Holographic storage offers a way to cram hundreds of movies onto a single DVD-size disc, but the first commercial offering, due out next year, is a high-end archival system that costs tens of thousands of dollars and requires special playback machines.

Now researchers at GE Global Research, in Niskayuna, NY, say that they are closing in on a mass-market version that would be compatible with older DVDs and CDs–technology that GE says could reach the market in 2012. If the project pans out, consumers could hold vast video libraries on a few holographic discs alongside the regular DVDs in their living room.

GE expects an initial version of the holographic disc to hold 300 gigabytes of data, and future versions will hold as much as one terabyte–enough for 40 high-definition movies or 200 standard-definition movies. While the first buyers might be companies seeking simpler ways to archive their data, GE ultimately wants to target the broader market. “The average consumer will be able to buy a drive in the next three or four years that would have this technology, and they can play everything,” says Brian Lawrence, manager of GE’s Integrated Polymer Systems Lab. “It will go from audio CDs of the 1980s all the way to the new ultra-high-capacity terabyte holographic discs.”

Information is stored on a CD or DVD as a pattern on the disc’s surfaces. Holographic storage involves, instead, encoding data using patterns of light interference within the body of light-sensitive material. This leads to a much higher storage capacity, so holographic storage has the potential to eclipse even today’s leading high-capacity optical storage format, Blu-ray, which can be used to store 50 gigabytes of data on a single disc.

And yet, although several companies are working on holographic storage technology, the only imminent commercial offering is a high-end system from InPhase, of Longmont, CO, a spinoff of Alcatel and Lucent Technology’s Bell Labs.

InPhase plans to market an $18,000 machine and 300-gigabyte discs that cost $180 apiece. Art Rancis, the company’s vice president for sales and marketing, says that the system should be available to buy in late 2009. He adds that the company is also planning 800-gigabit and 1.6-terabyte versions, with the latter slated to reach market by late 2012. Despite the high cost, InPhase foresees big demand, initially in video production, medical-imaging storage, and government.

GE’s technology differs in subtle yet important ways that could broaden its appeal significantly. While both versions use lasers to record data, InPhase’s technology encodes information using thousands of overlapping 3-D patterns known as pages, each containing 1.4 million bits. These pages are about one millimeter long and 0.8 millimeters wide, and a single disc can contain as many as 1.7 million pages. They are recorded through the whole depth of the media, and can coexist in the same physical space. The InPhase disc reader simply reads a specific page by viewing the disc from a different angle. However, this calls for sophisticated recording and reading optics.

In the GE version, each hologram measures 0.3 micrometers by 5 micrometers and represents a single bit of information. They are patterned across a disc in a way that resembles the patterns on the surface of a regular CD or DVD, and they’re arrayed in a plane, with multiple planes layered throughout the body of the disc. The company’s current prototypes have 21 layers, but Lawrence says that the goal is to achieve between 50 and 100 layers, or one terabyte of data storage.

The way that GE’s holograms are arranged across a disc means that playback machines will be able to play older media, Lawrence adds: “Our technology uses formats similar to those in existing optical media but does it in the entire volume of the disc in many, many ‘virtual layers’. These discs will be very similar to the DVD or Blu-ray discs but are much higher capacity.”

GE is talking to several electronics companies about creating playback machines, and it wants the technology to fit well with existing disc-manufacturing techniques. While the InPhase version sandwiches its special optical recording media inside another type of plastic, the GE discs are made from a polycarbonate that can be processed with conventional manufacturing methods. The material can be melted, injected into a mold, and cooled to form a disc, the same way that today’s optical media are made.

InPhase claims to be unconcerned about competition from GE, arguing that each company is targeting a different market segment. “I think that’s a great design goal for GE,” Rancis says. “But for our particular customer base, none of those people have material on DVDs. We are only doing high-end customers.”