Once you've answered that, apply it to a different era, when there were far fewer theaters, like, say, the silent era in 1915.
Are you sure
there were fewer theatres in those days?
Once upon a time, every suburb in Australia
had a picture theatre. It was the only way for the general public to see visual news ("newsreels") and cartoons. Many of the buildings still exist today, but most got turned into supermarkets, car showrooms or office complexes in the 60s (competition of TV), McDonalds restaurants or video rental shops in the 80s. The successful
suburban ones were eventually divided up into multiplexes. It would be a similar story for the US?
The law of supply and demand. It's not as if good films ever had trouble finding audiences. Or that people missed out on seeing movies because it was hard to find a cinema. Rural towns ran "picture shows" in local community halls - and even tents.