The demonetisation of 500 and 1,000 rupee notes by the government that has triggered long queues at banks and ATMs across the country, has led to the queues outside theatres reducing.
The situation has been no different in the Telugu states of Telangana and Andhra. With fans lining up outside banks rather than film counters, Tollywood has taken a major hit.
Reports say that big budget films including the Ram Charan Teja starrer "Dhruva" and "Intlo Deyam-Nakem Bhayam" starring Allari Naresh, have now been postponed till December, while the release of many other movies is uncertain.
Occupancy in at least 300 of the 1,680 theatres across cities and towns in the two states has reportedly come down to 20% since the time the announcement was made.
Several film studios in Hyderabad are also said to have halted or slowed down their production process as junior artists and many other people working on the sets, have to be paid in cash.
There have been multiple reports of at least half-a-dozen films in Hyderabad that have come to a halt after producers could not pay technicians.
Speaking to The Indian Express, B S Krishna, a leading agent who hires junior artistes, said, â€śTollywood is a very cash intensive industry. A majority of the payments are made in cash and hundreds of people work in a film. For the first two or three days after demonetisation, these workers agreed to take the money at a later date but now even they are facing a crunch. They have been demanding their dues and some have stopped reporting to work.â€ť
Director Gautham Menon who took a gamble and released his film "Sahasam Swasaga Sagipo", told TNIE, "Around 30 per cent of our collections have been hit by the demonetisation...with no major release for the next three weeks, we hope to recover the money lost."
The recent Income Tax raids on the homes and offices of "Baahubali" producers Shobu Yarlagadda and Prasad Devineni in Hyderabad have also sent jitters in the industry.
However, while producers seem to be affected the worst, the Deccan Chronicle reported that actors would not be affected much, as only a minor portion of an actor's payment was allegedly made in cash.
â€śBig actors accept land as a major portion of their pay...Several actors are known to own vast lands not just in the city but in the surrounding areas as well...Houses, apartments and other properties are also common modes of payment,â€ť a source told DC.
For now, industry bigwigs hope that things will soon settle down, as they brace themselves for two major releases - Chiranjeeviâ€™s comeback film "Khaidi No 150", and actor Balakrishna's 100th film "Gautamiputra Satakarni", which will hit theatres in another two months.