TiVo launched in Australia with a AUD$699 price tag and no subscription fees, and it has been doing OK base on past reports. But perhaps not well enough to satisfy Seven Network. Smarthouse reports that Hybrid Media Services, which was setup by Seven to handle TiVo in Australia launched a new TiVo offer. Under the new offer, called Flexirent, users are able to rent a TiVo for AUD$37.58/month over a three year period or AUD$48.22/month with a two year commitment. That would add up to AUD$1,352.88, or AUD$1,157.28, over the terms of the agreements. Conversely, it would eliminate the up-front cost, which may appeal to some users.

For users interesting in owning their TiVo outright, but for whom the AUD$699 cost is too much to swallow in one go, a 10-payment plan is also offered. AUD$69.90 a month for 10 months covers the cost of the TiVo.

The up-front, no fees and retail options remains for user who prefer that option.

Foxtel’s General Manager Box Office, New Media and Pay-Per-View, Brenden Moo responded by saying“I was under the impression that TiVo were not going to offer a subscription service their new Flexirent offering smacks of a disguised subscription fee”. That is one way to look at it, but he may be concerned as Foxtel’s pay-TV service subscription costs from AUD$37.95 up to AUD$105.95 depending on the package, and their iQ2 HD DVR is an additional AUD$200 up-front. So a TiVo subscription package priced about the same as their low-end offer with no up-front fee could provide some strong competition.

There’s another interesting tidbit on the TiVo Australia website, while they’re using MPEG-2 today for movie downloads, by March 2009 they plan to use MPEG-4 to reduce bandwidth usage and speed up downloads. Since other announcements for Australia have later appeared in the US it makes me wonder if we’ll be seeing MPEG-4 movie downloads in the US soon.