It seems Malayalam film industry is in “a crisis”:http://sify.com/movies/malayalam/fullstory.php?id=13334644
bq. The shooting of Mammootty?s Vajram has stopped temporarily as it looks like the film will not make it to the theatres for Christmas. Mohanlal?s Vamanapuram Bus Service is on the verge of a breakdown are theatres are refusing to advance money to producer Anand after the colossal failure of Hariharan Pilla Happy Aanu.
bq. Dileep?s Pattanathil Sundaram is not able to get the kind of advance that his earlier films got. In Ernakulam producer ?Liberty? Basheer wanted Rs 10 lakhs as advance but theatres are offering only Rs 4 lakh!
bq. Three films of Suresh Gopi are lying in the cans with no takers for months and no distributor or exhibitor wants to touch it with a barge pole
Malayalam movies are low cost productions, with simple stories involving family and human relations. Now with the proliferation of Cable TV, all such stories are available to people as Mega Serials. So there is no incentive for people to go to a movie theatre, pay lot more money and watch sometimes pathetic movies. Many of the film stars are now migrating to the small screen and super stars have turned to Serial producers.
What is the way out ? One way would be to mount lavish productions like Tamil movies. This is something which the TV industry cannot match.