If you have ever went to the theater, or to a production of anything, and had to sit in hard chairs, that had no arm rests, and were crammed together like sardines in a tin, then you likely know the importance of comfort in audience seating. The less comfortable the chairs are the less the audience likes the performance.
Audience seating has to be comfortable if you expect people to remain in one place for more than twenty or thirty minutes at a time. If you expect people to not only remain in one place, but to pay attention, and enjoy what is happening on stage, then you have to take the comfort of the chairs you are providing into consideration.
If you give people a cushioned chair to sit in they will likely sit still for longer periods of time. If the chair they are seated in has no cushion then the average person will start to squirm around in their seat in thirty minutes time. While people are squirming around they are not paying attention to the performance, they are thinking about how bad their bottoms hurt, and how soon they can leave. The minute the people in the audience start to squirm you have lost their attention and nothing you say from that point forward will sink in.
If the audience seating that you provide does not have places for people to rest their arms then they are not going to be comfortable for very long. When you have nowhere to rest your arms you cannot sit comfortably. If you are not sitting comfortably then you will not be paying attention to the performance. When there are no arm rests on the chairs people feel as if they are crowding the other people in the room. If the audience seating does not have arm rests then the people are not paying attention to you, they are worrying about whether or not they are infringing on the personal space of the person next to them.
Individual chairs provide the most spacious, and comfortable of seats for an audience, but individual chairs take up the most room. If a production company seats their audience in individual chairs they will have to charge more per ticket, because they will not be able to fit as many people into the room at one time.
If the same production company establishes the seating arrangements like they have in movie theaters then they can provide each person with a fairly comfortable seat, enough room, and they can fit more seats into a given room. That means they can reduce the ticket prices because they can fit more people into their audience at one time.
Any location that has to provide places for people to sit while they are listening to someone speak, or watching a performance, has to weigh the cost of providing chairs that are comfortable, against the possible loss of audience members from seats that are uncomfortable to sit in. The choice is not a difficult one to make.