deffman,

Since the incoming resolution is high (the benefit of Blu-Ray), and the digital signal on HDMI is set, the film mode processing becomes unnecessary. It can't improve the picture more because processing the incoming resolution would more likely reduce the quality of the picture than the ability to enhance it.

In short, processing that particular signal on that particular input is redundant. Your TV is telling you that it recognizes the signal as a good signal with a great resolution, and that feature isn't going to help improve it any more than it already is.

Happy Holidays!

--HDTech