This works until Theater A signs an exclusivity deal with the publisher of that pre-recorded performance, such that going to Theater B to see the same show is not possible because Theater B is not legally permitted to show it.
Granted, such exclusivity deals are rare (because generally publishers want to maximize their revenue rather than artificially constrain it), but not unheard of (for example: films made specifically for IMAX's fancy setups).
> Granted, such exclusivity deals are rare (because generally publishers want to maximize their revenue rather than artificially constrain it),
Well, also there was US v. Paramount Pictures [1], which prohibited film production companies from showing their films exclusively at their owned theaters. And follow-on rulings like Bigelow vs RKO Radio Pictures [2], that more or less established that distributing films preferentially is also unacceptable.
Granted, such exclusivity deals are rare (because generally publishers want to maximize their revenue rather than artificially constrain it), but not unheard of (for example: films made specifically for IMAX's fancy setups).