Your link is worthless when it comes to the mass market.  Cherrypicking the top X BR movies to compare is a fallacious argument.

Looking at the whole state of the industry as in my third link, you see both unit sales and revenue growing at a rate of 1.1%

We all know that BR movies bring in more revenue than DVD sales per item.  Therefore, if BR were driving the growth in physical media, the revenue would be growing at a rate faster than the unit sales; more money per sale = more money growth than unit growth.  However, because the two are equal, we know that any growth in BR movie sales is offset by more growth in DVD sales.

Let me repeat.

If BR sales have gone up 10 Million Units, DVD sales have risen MORE than 10 million units.  That's not what we saw in the DVD transition; by this point, even though VHS was still the market leader, it was on a downslope as people adopted DVD.  DVD, on the other hand, is still on an upslope (one that is faster than BR, as it turns out)

At the same time, Digital Downloads have the greatest upslope of them all.

You said, and I quote,

I am showing you the numbers that say you're wrong.  Digital Distribution is already showing itself to have a much greater chance to hit the mainstream than BR. 

It has faster growth as well as a larger userbase right now, a smaller barrier to entry, and a diverse, healthy ecosystem of companies competing for it.  It has all the marks of being the true replacement to DVD; BR, at this point, will end up being a niche product like UMD (that is, it still gets the movies, but will be nowhere near the driving force in the industry).

They are giving the consumer options. With the PS3 you rent SD, rent HD, but SD, stream from your computer, download from your computer, purchase DVD's and upscale, or purchase Blu-Ray and play Blu-Ray.

Still Blu-Ray remains the BEST quality you can get at the moment with the most features, and its exclusive to the PS3.

Did you even read the links?  My guess is no.

The third link talks about the rate of growth of revenue and unit sales.

My source for BR being more revenue per sale is gotten from the fact that BR costs around $30/disk in the US, whereas most DVDs max out at 20ish, and huge tracts of DVDs are available for less than $10.  Frankly, it's common knowledge that a BR sale is more revenue than a DVD sale, that can be seen at any time when you go to a store.

We know that unit growth and revenue growth are the same in terms of % because of the link that talks about them; they are both 1.1% growth.

It's basic math from the information I gave to show that DVD unit sales are growing faster than BR sales.  As this is a sales website, I will leave the calculations up to you, and I encourage you to prove me wrong (hint: you won't be able to.  The math works out).

And yes, Digital Distribution does have a higher potential userbase right now, but it ALSO has a higher ACTUAL userbase as of right now.  I've only been using Hulu in my calculations so far; this is a small subset of the digital users out there. 

Youtube, Apple Movie Store, Netflix, Amazon; all these companies have their own users, and Youtube alone dwarfs the number of total BR players on the market.  Hulu is approaching rapidly, even if you count every single PS3 owner as a member of the BR movie-buying userbase, and the others have certainly shown enough profit so far that they're expanding their offerings.

Entertainment software set to grow 17% by 2010
GfK: Videogames, Blu-ray will drive lift

http://www.videobusiness.com/article/CA6571170.html

Growth for this year and the next several years will be almost exclusively from the games sector, with game software for all console, PC and handheld platforms expanding to $33.3 billion this year, up 22% from 2007. Games growth will be about 18% in 2009 and 12% in 2010, according to the report.

Home video, meanwhile, will remain virtually flat at either side of $34 billion worldwide through 2010, with growth from the fledgling Blu-ray Disc format compensating for declines in the aging standard DVD.

Blu-ray sales will more than quadruple this year, to $1.5 billion worldwide, according to GfK, then grow 184% in 2009 to $4.1 billion and another 94%, to hit $8 billion in 2010.


Blu-ray has outpaced DVD adoption

http://www.videobusiness.com/article/CA6572676.html

JUNE 23 | The adoption rate of Blu-ray Disc drives has outpaced that of standard-definition DVD players almost a decade ago on both sides of the Atlantic because of gamers buying Sony's PlayStation 3 consoles, which include the high-definition disc drives, according to separate estimates.

As of the end of this year, Blu-ray's third on the market, Western European consumers will have acquired Blu-ray drives at more than six times the rate buyers had bought standard disc players by the end of 1999, U.K.-based Futuresource Consulting said last week. In the U.S., customers are acquiring Blu-ray drives at three times the rate they bought DVD players nine years ago, said Michael Youn, Lionsgate’s VP of strategic planning and business development, at a Las Vegas conference yesterday


Lionsgate reports record first quarter

http://www.hollywoodreporter.com/hr/content_display/news/e3i1bbfaf7a505146058e35fc2777bd16e1

Studios and retailers alike are hoping that a higher consumer penetration of Blu-ray players will help reverse a drop in home entertainment spending last year. U.S. customers spent $23.4 billion buying or renting DVDs in 2007, down from $24.1 billion in 2006, according to trade group the Digital Entertainment Group. Studios such as Lionsgate are forecasting about $1 billion in Blu-ray sales this year.

“Longer term, as player prices continue to fall, title availability grows and awareness increases, Blu-ray Disc players will become the product of choice, given the fact that they also play DVD and CD media,” said Jim Bottoms, managing director of corporate development at Futuresource, which was formerly known as Understanding & Solutions. “There will come a time when the branded suppliers focus on this higher capacity drive, mirroring the trend we saw with DVD players replacing CD decks.”

...............................

Lionsgate also is optimistic about the future of home entertainment, with Blu-ray sales more than making up for any slowdown in DVD sales and growing from a projected $1 billion this year to more than $10 billion in 2013, according to company analyst Michael Youn, vp strategic planning and business development.

Acknowledging media reports of a sluggish home entertainment sector that ultimately will consist mostly of digital downloads, Youn noted a highly publicized Forrester Research report from 2003 that predicted DVD sales would drop 9% by 2008 while VOD spending would increase more than 300% to $4.2 billion.

"They were wrong," Youn quipped, noting that DVD sales actually rose 9% over the past five years while VOD spending increased just 30% to $1.3 billion.

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alot of people don't have/can't afford internet...that is a big problem for VoD

I have shown absolutely nothing about VoD growth?  Look at my links again.  One of them is for a little site called Hulu, and how many people used it in April, 2008.  That site was launched end of august (so basically september) 2007.  In less than a year, the site grew to be bigger in a single month than BR sales combined over twice the time period.

I have done NOTHING but show you hard evidence and data, and analysis.

If you have problems with my analysis, that's your prerogative; however, don't try and pretend I am not backing it up.  I am taking into account the most inclusive data I have to fight against my argument, and deliberately only giving myself a small subsection of digital distribution to go against the entirety of Blu-ray; guess what?  DD still is more 'mainstream' than Blu-ray, and is seeing massive growth right now.

And those same people will be able to afford bluray players and movies in the next 2 years?