Every one loves Malayalam cinema. Just ask them. Critics gush. Film festivals swoon. North Indian cinephiles drop references to Aattam and Manjummel Boys at dinner parties to establish their impeccable taste. But in the immortal words of Jerry Maguire: “Show me the money!” If love paid bills, Malayalam producers wouldn’t be threatening a complete industry shutdown from June 1.

It’s a curious paradox: 2024 was a banner year for Malayalam cinema when the survival drama Manjummel Boys, with a Rs 20 crore budget and gross earnings of Rs 240+ crore, became the highest grossing Malayalam film ever, while Gen-Z romance Premalu, with a Rs 3 crore budget and Rs 136 crore in revenue, emerged as possibly India’s most profitable film of the year. There are plenty of others that left a lasting imprint on the cultural landscape.

Aavesham, an action film starring Fahadh Faasil, became a phenomenon, dominating social media with viral reels and memes. Aattam, a movie that deals with sexual harassment and brought to life by a cast of nine actors from theatre, clinched the National Award for Best Feature Film as Malayalam cinema swept eight awards at the 70th National Film Awards. The critic’s darling of Indian cinema was finally getting its due.

Meanwhile, in Kerala, producers stared at their balance sheets with such desperation that you would think they were mentally cataloguing their organs by market value.

The brutal economics of filmmaking has always involved risk—most businesses understand that failure is more common than success. But in Malayalam cinema, we are witnessing a particularly perverse form of capitalism: actors pocket 60% of production budgets and walk away unscathed when films tank, only to demand higher fees for their next project, according to G Suresh Kumar, vice-president of the Kerala Film Producers Association (KFPA). The producer alone bears the crushing weight of failure, he says.

Industry insiders point to the case of the Tovino Thomas-starrer Identity —produced at Rs 30 crore, it collected a mere Rs 6 crore in January, approximately equal to the actor’s paycheck. While Thomas reportedly offered another date to help the producer recoup losses, the fundamental question remains: if actors inflated their rates during the OTT boom, shouldn’t they settle for less money, now that the bubble has burst?

The cautionary tales are piling up faster than unpaid invoices. Take Sureshanteyum Sumalathayudeyum Hrudayahariyaya Pranayakadha, starring newcomer Rajesh Madhavan. It began with a budget of Rs 4 crore but ballooned to Rs 20 crore— a 500% increase, equivalent to the cost of a typical Mammootty film —with allegedly no cost-control efforts from director Ratheesh Balakrishnan, according to co-producer Ajith Thalappilly.

Thalappilly says he had to sell his Mercedes-Benz and teetered on the edge of bankruptcy, saved only by a last-minute intervention from a distributor. The director still collected his hefty paycheck, speculated to be Rs 1 crore, and demanded 30% profits from a film that spectacularly flopped, according to an industry insider who requested anonymity.

This isn’t the industry’s first financial crisis. Malayalam cinema has weathered storms before, but the scale has changed dramatically. Where losses once registered in lakhs of rupees, they now balloon into double-digit crores, creating recovery periods measured in decades rather than years.

What makes today’s predicament particularly treacherous is the aftermath of a false prosperity. The Covid-era OTT windfall had created a dangerous illusion. Streaming platforms were snapping up every Malayalam film, regardless of quality, paying premium prices that inflated everyone’s expectations. Actors doubled their fees overnight. Directors expanded budgets. Producers borrowed heavily, convinced that streaming rights would cover their investments.

Then reality hit with all the subtlety of a sledgehammer. OTT platforms “recalibrated” their approach, realizing that Malayalam cinema’s audience reach didn’t justify their splurge, says an industry insider requesting anonymity. The new playbook: wait to see which films succeed in theatres, then cherry-pick the winners. For most producers, this means no OTT deal at all.

“Actors were thinking, if Allu Arjun can rake in Rs 400 crore, why can’t we manage Rs 1.5 crore? But when the bubble burst, they were not reducing their fee,” says the person quoted above.

