The economics of theatrical distribution

I think it is a well- known fact that most films lose money at the box office, and only recoup their money and make a profit through other channels of distribution, such as DVD sales/rentals and cable rights, etc. I found an absolutely fascinating blog by Mark Cuban, who seems at wit's end trying to find an effective business model for theatrical distribution. He fields all ideas from people out there in cyberspace, even offering a job for anyone who comes up with a good solution. Alas, I think he was a little disappointed with the results, but it lead to another entry with even further analysis. Really good, amazing stuff here that should be read by anyone interested in film/media creation and distribution.