New Medium Enterprises  (NME), a London based company, thinks that although BluRay is on the verge of becoming the standard optical format for the high definition entertainment, there could be a niche for cheaper solutions.

NME has created and is promoting a new HD format, HD VMD, or High Definition Versatile Multilayer Disc.

According to NME, which demonstrated its technology for the first time at CeBIT 2006, HD VMD is a true HD format with 1920 x 1080i/p resolution, up to 40 Mbps bit rate playback, DVD up-scaling so users can watch their existing DVD collection and achieve premium picture quality through their HD TV monitors.

The VMD has about 10 times the digital storage capacity of a standard DVD. This is achieved quite simply through a multilayer technology that exploits the unused or wasted space within the disc itself. The usual CD/DVD technology does not allow manufacturing disks with more than two layers (from one side).

In contrast VMD technology allows building disks (and compatible players) with 5, 10 up to a maximum of 20 layers. VMD is a multi-layered semi reflective disc. Its format, dimension, weight, coding, technological and operational standards, as well as the corresponding parameters of the drives/players (including reading rate and power consumption) meet the regular standards of CD, DVD, minidisk and other existing information carriers.

The HD VMD player is suitable for playback on all HD-capable display devices and will support existing optical disc formats: CD, DVD (DVD 5 & DVD 9). HD VMD players also feature Advanced Encryption Standard (AES) and all region codes for greater film viewing flexibility. The HD VMD format supports up to 7.1-channel Dolby Digital, Dolby Digital Plus, and DTS audio output, though it will not offer the high-bit-rate Dolby TrueHD or DTS Master Audio surround-sound codecs. But what is more important is that the HD VMD players are cheaper than a BluRay machine.

Instead of the blue-laser technology embraced by the BluRay camp, the HD VMD format uses the red-laser technology already used to create DVDs, and as a result, keeps the cost of manufacturing discs and drives low.

Currently, NME is offering two HD VMD players, ML622 and ML777, that are using a Sigma Designs EM8622L chip set to output the native 1080p resolution from the disc. 
While a BluRay player is priced at $400, NME said that its player costs $150 and $200 (ML777). According to the New York Times, the company said that the players will go on sale on Amazon within the next five weeks. NME is not promoting its format as an alternative for BluRay, but rather as a replacement for DVDs. 

"We do not intend to take on Blu-ray,” said Shirly Levich, New Medium's vice president and product development manager, in an e-mail message, quoted by the New York Times. “We see VMD as a natural extension of mass market DVD product enhanced to HD capabilities. We shall not rekindle the format war,” he added.

NME hopes to capture an audience especially outside the US. Also, the company claims that the VMD multilayer technology does not strictly function with red laser only, but can easily be applied to blue laser as well once the Blue laser technology is flawless.