re: Will we ever hit a point where movie theaters

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I think they may be more worried about cannibalization of movie sales. It's not like they can do a head count before showing the movie at someone's home so they probably have to target an average audience size. The experimentation they've done has been around the $60 price point IIRC. That price may be fine for a family or a group of friends, but why would a couple or a single person pay that much of a premium for home viewing?

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Well they can do a head count, there are webcams and software that can count how many people are in a room. So they could figure that out.

And they are not thinking outside the box for business models either. yes, you will get lower attendence in the theater but if priced appropriately, you get a larger audience plus fewer people to share the pie with. you could also do subscriptions, i.e. one new movie a month for $X but you have to buy a year.

I really think the bigger worry is piracy. once you stream it, its going to get ripped and posted online.