The correct answer is: Neither I nor II follows.
The statement says that cinema halls are incurring heavy losses because people prefer to watch movies at home. This does not mean that people will never go to the cinema again. There are still many people who enjoy the experience of watching a movie on the big screen. In addition, cinema halls offer other services, such as food and drinks, that people cannot get at home.
Demolishing cinema halls and building residential multi-storey buildings would not solve the problem of people preferring to watch movies at home. In fact, it would likely make the problem worse, as there would be fewer places for people to go to watch movies.
Converting cinema halls into shopping malls would also not solve the problem. Shopping malls are already very popular, and there is no evidence that people would be more likely to go to a shopping mall if it was located in a former cinema hall.
The best way to address the problem of people preferring to watch movies at home is to find ways to make cinema halls more attractive to customers. This could include offering more comfortable seating, better sound systems, and more exclusive events.