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Amid the chaos, suffering, and death created by suspected gunman James Holmes, who is accused of opening fire into an audience watching a midnight screening of The Dark Knight Rises on July 20, there's a casualty few are talking about: the Aurora, Colo., theater where the tragedy took place.
The Century 16 multiplex will remain closed until police conclude their investigation into the shooting, which could take weeks. In the meantime, theater owner Cinemark Holdings (NYSE: CNK ) hasn't announced any plans for the multiplex or Theater 9, where the massacre took place, when it's eligible to reopen to the public.
But there's also a larger question at work here. Now that the sanctity of theaters has been violated, will audiences return in enough volume to produce sustainable profits for the likes of Cinemark or Regal Entertainment (NYSE: RGC ) , or will they choose to stay home and wait for streamed versions of their favorite movies?
The Dark Knight, rising
Audiences haven't yet abandoned Batman. The Dark Knight Rises earned more than $160 million during its opening weekend -- a new record for 2-D films and the third-largest opening for any film in any format -- and $289 million through its first 10 days at the box office.
The last in director Christopher Nolan's trilogy starring Batman, The Dark Knight Rises also earned more than $37.1 million in the first two weekdays following its opening, Box Office Mojo reports. By contrast, Marvel's The Avengers, now a billion-dollar blockbuster for Walt Disney's (NYSE: DIS ) Marvel Studios, earned $36.6 million over a comparable period.
In a poll published at Fool.com two days following the shooting, 36% responded that they had already seen the film at least once. Another 44% said they planned to see the film, while 4% hadn't made up their mind. Moviegoers apparently still want to see Christian Bale's Batman battle the villain Bane, played by English actor Tom Hardy.
A ragged curtain
Less clear is whether The Dark Knight Rises, The Avengers, and big-ticket films like them are the exceptions rather than the rule. Audiences may choose to rent romantic comedies or new Oscar-worthy dramas long after they've left theaters.
Recent history shows moviegoers have become more fickle. For example, Regal Entertainment has reported declining revenues in each of the past two years. Cinemark has enjoyed modest but slowing growth. AMC Entertainment, one of the nation's largest theater operators, has also enjoyed revenue gains but the cost of profits: AMC has reported losses in three of its past four fiscal years.
The movie theater in your home
Audiences are staying home because they can. Large-screen high definition televisions now cost only a few hundred dollars versus thousands just a few years ago. Computers, gaming consoles, and even tablets have become just as capable of showing high-quality films as the local multiplex. Streaming services such as Netflix (Nasdaq: NFLX ) and Amazon.com's "Instant Video" provide the content.
Netflix, in particular, says a lot about the rise of stay-at-home moviegoers. Earlier this month, CEO Reed Hastings announced that customers used the service to stream more than 1 billion hours of programming in June. Netflix has roughly 30.1 million members worldwide today, up from 25.6 million a year ago at this time.
Fighting back with premium showings
A growing number of cinemas now feature dine-in options or even bars in the hopes that audiences will dispose of more of their disposable income when seeing a movie. According to Yelp, at least 11 multiplexes in the D.C. metro area where The Motley Fool is located now serve alcohol.
Similarly, some operators have struck deals to outfit theaters for premium showings. In the case of The Dark Knight Rises, Nolan included 72 minutes of footage shot with widescreen cameras supplied by IMAX (Nasdaq: IMAX ) . Screens refitted to show the added footage accounted for $60.1 million in gate receipts over the film's opening weekend, a new record according to Box Office Mojo.
Such performances tend to be the exception rather than the norm for theaters such as the Century 16. And that, too, is a tragedy for an industry that's been struggling with theater closings, box-office bombs, low salaries, and missing profits for long before anyone heard of James Holmes.
Now it's your turn to weigh in. What's your take on the theater business? Would you invest in any of these stocks? Let us know what you think using the comments box below, and then be sure to add Cinemark Holdings and Regal Entertainment to your Watchlist for ongoing coverage. You're also welcome to a new special report that reveals three other American companies that are dominating on the world stage. Get your copy now -- it's 100% free to download.