Blu-Ray may get a little more momentum this holiday season, thanks to a new program from Warner Bros. The studio, which earlier this year ran a trial program allowing customers to exchange their HD-DVDs for Blu-Ray copies of the same film, is now letting traditional DVD owners make the swap.

Consumers who visit the studio’s DVD2BLU website select the movies they want to exchange (assuming they’re one of the 55 listed), send the DVD in to the studio and can get the Blu-Ray version of the same film for a deeply discounted price (as low as $7.95). They’ll receive the BD versions within 4-5 weeks.

One important note: The film selection on the site is generally limited to older films, so if you’ve bought a DVD of a recent release and want to upgrade, you’ll have to make a second trip to Wal-Mart or Best Buy. And many of the films may be on sale during the holidays at prices rivaling the trade-in price. If the promotion gets good traffic, though, expect Warner to expand the number of films available for trade.

The NPD Group, keepers and analysts of all things consumer electronics data driven, believes Blu-Ray is about to hit the big time. The recording technology should penetrate the mainstream next year, it says.

The proclamation comes after the company compared the types of people using Blu-Ray players last February to those using them last month. Last year, early adopters (those electronics hounds who will buy virtually anything new and shiny) were 64 percent of the Blu-Ray users. This summer, they only represent a 38 percent of the audience.

That’s good news for Blu-Ray, of course – especially as we close in on the holiday shopping season. And while this particular survey honed in on Blu-Ray set-top boxes, the recent price cut of the PlayStation 3 could be another momentum boost as well.

With all due respect to my friends at NPD, though, I’m less convinced that Blu-Ray will find the acceptance of its forerunner – the DVD. To take full advantage of the discs, you need a high end HDTV and the numbers for that are still relatively slim. Meanwhile, digital distribution, such as the programs offered by Netflix and Vudu, is rapidly gaining traction. Both are being carried by multiple Internet-enabled television sets and have distribution through other outlets as well (such as Netflix’s deal with Microsoft’s Xbox 360).

Blu-Ray’s not going away anytime soon – and might find some mainstream acceptance, but it has a long way to go before it becomes the default storage solution for home video. 

Here's the good news, while DVD revenue was down a stark 14% last quarter, according to the Digital Entertainment Group (a home entertainment trade organization), Blu-ray revenue was up 105% and digital downloads were up 19%.

But here's the bad news: About a decade after digital movie downloads started and over two years after Blu-ray launched (and a year since HD DVD folder), their substantial growth is still not big enough to make up for the declines in DVD revenue.

To be precise, Blu-ray revenue rose $118 million to $230 million, while digital download revenue grew $78 million to $487 million.

Standard DVDs, however, fell $470 million to $2.89 billion.

That's a $291 million gap between growth in new formats and the decline of the old.

Back during the 100 Years' War Hi-Def DVD format war, Warner Bros. was the studio that played both sides, releasing its movies in HD DVD and Blu-ray. When it finally committed exclusively to Blu-ray at least year's CES, its decision killed Toshiba's format.

Given that it essentially screwed the tens or hundreds of thousands of people who bought HD DVD movies from it, Warner Bros. left behind some slightly pissed off customers. Which is probably why it's now giving them a great deal via a new website: Red2Blu. (Red was the color used by HD DVD to differentiate it from Blu-ray).

For $4.95, customers can trade in any HD DVD disc they have for the same film or TV show on Blu-ray. All they have to do is mail the cover art. Warner Bros. doesn't even want the discs. That's how worthless HD DVD is now, apparently.

Now that Blu-ray players are being made in China, the format's price problems may rapidly be disappearing.

Mark Leathan, Samsung's Marketing Director, told Blu-ray.com that the entry of Chinese manufacturers into the market means we'll start seeing $99 players soon. Most likely, I'd think, in time for the holidays.

Just this past holiday season, it was a big deal that Blu-ray players cost less than $250, reaching that price point much faster than the original DVD. While it's growing healthily despite the recession, the Blu-ray format is still a tiny fraction of the overall home entertainment biz. Last year it failed to meet the $1 billion mark predicted by supporters early in the year and wasn't nearly enough to make up for the decline in standard DVD sales.

$99 players could make a big difference. Video game console manufacturers have found that $200 and $100 are both psychological barriers below which sales are boosted significantly. Granted, these won't be the high quality players from manufacturers like Sony. But just as there are nicer name brand TVs and cheaper ones from no-name companies that do the same basic thing, Blu-ray will likely benefit from the same differentiation.

But while player costs may be falling, there's no evidence yet that discs will do the same. Studios have been loathe to reduce wholesale prices for the Blu-ray discs to the same as standard DVDs. And,  because the install base is so small, retailers never use them as "loss leaders." The result is that while prices for new DVDs generally range from $15-$25, hi-def discs cost $25-$35. Until the same efficiencies we're seeing in players reach the discs, Blu-ray will most likely never reach the heights of DVDs.

Fox is betting it can haul some water off the sinking ship that is home entertainment by selling different types of DVDs to consumers and retailers, as Variety and Video Business are reporting today.

Under the new program that's being launched with some titles, the rental version your local Blockbuster, or Netflix, get doesn't have all the special features. It's just the film itself and some trailers. If you buy the disc yourself, you get deleted scenes and commentaries.

Both versions of the Blu-ray are better, though there's still some differences. The rental edition has the film in hi-def along with bonus features. But only those who buy the disc get the opportunity to make a "digital copy" that they can watch on a PC and some mobile devices.

First movie to get the treatment is "Slumdog Millionnaire," with others like "The Day the Earth Stood Still" and "Notorious" following. The details will change on some films, for instance both versions of the standard def "Marley and Me" DVD have bonus features, but the retail Blu-ray contains both the hi-def and standard discs in one box.

Hard to say if any of this will make a difference, but it's an interesting example of a studio using technology to adjust its business model. DVDs, especially Blu-ray, can contain all sorts of different content and features. If you want more, Fox's thinking clearly goes, you should pay more. Or pay differently, at least.

Renting a standard def disc, after all, is the most casual, inexpensive way to get a film. Buying a Blu-ray disc is the most intense and expensive. It makes some sense to put gradations in between and essentially scale the content based on how much the consumer is willing to spend.

And of course if it means that some people will pay twice -- say, rent the DVD, and then buy the disc to see all the features -- well, getting people to pay twice for the same content is pretty much what every entertainment executive lives for. Especially now that home video revenue, once the growth engine for studios, is in decline.

It's also an interesting attempt to combat piracy. If you rent the movie and then rip it, you wont get all the content you would if you buy it. Not that that's a real impediment to anyone savvy enough to download stuff off of BitTorrent, or willing to buy bootleg discs on the street. But the studios are always happy to find anything they can do to make it a bit tougher.