Perhaps you remember the law of supply and demand from school. Now what happens when a business increases the price of its product beyond its demand? One of two things happen: people learn to do without or they find an alternative method to get that product. Enter internet piracy.
I know internet piracy has existed for a long time and will continue to exist, but I wager to you that its popularity is due in large part to absorbent prices of movie tickets, software, and other media.
A big part of illegal file sharing had included many commercial-free versions of prime-time TV shows such as Lost and Heroes. In an attempt to stem the piracy of these shows and to regain some profit, some networks tried selling these shows on iTunes. But that never seemed to take hold. People wanted to watch the shows when they wanted, but they didn't want to pay for them and didn't want to purchase a DVR.
Thus, hulu was born. A quick Alexa comparison between thepiratebay.org and the rise of popularity in hulu.com shows a direct correlation.
Today the most popular torrent seed is the new Star Trek movie. This begged the question, "How much is a ticket?" In my town that's $13 for just one adult. Ouch!
Charge people $2, let them watch it on their computer, make them watch commercials, and you will see ticket sales skyrocket.