Single Screens Feel the Squeeze as South Films Rush to OTT: Exhibitors Raise Alarm Over Shrinking Release Windows

Cinema owners across Andhra Pradesh and Telangana are sounding the alarm as Harshith Reddy’s Deewana and Vishnu Vishal’s Gatta Kusthi 2 prepare to debut on OTT platforms just weeks after their theatrical releases. Deewana, directed by Sreekanth Sangishetty and produced under Geetha Arts, originally released in cinemas on June 19, 2026, but will stream on Aha from July 31—barely six weeks later. Gatta Kusthi 2 follows suit, arriving on Netflix in multiple languages, including Telugu, on the same day.

This compressed release gap is the latest blow for single-screen and multiplex operators who depend on strong theatrical runs to stay afloat. The simultaneous OTT rollout of Deewana’s Tamil version, and similar strategies for Chinna Chinna Aasai (streaming on JioHotstar from July 28), underscore a shift that exhibitors say is eating into their already thin margins. "The OTT market has crashed big time, and closing the deal itself has now become a big task," an industry source explained, highlighting the complex environment exhibitors now face.

Behind the scenes, producers have increasingly started inking OTT deals even before their films complete their theatrical runs. The Telugu and Tamil mid-budget space is especially aggressive: Teja Sajja’s Zombie Reddy 2 secured non-theatrical rights worth ₹45-50 crore, enough to nearly cover its production costs before release. Varun Tej’s Korean Kanakaraju, produced by UV Creations, locked a ₹26 crore non-theatrical deal prior to its August 7 debut, offsetting most of the film’s ₹38 crore budget. These pre-emptive deals reduce the need for strong box office collections, leaving exhibitors with shorter windows to draw in audiences.

Multiplex owners point to films like Nagabandham, which hit OTT just 21 days after its theatrical opening, as examples of a worrying pattern. The quick digital launches, especially for mid-range projects, are becoming the rule rather than the exception, with late July’s slate—Deewana, Gatta Kusthi 2, Chinna Chinna Aasai—serving as a case in point.

The squeeze is felt not just in Telugu cinema. In Tamil, Mani Ratnam’s next production, starring Vijay Sethupathi and Sai Pallavi with music by AR Rahman, sold OTT rights to Netflix for ₹20 crore before shooting began. While this deal made headlines, the relatively modest sum—and the speed of the transaction—sparked debate about the current volatility of the digital rights market and its impact on exhibitors’ bottom lines.

Producers are experimenting with new safeguards, such as the performance-based clause in Mahesh Babu and Namrata Shirodkar’s Rao Bahadur contract with Netflix, which promises higher payouts if box office results exceed expectations. But for cinema owners, these innovations offer little comfort as digital premieres crowd out long theatrical runs and traditional revenue streams.