Well, let's not get ahead of ourselves, we don't know what Act 2 is yet.
If DC's roster begin to shift into the public domain, and that is a massive *IF,* then DC isn't losing their characters, just the exclusive rights to their earliest appearances.
DC does the legacy thing every few years; how many times has Bruce been replaced as Batman? I agree that DC does seem to be trying to build their franchises in directions that'll set them apart from any other versions that might arise thanks to public domain, and protect their assets from any potential legal challenge from creators, but let's not get ahead of ourselves or put more weight behind public domain than is deserved, this "rise of the legacies" thing is part of their normal cycle....they're just maybe putting in a bit more effort than usual now. These characters have all grown and evolved so much from their original stories that there's little resemblance now, and plenty of room for both to coexist. The only real threat to DC is that they might have to hire better creators to match the new competition.
And that's all assuming nothing changes over the next ten years and this becomes a thing that actually happens at all.
Indeed. My guess? DC's fandom is very specific in what they want and what they'll support, but that doesn't extend to other publishers.
I think, to put it in terms everyone here will understand, that people will generally look at public domain work like we look at Elseworlds. We don't expect an Elseworld to follow the same patterns we're familiar with, we expect it to go in surprising directions and do different things. I think audiences would look at non-DC stuff the same way. Public domain Batman is probably going to use guns and shoot people, because that was the Golden Age Batman. I wouldn't accept that from DC's Batman but I'll accept it from a different publisher using the public domain.
An excellent argument in favor of public domain. Any of the indie publishers must offer far more freedom that DC or Marvel, who have to answer to corporate overlords.