Improvisation-based theater performance where there are no other actors apart from the spectators that came to see it and each of them gets to play. At first, this would best work as a specific performance in a repertoire of an ordinary theater. If proven successful, later the whole theater functioning by this principle could be established.
The spectators are not amateur or "to be" actors, but ordinary people, they buy a ticket and come to the theater just like they would for any other performance.
A different kind of theater experience - get both to watch and to play.
A way to practice your acting skills while having fun.
Get out of your comfort zone.
There are forms of theater like interactive and participatory theater that involve the audience in the performances, but I haven't seen or heard of cases where the spectators would be the only actors.
The setting of the theater hall: The cover image represents it quite well. The stage is in the center of the theater hall and the spectator seating is circularly placed around it. There should be not too many rows of seating, just one, a couple, or a few and the seating should be arranged in a way that it would be easy for people to walk to the stage and back to their seats quickly without bumping into each other.
The front row is close to the stage. The stage is not elevated, it's just the floor of the room, instead - the seating around it is. There could be wider gaps between different parts of the spectator seating to make it easier to bring decorative elements in during the performance. The backstage is behind the spectator seating.
The performance: People buy tickets to the interactive performance, come and take their seats in the hall. There are many ways how the performance can be organized, I'll give one example:
The performance is guided by a member of the theater staff. He/she doesn't appear on stage during the performance, just speaks through a portable microphone as a storyteller. Before the performance, this person explains to the audience/actors the basics of how this will work.
The act consists of many short performances with related or unrelated plots. Before each short performance, an automatic system randomly selects a few actors from the audience. A few spotlights are directed to some of the seats in the audience and those people all walk down and stand close to the stage (the stage circle is brightly lit, and the rest of the hall is in darkness). The storyteller is also close to the stage, in the darkness, with the to-be actors. He/she walks around and whispers in the ears of the actors some specific details of that scene if that's necessary. Other staff members prepare the setting of that scene by moving decorations a little bit and changing lighting/projections but it is mostly imaginary.
Let's say there are two empty desks brought on stage. The storyteller then begins by introducing the setting of the scene, e.g.: "It's an empty classroom in an ordinary high school". He/she then touches one of the actors and continues: "A girl walks in, sits down at the desk, and starts writing something in her notebook" The touched actress acts that out. The storyteller then touches another actor and continues: "After a while, a boy walks in and does the same". The touched actor acts that out. The storyteller continues: "Suddenly the girl looks at the boy and says..." The actress now has to come up with what to say, cause the storyteller only governs their actions, not their words. The performance continues that way and ends after about 10 minutes.
The actors then get back to their seats, the system picks other spectator-actors for the next scene, a different setting is prepared and the cycle continues until all the spectators have participated. The same spectators are not picked up again unless all of them have already participated and there's still time for the performance to continue.
Other details: This would be a theater's recurring or permanent (once or twice per week, month, etc.) event so that people would know what it's about and how it works and could go whenever they want. In the case where the whole theater works by this principle, different performances are organized differently according to the nature of each performance.
There would only be in-advance tickets sold online so that the staff could know the number of people attending in advance and thus better prepare for the performance. Each ticket has an assigned seat with a number and you must sit in your place. You can switch places with another spectator if you want, but you can't take seats that don't have tickets ascribed to them, because then you won't be able to participate in the performance and moreover - you'd complicate it.
Due to the unusual nature of the theater, the ticket cost could be lower or it could be donation-based at least at first, to attract more visitors and gain popularity.