Tamil Film Industry Resets Its Economics: Revenue-Sharing Model, OTT Windowing, Screen Allocation & IP Enforcement

Posted On - 10 November, 2025 • By - King Stubb & Kasiva

Authors – Rahul and Arpit

Introduction

The Tamil Film Producers Council (TFPC), in a landmark general body meeting in Chennai, has passed sweeping resolutions that collectively redefine how films will be financed, released, monetised and protected in Tamil Nadu.

For the first time, the industry is shifting from producer risk and star reward to shared responsibility and shared revenue.

1. Big-budget films will now follow a revenue-sharing model

Leading actors, directors, and senior technicians will no longer receive full upfront payment. Instead, they must:

  • Share profits when the film succeeds
  • Share losses when the film underperforms
  • This model is designed to control runaway production budgets and align incentives across the creative and commercial stakeholders.

“Stars will now earn only if the film earns.”

2. Mandatory theatrical exclusivity windows before OTT release

To protect box-office revenue and revive the theatre ecosystem:

  • Star-driven, big-budget films → OTT only after 8 weeks
  • Mid-tier films → OTT only after 6 weeks
  • Small-budget films → OTT after 4 weeks
  • Films can no longer jump early to OTT to recover cost – the audience must return to theatres first.

3. New Film Release Regulation Committee

To prevent star-led films from blocking screens and squeezing out smaller films, TFPC will form a committee with Producers, Theatre Owners and Distributors. Its mandate:

  • Ensure fair screen access
  • Guarantee that up to 250 small and medium-budget films released annually obtain proper theatrical space

This makes theatrical access a structured right, not a negotiation battle.

4. TFPC prioritises cinema over digital content

  • Actors, directors and technicians are advised to prioritise films over web series and OTT-exclusive shows.
  • Reason: excessive focus on OTT/web-series is reducing public interest in theatrical releases and weakening the ecosystem.
  • Unions have been instructed to withhold work support from those who violate the resolution.

5.Tough stance against online reviewers / YouTube channels

Action will be taken against channels that:

  • Publish unauthorised content
  • Leak reviews before release
  • Cross into defamation under the pretext of criticism
  • Theatres have been asked not to screen films of violators, and unions have been instructed not to cooperate with them.
  • This marks the beginning of aggressive digital IP enforcement.

6. Event organisers now need prior approvals

Any private company planning to hold film award shows, music launch events, promotional or commercial film-related functions, must obtain prior written permission from BOTH, TFPC, and South Indian Artistes’ Association. Events held without approval may face legal and industry-level action.

Producers will now take structured legal steps to recover:

  • Unpaid royalties
  • Revenue from digital and international exploitation
  • Satellite and music monetisation dues
  • This signals a shift toward treating films as ongoing IP assets, not one-time products.

8. Tamil Nadu Government support recognised

TFPC publicly thanked the Tamil Nadu Government for:

  • Issuing a single-window system to streamline shooting permissions at government-owned locations
  • Reducing local service tax to 4%
  • Allocating 100 acres in Payyanur for residential housing for film industry workers
  • These incentives reduce production friction and improve cost efficiencies.

KSK’s Take: Why this is a turning point

These resolutions are not cosmetic; they redesign the power equation of Tamil cinema.

  • Producers get financial protection
  • Artists and technicians share responsibility and rewards
  • OTT releases are strategically delayed
  • Small films gain access to theatres
  • Piracy and online defamation will be fought aggressively
  • The industry becomes investible, structured and IP-driven

This is Tamil cinema’s migration from emotion-driven filmmaking to business-driven filmmaking.

Changes are anticipated across:

  • Artist agreements (backend revenue sharing, performance-linked payouts)
  • OTT licensing contracts (windowing clauses + penalties for violations)
  • IP rights enforcement playbooks (takedowns, defamation, anti-piracy)
  • Arbitration-ready royalty and exploitation clauses

Filmmaking contracts will now need:

  • Audit rights
  • Defined revenue waterfall
  • Reporting schedules
  • Dispute resolution frameworks