Telecom is selling TiVo set-top boxes at a bargain basement rate as Sky moves to relaunch its internet television offering in November.
Telecom has ended its exclusive reselling deal and is offering TiVo for $10 a month over 36 months.
At $360 the broadband and recording devices now cost 60 per cent less than the $920 charged when TiVo launched in November last year.
Despite heavy marketing uptake for the high-tech broadband and recording device, sales have been slow. But Telecom said it was still committed to TiVo.
Telecom spokesman Mark Watts said the $360 offer was "a price promotion pure and simple", not a permanent price drop.
Customers who do not have their landline with Telecom can purchase TiVo at what is (now) its standard price of $499, Watts said.
TiVo is distributed in Australia and New Zealand by Hybrid Television Services - one third owned by Television New Zealand and two thirds by the Australian Seven Network.
Hybrid is focusing attention away from the TiVo personal video recorder devices and towards the Caspa software for downloading movies and television shows from the net.
Technology commentator Peter Griffin said Telecom and TiVo would not be popular with the few who did pay the full $920 price.
Despite the end of the exclusive reselling deal, Watts said Telecom remained the only internet service provider to offer unmetered broadband that allows downloads of movie and television shows.
Bargain basement rates come at a pivotal point in the battle for TiVo and Caspa to get a foothold in the emerging market for internet television. With Sky in nearly 48 per cent of homes, a big part of the population is already out of reach.
Sky chief executive John Fellet sees the market for internet television as being for those who do not want the commitment of a pay subscription.
But beyond the move to digital and the growth of personal video recorders, programmes downloaded from the net are seen as the most viable business model for television.By John Drinnan @Zagzigger Email John