Inception hit a new Blu-ray milestone by accounting for 65% of first week disc sales. This breaks the old record of 52% set by Iron Man 2. This is huge because this is the first time that you're seeing a Blu-ray title outsell the DVD by a roughly 2-to-1 margin.

http://www.blu-ray.com/news/?id=5629

While this is certainly encouraging news for Blu-ray, the overall year-to-date market share has been stuck around 15% since about the second quarter.

The pattern that I've seen over the last couple of years has been a huge sales surge beginning in late-November. In January, the effect of all the new BD players bought during the holidays begins to take hold and disc sales increase accordingly. But, that sales increase levels off around March and the market share doesn't really change much until November.

It will be interesting to see what happens in the first quarter of 2011. That will likely point to the direction that Blu-ray goes in 2011. I have a lot more thoughts on this that I'll probably try to round up when more information comes out in conjunction with CES in early-January.

But, my general impression is that Blu-ray currently occupies an uneasy middle ground. It's definitely not a hobbyist niche, as Blu-ray has clearly gained a mainstream foothold with all major studio releases coming out day-and-date with the DVD version. But, it's not a sure bet successor to the DVD's dominance either. While Blu-ray has seen healthy growth numbers this year, it's no longer on the accelerated trajectory that we saw during the DVD format's fourth year. By the end of the DVD format's fourth year, it was a virtual certainty that it would supplant VHS. I don't see the same certainty with Blu-ray.

We're still seeing incremental growth with Blu-ray, and the signs in the past few weeks point to the format's market share going past 20% for the 4th quarter. Two years ago, Blu-ray's market share was somewhere around 5%. Last year, it was about 10%. This year, it will likely settle in somewhere above 15%, which is lower than I thought Blu-ray would be at this point.

While Inception points to significant momentum for the holidays and an encouraging indicator for Blu-ray adoption, the format still has some challenges to overcome and 2011 looks to be a crucial year in determining Blu-ray's longevity.