Even the lucky few who secure streaming contracts face brutal negotiations, delays designed to pressure desperate producers into accepting lower fees, and payment schedules stretched over months. By the time the money arrives, interest on production loans would have already eaten away any potential profit.

Most Malayalam producers borrow from just four or five private financiers at interest rates that would make loan sharks blush—20-25%. Many end up bankrupt, their artistic dreams sacrificed at the altar of compound interest.

In one way, Suresh Kumar and his peers are reaping what they have sown. Like today’s OTT bubble, satellite television created a similar windfall at the start of the millennium, delivering huge profits for makers, actors and producers. Kumar particularly scored big during this period as one of Mohanlal’s main producers, until the actor began producing films himself.

These fault lines erupted recently when Suresh Kumar publicly revealed the budget of Empuraan, starring superstar Mohanlal and directed by Prithviraj—a staggering Rs 140 crore, making it the most expensive Malayalam film ever. Kumar suggested that Tamil Nadu-based Lyca Productions, which recently suffered massive losses from Rajinikanth and Kamal Haasan starrers, was being “duped” into the Kerala market with promises of returns that don’t exist.

This ignited a firestorm. Antony Perumbavoor, Mohanlal’s long-time producer and confidant, issued a detailed rebuttal that was later shared by both Prithviraj and Mohanlal. Despite Kumar and Mohanlal being schoolmates and former collaborators, the controversy revealed a deeper schism—not between old friends, but between competing visions for Malayalam cinema’s future.

“The fight is not among them, but between an old guard and a new guard,” says an industry insider. Filmmakers like Prithviraj are charting a new territory, creating big-budget spectacles with global ambitions. “Empuraan’s cinematography is conceived with a worldwide audience in mind. The director wasn’t afraid to hire helicopters for action sequences, while the average Malayalam producer thinks twice before renting a Range Rover,” says someone from the production team.

Interestingly, amid this financial carnage, some of the industry’s biggest hits recently were produced not by traditional studios but by actors and directors themselves. Manjummel Boys came from actor Soubin Shahir and his circle under Parava Films. Premalu (along with critics’ darlings like Kumbalangi Nights and Joji) emerged from the creative triumvirate of actor-director Dileesh Pothan, writer Syam Pushkaran and Faasil.

This shift reveals two simultaneous truths: established producers are becoming increasingly risk-averse toward experimental content, and creative talents are seeking autonomy over their artistic visions.

Superstar Mammootty’s production company exemplifies this evolution. Through Mammootty Kampany, the veteran actor has systematically shattered his macho image, portraying characters who cry, experience loss, engage in explicit sexuality, commit honour killings and even come out as gay. In films like Rorschach, Nanpakal Nerathu Mayakkam and Kaathal, Mammootty seems to be redefining what Malayalam cinema can explore.

Would traditional producers have green-lit these boundary-pushing projects? The evidence suggests otherwise. Other artist-led production companies also claim they are filling a creative void left by risk-averse legacy producers, even as they navigate the same treacherous financial landscape.

They believe this is an evolutionary phase of Malayalam cinema as it attempts to transform itself, reaching for audiences beyond Kerala’s borders. This ambition demands bigger stars, higher production values and technical crews of international calibre—all of which cost substantial sums that the traditional financing model cannot sustain. The legacy producers, the new guard believes, are not in sync with this new grammar of cinema trade and most have lost touch with ground reality both in terms of content and structure.

Beyond these creative tensions, the industry’s structural problems extend beyond Kerala’s borders. None of the mainstream OTT platforms have appointed decision-makers who can green-light Malayalam projects independently. Approval must come from Mumbai—a process that reveals either a fundamental lack of trust in local talent or a cynical assessment of the market’s importance. Either way, it creates additional hurdles for an already struggling industry.

What makes this situation particularly ironic is that all of this is happening in an industry that remains one of the most disorganized (most sets don’t even have a washroom for women), exploitative and poorly paying to writers, technicians and crew in India.

