1) The locals do, but they won't pressure the guests/player characters to do the same.

2) Sure. If there is a theater the is locally owned, then it'll probably just have one or two small theater rooms. If someone wants to take over an empty building or warehouse to convert into theaters, then they can. We don't put anything in concrete in terms of locally run businesses to leave it open for players to make use of as they please. We're cool with whatever you decide for it.