Mollywood Crisis Deepens: Malayalam Film Industry Faces Shutdown Amid Financial Struggles

Rising production costs, high entertainment taxes, and star remuneration disputes have pushed the Malayalam film industry to the brink, with producers threatening a shutdown from June 1.

February 21, 2025: The Malayalam film industry is facing an unprecedented crisis, with leading producers warning of a complete shutdown starting June 1, 2025. The crisis stems from mounting financial losses, soaring production costs, and disputes over high actor salaries. Industry veteran G Suresh Kumar announced the decision following a meeting with key stakeholders, including the Film Employees Federation of Kerala (FEFKA).

Why is the Shutdown Being Considered?

According to Suresh Kumar, out of 200 Malayalam films released last year, only 24 were commercially successful, with producers collectively suffering losses of ₹600-700 crore. He attributes the crisis to:

Also Read: Mollywood Faces ₹650 Crore Loss in 2024: Producers Warn of Exposing Real Box Office Numbers and Actor Salaries

• Escalating actor and technician salaries
• Burden of entertainment taxes and GST, which take up nearly 30% of earnings
• Failure of OTT platforms to support struggling films
• Weak box office performance outside a handful of blockbusters

Despite discussions with actors, Kumar alleges that they have failed to honour their commitments to reduce fees, making it harder for producers to recover costs.

Also Read: Audiences Rebel Against Below Par Cinema: Box Office Struggles as One Film After Another Flops-Special Report

Industry Divided: A Strategic Move or Genuine Financial Crisis?

Not all industry figures support the shutdown. Producer Antony Perumbavoor took to social media to criticize the decision, prompting support from Mohanlal and Prithviraj Sukumaran. Some speculate that the ongoing debate could be a promotional strategy for L2: Empuraan, set for release on March 27, 2025.

However, trade analysts argue that the shutdown is a pressure tactic to push actors into reducing their fees. Ramesh Bala, a noted industry expert, stated that such threats are often made to curb production costs rather than actually shut down the industry.

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What Happens If The Shutdown Goes Ahead?

If Malayalam film production halts from June 1, the impact will extend beyond actors and producers:

• Thousands of workers, including technicians, makeup artists, and set designers, will lose livelihoods.
• Theatre business will take a hit, leading to a domino effect on exhibitors and distributors.
• OTT platforms may not step in, as many prefer acquiring films post-theatrical release.

While a similar strike in Tamil cinema once helped clear a backlog of pending films, experts believe shutting down Mollywood is not the best solution.

Seeking Government Intervention

The Producers’ Council is now seeking government support to address the crisis. Lata Srinivasan, a film critic, points out that high entertainment taxes are one of the biggest financial burdens on the industry. She suggests that negotiations with the Kerala government could help resolve the issue.

Meanwhile, director PS Arjun believes that the shutdown is more of an ideological move rather than a practical solution. He argues that theatrical releases remain crucial for securing OTT deals, and shifting directly to digital platforms is not yet viable for the Malayalam industry.

Will The Shutdown Happen?

With key stars and producers divided over the move, it remains to be seen whether the June 1 shutdown will go ahead or whether a last-minute resolution will be reached. If actors agree to a pay cut, the shutdown might be averted. However, if no agreement is reached, Mollywood could see its biggest crisis in years.

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