The fundamental problem, everybody agrees, is mathematical— Kerala’s cinematic brilliance is trapped in a population constraint. With just 3.5 crore people in the state and industry estimates suggesting only 50 lakh regular moviegoers, the numbers don’t add up. The theoretical best-case calculation is if every regular movie goer watches a film (indicating pan-state acclaim), at Rs 200 per ticket, the film might gross Rs 100 crore.

From that theoretical maximum, subtract 30% for taxes and 30-40% for distributors, and producers are left with Rs 20-25 crore before deducting marketing expenses. Now consider that most Rs 100 crore grossers require star power—actors now commanding fees in crores—along with top-tier directors, technicians and even screenwriters (at least one recently charged over Rs 1 crore for a script). Add production schedules stretching 60-90 days, and your budget easily exceeds Rs 20 crore.

Where exactly is the sustainable financial model here? Even in the best-case scenario, producers are barely breaking even. Most films achieve only a fraction of that theoretical maximum, guaranteeing financial disaster. In January 2025, out of 28 films released, only Asif Ali’s Rekhachithram turned a profit, with the industry losing Rs 110 crore in a month, as per KFPA. For 2024, the industry released 200 films with only 24 achieving financial success, resulting in losses of Rs 600-700 crore.

This means for Malayalam cinema to endure this transition, it needs more than just critical adulation and festival laurels. It needs a structural reset. The unchecked rise of actor fees must be reevaluated, ensuring that the burden of failure isn’t shouldered by producers alone. Financial institutions need to step in with saner lending rates before private financiers choke the industry’s future.

OTT platforms, if they truly value Malayalam cinema’s storytelling prowess, must establish regional decision-making bodies rather than treat the industry as an afterthought in Mumbai’s corporate boardrooms. Most importantly, producers must recognize that the age-old financing models— where success relies solely on Kerala’s limited theatrical audience—are no longer viable.

At the heart of it, the industry must decide what it truly wants to be. Right now, it’s like a half-baked screenplay— beautifully shot, critically acclaimed but structurally unsound. And as any filmmaker knows, no amount of festival buzz can save a story with a broken third act. Does it aspire to remain a niche darling of cinephiles and award circuits, or does it have the vision—and the discipline—to build an ecosystem that thrives both artistically and commercially?

Because right now, nobody loves Malayalam cinema—if you ask the people who produce it.

The writer is a Kerala-based journalist

One of the most prominent actors of Malayalam cinema today and known for picking clutter-breaking roles, Tovino Thomas has carved a space for himself. Basil Joseph’s breakout superhero film Minnal Murali (2021), starring Tovino, won him praise and recognition beyond South cinema. He was also widely appreciated for his performances in Ennu Ninte Moideen, 2018 and Anweshippin Kandethum, to name a few.

The actor, who was briefly in Mumbai for the promotion of his upcoming film Ajayante Randam Moshanam (ARM), spoke his heart out on a number of topics, including Bollywood, social media frenzy, women’s safety, especially in the wake of Hema Committee report and more. Excerpts...

I’m surrounded by some good people, and I have good friends. Your thinking doesn’t evolve on its own, it comes from the outside. It comes from the company you keep. It comes from your family, your friends and the people you work with. I don’t give myself credit for that. As a small part of society, you should be socially aware. You cannot be blind to issues which need to be addressed.

There are solid actors in Bollywood who are already doing a good job. Shah Rukh Khan sir, Ranbir Kapoor, Ranveer Singh, Rajkummar Rao, Nawazuddin Siddiqui and Vicky Kaushal, I love watching their work. I don’t see a point of me doing a Bollywood movie until and unless it’s a Malayali character so that I can speak Hindi with a Malayalam accent. Also, Malayalam cinema’s working style is a bit different. We start a movie, and we try to finish it in one stretch. Other industries might split it into different schedules. I’m not talking about every Hindi movie. There are filmmakers here who finish movies in a few days, too. I spoke to Anurag Kashyap sir, and I know how he does it. But if I’m committing to a movie from another industry, I must put in extra effort because it’s a language that I don’t have command over. That requires more time which might affect the movies which I’m doing back in Kerala. So, I’m trying to make movies which appeal to everyone. I’m sitting with you and talking about ARM which we shot in Malayalam. We have dubbed it in Hindi also. We are expecting Hindi speaking audiences to watch the movie in their own language without concentrating on the subtitles. I don’t think it’s necessary for me to come and act here (in Bollywood). But I can bring my movies here. That’s almost the same. We have brilliant actors in every industry in India. I don’t find it fascinating…. a Malayali actor coming to Bollywood, doing a movie here. If the character is a Malayali, I understand. I’ll come and do it for sure. I watch Malayalam, Tamil, Telugu, Kannada, Hindi, English, Spanish and Japanese cinema. For me, the content has to strike a chord.

