Here's a brief diagnosis of what's wrong with the theater industry. I was going to suggest that they do more dinner theaters and IMAX screens, and I still think that's the answer. Make a movie ticket significantly more expensive and increase your service level. That will make movie goers feel special and they'll respect the entire experience more. One thing is for certain, something has to change if this industry doesn't want to join the drive-in...
After much ado, I recently purchased my first HDTV. I've had a surround sound system for quite a while. I also have a Netflix membership and a very comfortable couch. This leads me to the question:
Why should I ever go to the theater again?
I'll further qualify this by stating that I am nearly 30, so I'm mature enough to not bite on advertising hype. I've learned the people and conversations that I need to ignore so that the plot is not spoiled for me. There are other factors to help solidify the decision that I really don't want to go to the theater anymore, but I won't bore you with them.
Back to the question, I think that people need a compelling reason to go to theaters. I'm going to try to find ways that the industry could answer this question, but in reality the industry should be attempting to answer it themselves. Without an answer, I believe that somewhere around three of every four theater goers who purchases an HDTV will abandon the theaters and never look back.
The Simple Answer
The simple answer, and the one that theater owners have stuck to, is that they must keep DVD release dates pushed back as far as possible. They must cling to the old system where movies come out in theaters and then are released on consumer media some arbitrary time span later. This gives the theaters a temporary monopoly that adds value to their ticket sales.
This is the same flawed logic that is hurting the entertainment system everywhere. They are simply so afraid of change that they will spend every dime they can to make things stay the same, instead of adapting. They're ignoring what their consumers want. The consumer wants to either stay at home or have a better experience at the theater. They don't want to go to the theater to spend $50 for sticky seats and obnoxious company. (I can hardly remember the last time a movie at the theater wasn't marred by some selfishly loud commenter or teen who can't hang up their cell phone.) People will not continue to honor the monopoly of the theaters if the entire experience is terrible, the rest of the industry will not continue to ignore this either.
If the industry and the consumers abandon the theaters, who is left? No one. The theaters will fold at that point. America will then be left with an immense collection of empty big box multiplexes and a mere memory of when it was worthwhile to go out and see a movie.
Basically, while the limited monopoly answer is still part of the equation, it's not a good answer. Theaters can not afford to rely on this. The supplier is threatening to take it away and the consumer is demanding it go.
It's an indictment against the theater experience. The only way to fix this is to fix the experience. The answer lies in asking more questions. Questions like, "How can the experience be fixed?"