributors had not benefited significantly from the increased prices. According to him, the additional gains largely went to top stars and technicians, while producers and distributors did not enjoy comparable financial benefits.

However, leading producer and exhibitor Suniel Narang takes a more pragmatic view of the government’s decision. “We have to abide by government orders and pay a nominal amount from the collections, and since it is going towards the welfare of workers, it is reasonable,” he says. Narang pointed out that the contribution works out to around Rs 2 for every Rs 10 collected through the ticket hike, which he believes is a fair amount considering the benefits the industry receives from increased ticket prices.