Theater isn't as popular as movies because the cost is much higher -- for example, I paid $63 a ticket to see "Beauty and the Beast" on stage, but I could buy the DVD/Blu-Ray/"Special Platinum Diamond Plutonium Edition Never Before Released from the Vaults" version for about a third of that.
The second problem apart from cost is the experience. In the theater, I get one point of view, quite a distance from the stage (at least without paying almost three times the price) and there is no focus on particularly important bits of the action. From 32 rows back, I cannot see the tears on Belle's face when Beast is dead, and if I happen to miss LaFou's pratfall, because I happened to be looking at "Large Breasted Blonde Girl #2" during the "Gaston" song, I will *never* be able to see it.
With the DVD, I can rewind, watch it again, lather, rinse, repeat. I can do so in the comfort of my easy chair. I don't have to worry about the woman next to me wearing enough perfume to be a candidate for chemical warfare, or the 6 year old kicking the back of my chair.
When I go to the bathroom, I don't have to worry about the 30 other patrons tapping their feet impatiently behind me, or whether or not there will be any paper towel left to dry my hands.
Small Theater is dying (and has been for decades) because movies made it cheaper, better, and more comfortable not to mention more often, with 10 shows a day vs a maximum of 2 shows a day at a theater. On top of that, the movie performances are always, at least in theory, the very best the director could milk out of the actors, as opposed to the day the Lead actor shows up at the theater drunk, or depressed, or hung over, and flubs half of their lines.
Now the movies are in danger as well, because I can get nearly the same quality of viewing at home, with my big-screen hi-def TV. What am I missing? Nothing but overpriced candy, popcorn, and soda. Twenty years ago I was hitting a movie theater every weekend. Today, I see about 4 movies a year in the theater.
The ONLY place the theaters still have the advantage is with truly engulfing experiences (iMax) and 3D technology which is still too expensive an inconvenient for most home users. This display is the first step towards getting rid of that "inconvenient" barrier. True, projective 3D will be the death-knell for theaters, because there's no way this thing scales up to theater size. Your home experience will now be far superior to the theater for anything but iMax nature films.