HD VMD boasts the capacity of HD DVD and Blu-ray discs, but uses existing DVD technology, making for much lower costs. The catch: None of the major studios have signed on yet.

New Medium Enterprises, the company that owns the HD VMD technology, has lined up Bollywood content from Eros Entertainment, an investor, and is pursuing deals in territories around the world, says exec VP Alexandros Potter. The outfit set up shop on Sunset Boulevard late last summer and has been meeting with Icon Prods. and Regency as well as the majors.

Former Warner Home Video topper Jim Cardwell is advising NME.

Unlike HD DVD and Blu-ray, HD VMD does not rely on blue laser technology, instead using an advanced layering technique to boost capacity on discs based on red laser technology.

Initial HD VMD discs will have similar capacity as the first hi-def discs released by the majors. But players will cost much less: Next month, the company will release software enabling users to play the discs on their computers, likely for free. Actual players cost less than than $300 -- a significant savings vs. the $500 to $800 HD DVD players or the $1,000 Blu-ray decks -- due to lower manufacturing costs.

The company's now eyeing March launches in India and China. Potter acknowledges the studios might take some convincing -- especially after having invested in the other high-def formats -- but believes they will come around to the affordable alternative.

"Hollywood will come," Potter says. "They have to understand what we have will make them money."