Homevid sales and rentals continued below their 2006 pace during the third quarter, with the business now down 3.5% overall to $14.6 billion for the year.

Studio execs say that gap is narrow enough for them to pull even with 2006’s $23.6 billion haul by year’s end, given the bonanza of box office hits slated in the fourth quarter.

Year-to-date sales of all formats through Sept. 30 were off 4.5%, slipping to $8.9 billion. Rentals, meanwhile, trail 2006 by 2.8%, at $5.7 billion through the third quarter.

“There weren’t as many releases in general in the third quarter, and consumers are picky and are waiting for the great titles to come along before spending their money,” says Lori MacPherson, Disney’s senior VP and GM for North America. “All of the box office for the year happened during the summer, so the release schedule for DVD is really happening in fourth quarter. The industry is down now, but the fourth quarter is big enough to pull us out of that.”

The biggest titles released in the third quarter were Warner’s “300,” Disney’s “Wild Hogs” and “Bridge to Terabithia,” and Universal’s “Knocked Up,” which came out Sept. 25.

Warner’s “300” sold a combined 250,000 units in Blu-ray and HD DVD during its street week, making it the fastest mover in the high-def era. All told, “300” speared $117 million in sales across all formats.

Universal achieved a studio best with its first-season release of NBC’s “Heroes,” selling 700,000 units in the quarter. That’s U’s best perf ever for a TV-on-DVD title. Also, Universal execs say season three of “The Office” is outselling its second season by 70%.

Despite the loss of the MGM catalog to Fox, Sony officials say they’ve beefed up their market share in the catalog area by more than 5% of late.

Meanwhile, on average, Lionsgate DVD releases of “Pride,” “The Condemned” and “Delta Farce” out-earned their respective box office grosses by five times.

After yet another quarter of negative growth, studios are building pressure for themselves to have a big Q4.

Disney anticipates consumer spending on new releases in the fourth quarter will rise 15% over the final quarter of 2006.

The total box office of titles hitting DVD in the fourth quarter is $4.1 billion, up more than 10% from $3.7 billion in 2006, according to studio estimates. That includes a record four films that took in more than $300 million at the domestic box office –“Pirates of the Caribbean: At World’s End,” “Spider-Man 3,” “Shrek the Third” and “Transformers” — and 15 more titles over $100 million.

“I think this is the biggest fourth quarter we’ve seen coming to video,” says Warner president Ron Sanders. “But retail needs to be able to execute the number of titles coming to the marketplace. We’re confident the consumer will shop, but one of the worries is that you just can’t maximize every title with the given shelf space.”

Warner’s “Harry Potter and the Order of the Phoenix,” for instance, lands on the same Dec. 11 date as Disney’s “High School Musical 2” and Universal’s “The Bourne Ultimatum.” That follows Disney’s third “Pirates” pic and Sony’s “Superbad” on Dec. 4.

“There is a fine line between not having enough titles and then having too many,” says Fox Home Entertainment exec VP and GM Simon Swart. “Some of the smaller titles could get lost in the shuffle.”

But many studios think they can beat the clutter with franchise power.

In the case of the latest “Potter” pic, for example, Warner will also bow a gift set holding the first five films in the series, as well as its first interactive DVD game featuring the boy wizard. “Ocean’s 13” will usher in Blu-ray, HD DVD and standard definition packs, each of which will hold all three films in the franchise.

Sony will be rolling out six product SKUs of “Spider-Man 3,” including a gift pack featuring all three installments.

“It certainly will get us multiple placements throughout the store,” says Sony homevid topper David Bishop. “You’ll end up being in the section where they carry Blu-ray, and also will be a permanent fixture through the end of the fourth quarter with the gift set.”

Studio execs are also predicting that HD DVD and Blu-ray sales will, for the first time, generate an appreciable sales bumpduring the fourth quarter.

Through the third quarter, HD DVD and Blu-ray sales and rentals generated only $120 million, according to multiple studio estimates.

Lionsgate exec VP and GM Ron Schwartz estimates that the total for both formats will grow to $390 millionby year’s end.

” ‘The Bourne Identity’ will be by far our most significant shipment of HD DVD to retail,” notes Universal Studios Home Entertainment prexy Craig Kornblau. “The sky is not falling; in fact, we are wildly optimistic that this fourth quarter will yield exceptional results.”