Well if you mean that it is relatively easy and cheap to make great sound at low volume levels then I agree absolutely...but small rooms don't sound right to my ears.
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There are systems optimized for all situations large and small. You have a good point that a small room can afford immense A/V pleasure and to some degree better than a large room. Personally, I have always found the home theater experience flawed in a large room mainly because the sound field is so immense, yet the picture screen is small by comparison - they don't seem to "fit" hand-in-hand. A smaller room seems more intimate and the sound field not as huge (compared to the screen). No challenge is insurmountable if you throw enough money at it though.
I think this would be a great point for the mass HT rags to explore as the mostly show "reference" rooms that are often large in scale and would tend to make the average consumer feel its not something they can afford money or space-wise.
I think a bit larger room is ideal IMO, I really like the fact I can get 5 friends in my room with plenty of elbow room for a movie........I am ina 14X24 space but if I didnt want to focus on audio 5ft or so could be taken off long dimension as my speakers likely wouldnt be way out in the room...so all in all 14x17 to 18ft would be great and thats exactly what Frm is talking about as many bedrooms would be that size.
My fathers space is 14X30 and I think its too long and doesnt sound "right" to me for movies as the rears dont blend as seamlessly as I would like no matter what I do with his Legacy Processor, it sounds great but something doesnt gel as much as I would like..
Again, to re-affirm, I think I'm mostly considering these specific points, related to performance:
1. Projectors have limited light output for perspectively large screens needed for larger spaces, and further seating distances (thus, in a large 3000 cu foot room, the perspective screen size will be proximally smaller for your field of view, due to size limit constraints that the projector/screen can handle with "quality")
2. Traditional passive consumer speaker systems, mated with the plethora of AV receivers out there (being marketed heavily to the consumers - who are either edjucated or not)
offer stronger efficiency, and potentially better dynamic performance in a smaller space - as opposed to having to drive more demanding speaker setups in larger spaces. Let's face it, a receiver does a MUCH better job of controlling smaller speakers "set to small", than driving full range passive 89db speakers in a large room (I think most reviewers would agree here)
3. The new DSP room correction, offered by companies such as Audyssey, can perform near miracles to the acoustics and system performance parameters, and, to a great degree offer benefits that outweigh what even more advanced high end systems without such correction can offer, all things equal!
Again, when I look at all the pieces to the puzzle, if I'm thinking about buying a $1200 AV receiver with DSP room correction, HD master digital sound, lowish power output capabilities compared to separates based systems (years of audiophile experience proves that to me) - and using a low lumen consumer projector (unlike the light several hundred thousand dollar, quality light cannons used in large commercial theaters) on a 100" screen - ALL the pertinent variables related to my understanding of performance from a system POINTS TO A SMALL ROOM SETUP!!! That's all I'm trying to say.
It's a perspective, anyway