We propose an approach of a reference modulation in a collinear holographic storage system to increase the signal-to-noise ratio (SNR). We derive a solution that shows that the point-spread function is related to the autocorrelation function of the reference pattern times a defocusing phase term. Accordingly, the lens-array phase modulation is proposed and demonstrated theoretically. The SNR of the system can be dramatically enhanced to 63.2, rather than 2.3 in the traditional approach. (C) 2010 Optical Society of America