The Malayalam film industry is on the brink of a crisis, with major bodies announcing a complete shutdown of production, distribution, and exhibition from June 1, 2025, unless urgent reforms are made. The decision comes after months of mounting financial struggles, exacerbated by soaring actor fees and high taxes. This drastic move was revealed by prominent film producer G. Suresh Kumar following a joint meeting of various associations, including the Kerala Film Producers Association (KFPA), the Film Employees Federation of Kerala (FEFKA), and others.
In 2024, the industry witnessed a few success stories with films like Aavesham, ARM, Premalu, and Manjummel Boys, but the larger picture remains grim. Despite the industry’s efforts, only a handful of films are achieving profitability. Of the 200 films released last year, just 24 were financially successful. The rest resulted in staggering losses, with producers suffering between Rs 600 to 700 crore in deficits.
According to a Times of India report on Saturday, one of the central issues highlighted by industry representatives is the unsustainable production cost, particularly the escalating salaries of actors and technicians. Suresh Kumar, who also serves as the president of the Film Chamber of Kerala, expressed frustration at the disproportionate share of a film's budget being consumed by star fees. According to Kumar, a staggering 60% of a film’s cost goes towards actors' remuneration. Furthermore, even emerging actors and directors are demanding hefty payments that, he argues, are far beyond the means of Malayalam cinema.
Producers are also grappling with the dual burden of excessive taxation. The introduction of the ‘One Nation, One Tax’ scheme has seen the entertainment tax combined with Goods and Services Tax (GST), resulting in a crippling 30% tax rate on film earnings.
For every Rs 100 crore a film grosses, Rs 30 crore is siphoned off to the government, leaving producers with just Rs 27 crore, a situation many say is untenable for the future of Malayalam cinema.
The situation has been compounded by the fact that talks with actors in the past have failed to yield any significant change. While actors have agreed to lower their fees in discussions, they have often reverted to their original demands once the meetings concluded. The industry's dependence on OTT platforms as an alternative distribution method has also been problematic, as these platforms are primarily interested in films that perform well, buying rights at prices they set, leaving producers at their mercy.
The shutdown, set to commence on June 1, will suspend all film-related activities, including shoots and screenings. Prior to this, a symbolic protest will be held in front of the Secretariat in Thiruvananthapuram, highlighting the industry's plight.
In an effort to resolve the crisis, representatives from the film bodies are planning to meet with Kerala Chief Minister Pinarayi Vijayan to present their concerns and seek solutions. If no action is taken, the looming shutdown could mark a turning point in the future of Malayalam cinema, a vibrant industry that has long been a staple of Indian film culture.