In 2014, the Lyca Group's entry into film production and distribution represented a significant turning point for Tamil cinema. A major corporate entity with substantial financial resources was stepping into a relatively small industry, promising to bring about transformative changes. Indeed, they delivered on that promise. Over the subsequent decade, Lyca consistently produced some of the most ambitious and costly Tamil films, including one of Rajinikanth's most successful projects. Their trajectory appeared to be one of continuous ascent until it faced a downturn with the rise of the OTT platform boom, a phenomenon that Lyca had a hand in fostering.

How Lyca became Tamil cinema's biggest production house

The ascent of Lyca as Tamil cinema's leading production house commenced with AR Murugadoss' film Kaththi, featuring Vijay, in 2014. This film was a tremendous success, enabling Lyca to broaden its horizons. In the following years, they produced several critically acclaimed sleeper hits, such as Vada Chennai and Ippadai Vellum. However, it was in 2018 that they achieved remarkable success with Shankar's 2.0. This sequel to Enthiran became the highest-grossing film in Rajinikanth's career and remains the all-time highest-grossing Tamil film, amassing over ₹700 crore globally. This success paved the way for a series of major films from Lyca, including Darbar and Ponniyin Selvan I and II, among others. The production house also made its foray into Bollywood by producing Akshay Kumar's Ram Setu.

Kaththi, featuring Vijay and Samantha Ruth Prabhu, marked Lyca's inaugural film. Over the course of a decade, Lyca produced 34 films and distributed numerous others. Their portfolio includes the highest-grossing Tamil film to date, the largest Tamil franchise, and the three most expensive Tamil films ever produced. This prolific output, coupled with their ambitious scale, allowed Lyca to outpace established industry veterans such as Sun Pictures and Raaj Kamal International.

Lyca Production's downfall

In 2023, signs of trouble emerged for Lyca Productions as several of its films underperformed at the box office. Over a span of one year, beginning in late 2023, the company released five consecutive major flops: Chandramukhi 2, Lal Salaam, Indian 2, Vettaiyan, and Vidaamuyarchi. These films featured prominent stars such as Rajinikanth, Kamal Haasan, and Ajith Kumar, and were directed by renowned filmmakers like Shankar. The total production cost for these films approached ₹1100 crore, yet they only garnered approximately ₹500 crore in box office revenue. Excluding digital rights, this resulted in a staggering loss of over ₹600 crore for Lyca.

How streaming affected Lyca

According to industry experts, the decline in revenue from streaming rights significantly affected Lyca Productions. The company had secured a distribution deal for Mohanlal's L2: Empuraan, anticipating substantial income from streaming rights. However, this expectation did not come to fruition. Ultimately, Lyca withdrew from its partnership in Empuraan just two weeks prior to the film's release. Reports suggest that the financial difficulties facing Lyca Productions are so critical that the company is poised to cease operations after completing its final two films this year.

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