Even if you thought another movie was gonna be as good as City of God right now, do you think you'd be as likely to actually go to the cinema to see it as you were in 2002 or might you simply wait, safe $20 and a trip and watch it at home 3 months later? I think both factors play a role and they have synergy as well. Fewer people go to the cinema -> smaller market and less incentive to take risks -> fewer people go to the cinema -> ...