Theatrical is a profoundly different experience than most home viewing and fears of cannibalization are grossly over rated. So many titles are generated each year that there is no shortage of titles that could be theatrically released, and although there are not so many titles that will ever appeal to all audiences, there are certainly enough to address the niches on a grand scale.
With more films hitting the big screens, more films could hit the little ones faster, allowing them to capitalize on the awareness that theatrical release creates.
With greater diversity of titles in the theater the audience grows, increasing the pie for everyone.
A greater diversity of experience also increases audiences enthusiasm for the movie-going experience, increasing their rate of going in the process, pushing attendance levels for everyone.
Recognizing both the joy of big screen and the risk of missing out that the shorter runs facilitate, audiences put a night out at the movies back on their regular schedule.
The net result: more films are released with shorter theatrical runs, enabling shorter windows between platform releases, and getting more films seen by more people, growing the box office and attendance levels, and cementing film going into everyone’s practice.
I recognize some may disagree with my assumptions…