It's just not about screen. But, it's projection room that makes all the differences. A decent projector costs around 15-20 lakhs and if you want a HD projector for theatre, the cost goes upto 60-80 lakhs which most of single screen with rate ranging between 10/40/60 can never afford. By the way, most of time, you don't really have to pay for machineries. The projection room is set up by satellite companies like QUBE, UFO and then they generate revenue on monthly basis or by advertisement. Though, there are some catch. If such company invests big in your theatre they keep a lot of things in mind like your locality, viewer reach, class of audiences and kind of movies a theatre owner releases.
What I think about South is they have really sufficient number of cinema halls. But, they've bad and out dated projection system. You have given an example.