How to enable to movie theaters to compete:
1. Make in-home screens larger than 42 inches illegal.
2. Make in-home audio systems with more than two speakers illegal.
3. Make fast forward/skip and rewind/back buttons illegal.
4. Start embedding random phone ringing, talking and infant screeching in the audio tracks of Bluray and DVD.
5. Require that home systems 1% chance making a curtain appear in front of the left and right edges of the picture. (Make sure it's time based so restarting won't fix it.)
6. Require that home systems digitally add film scratches and artifacts when playing older movies.
With all these perfectly reasonable requests implemented, people should start seeing the value in coming to the theater more. Anything less is a dire threat to the world economy and entertainment industry, both of which are very clearly on the brink of collapse because of criminals who have been allowed to brazenly pirate elements of proprietary theater designs into so-called "home theater systems."