The Telugu film industry, second largest in the country next only to Bollywood, is today struggling to retain its position as escalating production costs, video privacy and dubbed movies from other languages eat into its profitability.

Just a few years ago, the Telugu film industry was a trendsetter of sorts in the country, be in terms of most lavish sets or stars earning in crores. In fact, it was Chiranjeevi who officially touched the Rs 1-crore-a-movie mark way back in 2000 (and went up to touch Rs 8 crore for Shankar Dada in 2007), even before Amitabh Bachchan did. Stars like Chiranjeevi, Balakrishna, Nagarjuna and Venkatesh kept the flag flying and the industry was one of the most profitable ones at that time. Films running for 50 days in more than 100 theatres, 100 days in more than 75 theatres, silver jubilee in at least 10 cinema halls… were all routine a decade ago.

But the script seems to have changed. Last year, the Telugu film industry spent Rs 350 crore in production but recovered only Rs 80 crore, according to estimates by various producers. Only 10% of the movies registered profits in the box office out of the 600-odd films produced in the last five years, says a source from Suresh Productions.

Of the 40-odd films produced last year, only five were hits. Only Simha, Em Maye Chesave, Betting Bangaraju, Bindaas and Maryadai Ramanna raked in the moolah. ?This is primarily due to the routine storylines which led to no repeat audience and collections of just Rs 4 crore in the first week after release,? says an observer from Padmalaya Studios. But the production costs were estimated to be more than Rs 15 crore per film.

The production costs have been escalating due to higher pay packages of at least seven new heroes and lavish song picturisations in overseas locations. Currently, three stars?Junior NTR, who is the grandson of legend NTR, erstwhile superstar Krishna?s son Mahesh Babu and Chiranjeevi?s son Ram Charan Teja ? are in the fray for the top slot. According to a sources, market rates of these three stars are Rs 8-10 crore. Next in the line are Pavan Kalyan (Chiranjeevi?s brother), Allu Arjun (his nephew), Nitin, Prabhas (Krishnamraju?s nephew), and Ravi Teja and Gopi Chand, who all charge close to Rs 5 crore. Anushka, Trisha, Shreya, Iliyana, Genelia and Nayanthara are a few heroines in the top line, who demand anything between Rs 1 to 2 crore per movie.

There is another twist in the tale. While big-hero movies are failing to yield better results, low-budget ones with strong storylines and new actors are faring well. For instance, small-budget movies like Vinayakadu, Kotha Bangaru Lokam, Happy Days, Mantra, Blade Babji and Arundadathi without any big stars have all fared well in the recent times.

Adding to the woes, dubbed films from other languages, primarily Tamil, are doing well. ?The industry is feeling the pinch as there are few original storylines and there is lot of dependence on dubbed films,” says Vijayendar Reddy, exhibitor and president of Telangana Film Chamber of Commerce.

Incidentally, Andhra boasts of the highest number of cinema halls, with over 4,000 screens. But as Reddy points out, 600 were closed down in the last one year alone with some being converted to malls.