Kiosk rentals, meanwhile, showed a dramatic 23 percent rise in Q3 year over year, a strong indication that disc rental machines from and other providers are a big hit with consumers.

The number of U.S. homes with Blu-ray players, including Sony PS3s, home theater-in-a-box systems (HTiBs), and BD set-tops, now stands at 33.5 million--a year-over-year increase of 52 percent. of Blu-ray players, which now sell for under $100, played a role here, no doubt.

Overall, the DEG report shows impressive gains for Blu-ray, which nevertheless will lose the format war to streaming services over time. For now, however, there's some life left in the business of delivering video entertainment on shiny discs.

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