The film industry has been clamouring for the past 10 years or so about declining revenues and profitability, something they claim is due to piracy.
Cinemas however should not suffer from most of the effects of film piracy. Cinemas represent a premium offer in terms of quality, comfort and selection. Sadly, they have grown distanced from this representation, thus reducing the value of their offer, and subsequently diminishing the impact of their unique selling point. Whereas films sell stories and how they are told, cinemas sell an outing, making concerts and sporting events direct competitors, whilst differentiating them from TV, DVD/Blu-Ray or on-demand video.
Simply put, whilst the home viewing experience has improved over the past 20 years, cinemas have not.
Going to the cinema is not necessarily a pleasant experience, even before the price is factored in. Upon finding a cinema that is showing a film you want to see at a time you're available, you has to go to the cinema without being certain of getting a seat 1. Then you have to watch 20-ish minutes of adverts, trailers and PSAs, something that regularly amounts to a quarter or even a third of the actual film once you deduce the flying logo sequences and credits. The seat you're sitting in is at best moderately comfortable, and of questionable cleanliness, but that's quickly a secondary point in your mind when other patrons start talking, texting or eating noisily. If you need to go to the toilet, you're going to miss some of the film 2.
Of course, the high prices are not a massive draw either. Apart from thinning the number of patrons, they also make those that do attend less likely to purchase refreshments. Watching a two-hour long film in a room with 300 other patrons without refreshments can be somewhat uncomfortable, so again that decreases the value of the cinema's offer.
Another aspect that affect viewers' interest is partly outside the cinemas' realm, but is symptomatic of wider industry problems : films seem more repetitive and formulated than before, with sequel/prequel/trilogy making ever-increasing shares of films shown by cinemas. Per se, there is nothing wrong with developing a well-received universe/film, nor with film-makers wishing to tell a complete story through independent segments. Problems arise when film-makers fall into the trap of making sequels that serve no purpose regarding the story, or awkwardly tie what is quite obviously an independent and unrelated story into a franchise by dropping in the same protagonist and shoe-horning references to the previous films. Not only does this dilute the film's universe, but it also prevents meaningful character development.
Cinemas suffer from this because it gives viewers the impression that they are just viewing a poor mix of two stories, and doesn't really create much anticipation for the next film in the series. Spider-Man 3 was a huge box office draw on the basis of two well-built films, but ruined the franchise so bad the only way to generate interest in the storyline again is through a re-boot. Superman can tell you that reboots are risky, and Batman shows that even if a reboot is well done, it's not necessarily a great box-office draw. In any case, cinemas get burnt for showing poor films, even when in the short run it seems like a winning proposition.
Cinemas should be actively promoting and improving the quality of the experience they offer. Tackling problems related to noisy patrons is difficult, but if other entertainment venues manage it, there should be a way for films to do so too. Seats that are more comfortable might be more expensive and reduce capacity, but the current quality is not comparable to sofas and couches one might have at home. Film selection should be a core value proposition element, rather than just "latest releases". Film times are a difficult point that I doubt cinemas can overcome, but they should be more upfront regarding booking and advertising. One should be able to purchase a ticket on-line for a decent seat in advance and be notified of when the film will start, not the adverts or trailers.
Cinemas should not look at piracy to explain their lack of revenues and profitability, but instead look at their own performance. They have failed to evolve whilst the world around them has substantially changed. By accepting their role as little more than "seats" to which the movie studios push the latest films they have made, they created the conditions that lead to them lacking the ability to improve the experience they offer. Cinemas are not going away, but they are going to change. Smaller cinemas which offer a good experience are better suited to face the difficulties the industry is currently in. Rather than engage a futile crusade against piracy, cinemas and the film industry need to re-think their to-customer strategy, and identify exactly how they are creating unique value. 3D is a useful differentiator in some respects, but if it continues to be abused with cheap "in 3D" versions, then that effect will be diminished and eventually lost.
1 : Particularly a good seat.
2 : Having an urgent need in less than 120 minutes might be the patron's fault, but as the population ages, if cinemas wish to tap into the senior market, films that run for 180 minutes or more will inevitably need an interval.