Theater is not going to replace movies and television, indeed it has been the other way around and now film and tv are to some degree being eclipsed by online media and the video game industry.
Some actors simply prefer the environment of theater where the work and reward of a performance each night is immediate. Meaning a few weeks of rehearsals and then you swing into the daily rhythm of a show each night. You perform, the audience (hopefully) applauds at the end. In the tv and film medium there is no such immediate reward and you usually shoot scenes out of sequence. There is no audience beyond the production crew on set and most of them are busy with their jobs. In film it can take a year, two or even three before the film comes out in theaters which is why you often see actors kind of stumbling through interviews when it's time to promote a film. They may have done 5 films since then and simply can't remember much about the movie they are now promoting.
Theater from city to city is bound to be hugely different. Hollywood is an ultra competitive place with a high failure rate. I would argue that theater on Broadway is the same. Anywhere where the financial stakes are high is bound to bring in a certain element of ruthless operator. Survival demands it. Would this be the case for a small theater in Idaho or South Dakota? Doubtful.
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