Faced with stiff competition from alternative forms of entertainment such as Sony's (NYSE:SNE) PlayStation and Microsoft's (NASDAQ:MSFT) Xbox -- not to mention home theaters that have grown in sophistication while shrinking in price -- the cinema-house biz is circling the wagons.

AMC and Loews, major players both, have announced plans to hook up and create a new corporate multiplex that would control nearly 6,000 screens. Congratulations, you two; you make a lovely couple. Still, it's hard for a movie buff not to wonder whether this particular love story may actually be a romantic comedy or, worse, a farce.

Even with the latest News Corp. (NYSE:NWS)-distributed installment of Star Wars and Time Warner's (NYSE:TWX) Batman Begins packing them in, theater attendance has been on a steady decline throughout the year -- it's off by almost 9%, according to an article about the proposed merger in today's Wall Street Journal. And while some of that softness is likely due to subpar products -- Miss Congeniality 2, anyone? -- it's entirely possible that the descent here is just, um, a preview of coming attractions.

To wit: When you can hang at your pad and play ever more lifelike video games, or just have Netflix (NASDAQ:NFLX) ship the latest DVD releases to your mailbox from the comfort of your own computer, it becomes proportionately harder to justify heading to the local movie house.

Who, after all, wants to spend $30 or so on tickets and concessions for the "privilege" of having little Johnny kick the back of your chair while your fellow "adult" patrons chatter incessantly or actually answer their cell phones?

OK, OK: Perhaps I am a bit cranky. And who knows? It could be that consolidation is just what the industry needs, with economies of scale helping to offset the erosion of ticket sales.

Fact is, though, we simply have more -- and more appealing -- entertainment choices nowadays than we did even a mere five years ago. And with that in mind, the theater biz should probably get used to cutting a smaller slice of the entertainment-revenue pie.

Time Warner and Netflix are recommendations of the Motley Fool Stock Advisor newsletter service.

Shannon Zimmerman heads up The Motley Fool's Champion Funds newsletter service and currently thinks Napoleon Dynamite is the best movie since The Empire Strikes Back. No, he isn't kidding. Shannon doesn't own any of the securities mentioned above, and the Fool has a strictdisclosure policy.