Greenaway's complex films have crossed into the mainstream
Speaking to The Times, Mr Greenaway said: "Cinema is dead.
"In the early 1950s and 1960s the whole family would go to the cinema every week of the year.
"Now you're hard-pressed to find someone who goes once a year."
Films should be more than adjuncts to bookshops, he said.
The artform must "reinvent itself and produce original work that stretched the imagination", he said, rather than churn out formulaic pictures that were like thousands of others.
Mr Greenaway's assertions about the UK box office are not supported by the available evidence.
According to Screen Digest and the BFI, UK cinema audiences hit their lowest point in 1984 when 54 million visits were made.
The total number of film attendances has risen almost every year since then, to 142.5 million in 2000 - the highest figure since 1972.
In March Mr Greenaway starts shooting his next film project, The Tulse Luper Suitcases.
The director plans to make a trilogy of 120-minute feature films covering the life of Tulse Luper, a "professional prisoner" whose crimes include espionage, embezzlement and murder.
Mr Greenaway said he wants to use the films to break away from older cinematic forms.
"I want to create a huge project that says 'goodbye cinema, hello new language'," he said.
Cult status
The films will be released in parallel with a series of DVDs, CD-Roms, books, TV films and websites, designed to draw audiences into the story and the characters.
Isabella Rossellini, the actress daughter of Ingrid Bergman, will star in The Tulse Luper Suitcases.
Mr Greenaway's filmmaking has often been controversial, but his multi-layered and visually sumptuous films - such as The Draughtsman's Contract and Prospero's Books - have often crossed into mainstream cinema while maintaining a cult status with fans.