Last year we saw Mickey Mouse going public domain and now every year more and more talkie movies are going public domain too. The talkies began in 1928, and I would say they got very close to what we have today in about 1934 or 35.
That means that every year people will have hundreds of "new" releases on public domain, making paying for watching new movies unnecessary. One thing is preferring the new movies when you have to pay both for new and old movies. Another thing is paying for new films when you have hundreds of old movies as good as the new ones (or better) for free.
I don't know about you, but I could spend the rest of my life watching public domain classics, no problem. For instance, I read a dozen books last year, only two of them were less than a 100 years old.
I would say Hollywood is in a pinch right now, something that will make them miss the days when their biggest enemy was piracy.
Method Acting (which is a pretty powerful Acting technique for getting actors to genuinely feel the emotions of the character) dates back to the 60s in Movies (it dates back even longer to Stanislavski in 19th century Russia, but its popularity really took off mid 20th century) so before that actors were just faking it whilst after that it will be more and more them reacting genuinely to imaginary circumstances (in terms of the audience it means we will actually empathise with what's hapenning to the character because the emotions on display are genuine).
So the quality of the acting in the kind of Films that are now coming into the Public Domain will be lower than what we are use to (though in stuff like Comedy and certain kinds of Action it's seldom noticeable).
And this is before we even go into the quality of the Production (in audience terms, how believable are the scenarios).
I doubt Hollywood will be threatened by this for at leat a couple of decades.