I love going to the movies and used to go ever week. I rarely go now but it's because there just aren't many good movies being produced. I think a market is still there but it won't be for long if Hollywood can't produce anything that people want to see. I haven't tried to do a count but it certainly feels like the number of theatrical releases are WAY down from their peak.
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There is no doubt there is still a market. When we look at the success of Barbie and Oppenheimer, both I believe went over $1 billion, it shows people will turn out.
The question might be how many times per year will they? Even if there were the quantity of good movies, how many can afford a $50 hit before popcorn and drinks are included each week?