Look at Amazon already (yes I know its not a perfect picture but still). In the top 5 titles 3 are blu ray. Iron man and the dark knight are selling far better on blu ray then on DVD.
On one hand I do think Blu Ray will be the number one format even over DVD pretty soon on some movies, namely big releases and action movies. If you are going to get Iron Man or Transformers it really makes sense to make the effort to get the Blu Ray version if you can. As far as cheap DVD only movies or a lot of dramas go, its not as big a deal. I bet Blu Ray will overtake DVD on sales of action releases in pretty short order (a year or less) but will lag behind in terms of other types of movies.
Also it allows studios to sell older good movies again. I'll buy the Bourne series, the Lord of the Rings and others day one on Blu Ray even though I already have those on DVD. Again though, comes down to action movies. For dramas DVD is fine which is why you almost always see action movies bringing in the big Blu Ray numbers. Though Sleeping Beauty is doing well on Blu Ray. It's 1st on DVD and 5th on Blu Ray (above the DVD Iron man and others) so even outside action movies there seems to be a growing market for Blu Ray.
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