I have never felt that paparazzi culture here because I am not very well known in Mumbai. In fact, it’s one of the places where I can go out, be myself and walk around. We live in a digital age where everything is being documented. You are being watched all the time and I don’t know if it’s a good thing. You need to have your privacy and a little space. If you are an actor, you understand that you are a public figure and this is part of your life, but when you go out with your family, they deserve to live a happy, peaceful life. They don’t have to go through that. It will be great if they are left alone. I use social media for promoting my movies. I get this dopamine high, but I don’t depend on it much. I don’t think social media validation is actual validation. We are living in a time where reach (social media) matters more than talent. That’s sad, but true.

This needs a deeper conversation. I haven’t read the Hema committee report, but I saw the highlights on news channels. As far as sexual harassment is concerned, if somebody has done something that's terribly wrong against anyone, forget the gender, they should get the deserved punishment. They should be punished under the law. I don’t want to be misinterpreted here but they are saying the industry is male-dominated and they're complaining about it to the male-dominated society. What do you expect? It's not just the industry. Society has to change. Our patriarchal mindset has to change.

However, as far as inequality is concerned, there were actresses who got paid more than I did when I started off. Cinema is a business, and your value depends on the value that you add to the movie. This comes from your power to pull the audience to the theatre. But there needs to be a zero tolerance policy as far as lack of safety is concerned. It's a basic thing. I don't even have to say that. I understand whatever happened in Kolkata and all. We are heartbroken, we are angry. Even reading the news has been disturbing. Rapists are psychopaths. They are mentally ill. They don't deserve to live a life among people. They should be given maximum punishments. I don't even want to put up a post. I mean, if I put up a post, I'll get clapped. Nothing is going to change. I don't know what needs to be done. Do the laws need to change? I think there should be proper education in schools. Have we forgotten how to respect another human being? You learn and become a doctor or an engineer but it's more important to become a better human being when you are living in a society.

For Malayalam actor Tovino Thomas, who is set to clock 10 years in the industry on January 28, there is probably no better time to ring in that occasion. His latest film Minnal Murali is the most-watched Indian movie in the past three weeks on a streaming platform giant.

The 32-year-old says, “I have always maintained that I don’t want to be a star and that I am not interested if my films cross Rs. 50 crore or Rs. 100 crore-mark. But I want Malayalam cinema to be viewed by international audiences.” In that regard, the success of Minnal Murali is a step in that direction, he feels.

For him, it is the advancement of the industry that is more important. “I don’t see a point in me being bigger than the Malayalam industry. If that happens, where will I find work? But if the industry expands, all of us can grow together,” he explains.

Ask him if he is satisfied with the growth in his nearly decade-long career, which includes films such as Kala (2021), Maayanadhi (2020) and Godha (2017), he replies, “Ever since I entered cinema, I have believed that I’m successful, as my dream was to act and I achieved that. I’m living my dream now and so, whether I have growth or not, I’m content.”

Talking about the expectations that come with the success of the film, Thomas shares, “With more reach comes more responsibility. I know that it’s not the same number of people who have seen my previous films who will be watching my next projects as Minnal Murali has introduced me to a wider audience.”

While he was hailed for stellar stunts in the superhero film, he informs that it took a toll on his body. “When you are fighting in that suit, you perspire a lot. On certain days, no matter how much water I drank, my uric acid levels kept going up and I suffered gout attacks,” he says.