While the two heavy weights slug it out in a high-priced battle of consumer favoritism, why not just have the little guy sneak up from behind and deliver the necessary coup de grace? While your competitors are slowly but surely lowering their prices to the magic number, why not just come in and start there directly?

That’s exactly what London based New Medium Enterprises was thinking when they announced plans to use traditional red-laser optics technology to deliver high definition content to consumers. The new format, dubbed HD VMD (which stands for “High Definition Versatile Media Disc”), was first demoed early last year, but only managed to generate a little hype. Even though the concept was played down by the bigger names and their high-profile, over-priced formats, New Medium Enterprises stuck with its guns and continued development.

The technology behind HD VMD is ingeniously simple. Instead of trying to impress the industry with fancy new names and brand new laser technologies which require the complete retooling of entire production lines, New Medium Enterprises decided to take existing DVD technology, beef it up a little, and combine it with the leading edge in compression technology.

In order to be able to store hi-def movies in resolutions up to 1080p, the company has managed to boost the maximum number of data layers on a standard DVD from 2 layers per side to 4 layers – maybe even as high as 10, according to some reports. HD VMD discs would, therefore, be able to store anywhere from 20 GB to 50 GB, which is plenty of space to comfortably fit a full length feature presentation. Commercial releases would be encoded using a proprietary HD VMD codec, but players should also be able to play MPEG-2, MPEG-4, WMV 9, and H.264.

The real beauty of this new format comes from the fact that it uses what is essentially old technology. Since HD VMD’s don’t require new laser technology, they should play just fine on current generation DVD players once they have undergone a simple firmware upgrade. This simple fact means that this new format will be able to hit the market in late October of this year at incredibly low prices. The first batch of players is slated to cost no more than $199.

Such a low price would mean that if the company manages to market their new format properly they should have no problem appealing to the average Joe, who might be far more willing to a few hundred instead of a few thousand.

There are, however, a few problems that I foresee with this new format. Blu-Ray and HD DVD have been out for over a year now, which means that those two formats will have far better consumer brand recognition by the time that HD VMD hits the streets this October.

The success or failure of HD VMD won’t depend solely on public recognition and acceptance. New Media Enterprises will also have to convince the movie studios that their format it a worthwhile investment and that they should start releasing movies in the new format. Many studios might be very hesitant to sign on with a new format, especially since so many of them have already invested a fortune in the production and marketing of either Blu-Ray or HD DVD – even both in some cases. The only studio is have signed up with New Media Entertainment so far is Mel Gibson’s Icon Studios.

And then there’s always the computer market; they’ll need even more convincing. Talk to any geek about which next gen format they would like to see succeed and the answer will undoubtedly be Blu-Ray. Why, you ask?

The potential for mass data storage is so much greater with Blu-Ray when compared to the other candidates. Storing 50 GB, which is the rumored upper bound on HD VMD, is quite trivial on a Blu-Ray disc. With a VMD disc, you’d have to squeeze 5 layers onto each side of the disc to get close to 50 GB, while the same task on a Blu-Ray disc only takes two layers. At this year’s CES, Ritek revealed that it had developed a technique to drastically increase the storage capacity on Blu-Ray discs to a maximum of 250 GB.

This new format has potential, but I’m afraid that it might be too late in the game for anyone else to come in and steal the glory from either one of the current leaders.