Exchange coupled layers are suggested as a viable approach to the problem of making a magneto-optic (MC) storage medium for high densities. The couple consists of a storage layer with the requisite square loop properties and a weak perpendicular layer with a large MO rotation at short wavelengths suitable for diffraction limited optics MO storage. The layer with good magneto-optic properties is used as a transducer to read out the information stored as magnetic domains in the storage layer. The dependence of the square loop and MO properties on the magnetic properties and thickness of the individual layers is discussed. The systems NdFeCo/TbFeCo and CoPd/TbCo are used as examples. In general, a domain wall will form at the interface between the two layers and the energy stored in this wall is an important factor determining the switching field of the couple. It has been found that when the read out layer thickness is comparable to the wall width, the spins in the wali also significantly contribute to the MO signal.