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In terms of budget, production values and technical proficiency, tamil and telugu movies are on par with Bollywood. You cant really compare these 'regional' industries with say Oriya or Punjabi film industries. In terms of stories, I have heard good things about Malayalam and Bengali industries and they tend to make better quality(meaningful) movies than anybody else. Bollywood has a bigger audience and film makers have more budget to make movies. But tamil and telugu industries are not far behind despite being regional industries, which goes to show how movie crazy people in these two states are. Bollywood stands to gain more if they could tap into the market in the South but there is a huge culture gap which is also why tamil/telugu movies dubbed in Hindi dont do well in North.

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