The Association has formed a committee led by director-producer Vinayan to study the feasibility of the project, industry officials said.
The Association president G Suresh Kumar said, the aim of the project is to end the hegemony of regional entertainment channels.
"Channels are refusing to accept many of the films citing trivial reasons. Many of them are accepting only big banner movies with superstar cast. This largely affects those who take a medium-budget movie with ordinary actors," Kumar told PTI.
The Association has also plans to join hands with its counterparts in south India to screen other language movies in its channel, Suresh said.
Many industry players have already evinced keen interest in investing in the channel, he added.