I was a little confused by tellywood too. I think maybe hollywood and television? In the context of the entertainment developers and the old guard business model of selling wares to the public in movie houses or on silvery discs in stores, subscriptions that sort of thing. The tellywood business model is resistant to change that involves the data, internet, file sharing, copying.
It's understandable that 'tellywood' wants to stay profitable. But they'll just have to find clever ways of staying in the new digital age. I've never understood what's wrong with .99 cent songs from iTunes? It seems like a consumer/tellywood win/win to me?