Telangana, the newly formed state carved out of Andhra Pradesh, will set up a separate film committee called Telangana Cinema Force to be headed by filmmaker N. Shankar.
Filmmaker Murali Mohan, president of Movie Artists Association in Andhra, feels the division of the state will result in huge losses to the industry.
"We have heard that there are plans to stop the release of films made by Andhra people in Telangana. If that happens, it will result in loss of crores. Telangana has about 10 districts and by not allowing release of a film in those places, you're affecting the business of the film," he said.
Mohan added: "I wish to see the industry united, but for that we need strict laws for both the states. A film eventually caters to the audience and how does it matter to which region the audience belongs to?"
The Telugu film industry is known for big stars like Nagarjuna and Pawan Kalyan. In the field of direction the likes of Puri Jagannadh and V.V. Vinayak shine on the firmament, while D. Suresh Babu among others are established names in the production field.
Known to be prolific, the industry churned out 94 Telugu films in 2010, 115 in 2011, 141 in 2012, and 131 films in 2013.
Trade analyst Trinath says Nizam territory, comprising of Telangana districts, is goldmine for film business.
"Any recent blockbuster like 'Gabbar Singh' and 'Magadheera' raked in over 60 to 70 percent of its collections from Nizam, hence making it the most important territory for stars. Even distributors in these areas shell out maximum fees for a film because the returns are guaranteed."
The Nizam territory comprises of twin cities Hyderabad and Secunderabad and other districts like Khammam, Mahabubnagar, Karimnagar and few more.
"If films made by Andhra filmmakers won't release in Telangana, you could imagine the losses producers have to bear. Moreover, Telangana has about 480 theatres, and of these nearly 200 are in Hyderabad. If films are not released in them, it's unlikely that films could even break even," he said.
"Big-budget films will be affected the most if they are not allowed to release in Telangana. Smaller films need not worry," said Trinath.
Apart from box office collection, the division will affect the filmmaking sensibilities too.
"Now that Telangana is a reality, we have to make films from different sensibilities," said a leading Andhra producer, on condition of anonymity.
"Telangana audience would like to see more of pro-Telangana films. In most likelihood, films made by Andhra people, if released in Telangana, will only manage to get fewer theatres," the producer told IANS.
"Even if films are allowed to be released in Telangana, there will be clauses like 'the film should have been shot there' or a particular film 'should have been made with equal percentage of Telangana workforce' and so on," he added.
Shankar wants both the industries to be united, but he also wants equal job opportunities for artists and technicians from Telangana.
"The industry is dominated by members from Andhra. We want the industry to be united, but we seek equality in employment. Our people also deserve to be part of the industry across all departments. So many of our films (from Telangana) haven't released so far because we rarely get theatres in Andhra," Shankar told IANS.
His aim is to bring films from Telangana into prominence.
"All these years films from Telangana were sidelined. Our films seldom have a big release as the rest of the state is allocated to big-budget films. It's time to change that. Our films deserve a wider release too and we will see to it," Shankar told IANS.
M. Vijayendar Prasad, president of Telangana Film Chamber of Commerce (TFCC), too feels talent from Telangana should be promoted.
"All major stars - be it Nagarjuna, Mahesh Babu or Pawan Kalyan - belong to Andhra. There is hardly anybody from Telangana except actors like Nithiin Reddy and filmmakers like Harish Shankar and producer Dil Raju. We have so much talent and they need to be brought forth," Prasad told IANS.
"Leading producers and studios also belong to Andhra. For the benefit of the industry, the Andhra Pradesh Film Chamber of Commerce should henceforth be called Telugu Film Chamber of Commerce," he added.