Many people thing $10 is too expensive for a movie ticket, why would they pay $150?
How large? Because we can't pretend that piracy isn't a thing.
The theatre is expensive, sure. But it also has an audio visual experience that dominates anything anyone can have in their home, which is part of the premium.
Is it worth $50 for a one-time movie experience in your home? Are people so desperate to see a movie they can't wait for it to reach Netflix or Amazon for "free", or pay $20 to own it on Bluray? I'm skeptical.
There are fewer and fewer reasons to go to the theater. Why would you pay upwards of $10 for a ticket, $20 for a popcorn and soda to sit in someone else's filthy chairs to be advertised to for 30 minutes straight and listen to people chatting and children screaming?
Unless you're there for the social aspect, i.e. with friends, the value just ian't there.
I've noticed in the last few years that there are fewer and fewer movies that I'm even vaguely interested in seeing. Maybe when I was living at home and near a theater that offered $4 tickets, and no ads, I might take a flier on a potentially bad movie, but at $12-15 a pop at the chain cinemas around here, when the movie doesn't start on time because they are showing 45 minutes of ABC commericals... Nope
Plenty of movies I want to see will never see Amazon or Netflix (Where can I stream The Avengers?), and plenty of people have no interest in cluttering up their house or apartment with BlueRay copies of movies they only want to see once.
Unfortunately despite this I don't see this service becoming a reality. At least not with a selection of movies beyond indies. I don't believe the major studios will risk their relationships with the theater chains.