The update to TVNZ Ondemand means that the service now supports a 1500kbps stream, along with 700kbps and 300kbps options.

“Our Digital Media Division is constantly working to provide the best possible online video experience we can, and as part of this we have introduced a higher-quality stream option for our viewers,” explained TVNZ's GM Digital Media, Tom Cotter.

“In the past we've kept to more modest streaming video bitrates to let as many people as possible watch and enjoy TVNZ Ondemand but as broadband penetration and data allowances have increased, along with the number of households that have access to high-speed internet in New Zealand, we want to give viewers the option of an improved viewing experience.”

TVNZ says it will be rolling out “a number of enhancements” to TVNZ Ondemand over the next few months. Putting the pressure on is Sky, who plans to hold an iSky event next week in Auckland.

Orcon and Snap customers can currently watch TVNZ Ondemand without it eating into their monthly allowable bandwidth.

Update: Our sister site Game Console is reporting that a similar update will be released for the PlayStation 3 app "soon".