The US has been the most crucial Overseas market for Telugu cinema for a number of years. Among the non-Telugu States in India, Karnataka has to be the most precious one. If some trade reports are to be believed, these two are starting to become problem areas for Tollywood for now.

"Sye Raa and Saaho were sold for heavy rates in these two territories. But they didn't do well. Because of this, the premium placed on big-ticket Telugu films may already be coming down. This may not go anytime soon. The fallout of this will be felt on Mahesh Babu's 'Sarileru Neekevvaru' and Allu Arjun's 'Ala Vaithunthapurramloo'," an industry observer says.

It's very much true that two back-to-back loss ventures can create panic in the market. "The Overseas distributors were bullish after the 'Baahubali' experience. However, steaming sites are slowly and surely hurting business. This problem obviously goes beyond the recent films of Prabhas and Chiranjeevi," the source adds.

Regardless of the reasons for the current sorry state, the Sankranthi releases, including 'Venky Mama' and 'Entha Manchivaadavura', are expected to pay the price.