I don't see this intentionally putting movie theatres out of business. If anything, if the cost is reasonable, many people who have satellite or cable might prefer this route. If you look at the cost to go to the movie theatre, tickets can be anywhere from $7.00 - $15.00 (depending on movie & whether you go during matinee or primetime) just for the ticket. If you get concessions, they really markup the price of their stuff. The smallest box of popcorn I last bought was around $6.00 with the largest bucket of popcorn costing around $25-$35. The drinks were also overly inflated. Soda (pop where I live at) was anywhere from $4.50 - $12.50. Pretzels were around $6.00. The boxed candy is something I don't buy and don't know its cost. Whenever I went to the movie theatre, I'd try to go during matinee to get a discount on tickets. If that movie theatre offers free refills on popcorn & soft drinks, I buy the smallest size to control costs. I will look at second run theatres too (usually in older theatre buildings) to get discounts on tickets & refreshments I have found to be a bit cheaper there too. The last time I went to the theatre (Cinemark in Lisle Illinois with a friend), I saw I Am Legend on the IMAX screen (not my choice) which I wouldn't waste my money on again since I don't see the big deal about IMAX. That ran $10.50 to see it on IMAX, or the ticket would have been around $9.00 on the regular screen during primetime. I bought popcorn & softdrink, & that costed me $10.00 for both in the smallest sizes. I did get one refill, but couldn't get another refill, due to the concession stand closing 45 minutes before closing.
Now if I had cable or satellite, I'd probably look at that this option of viewing a first run movie at home. All I have to pay for is for viewing the movie on demand. I can have any refreshments I want from my own cabinets & refrigerator for the cost of whatever I paid for it at the grocery store.