The state-owned broadcaster revealed yesterday that it now valued its 33 per cent stake in Hybrid Television Services, which cost it $9.7m two years ago, at zero.
Hybrid Television is a trans-Tasman business which distributes the TiVo set top boxes.
TVNZ's half-year results revealed a 45 per cent fall in after-tax profits to $4.9m despite a 10 per cent rise in operating revenue to $205.4m.
The fall in profits was driven by the Hybrid Television write-off. The write-down, which includes losses at the associate company, was revealed in TVNZ's otherwise strong results for the six months to December 31.
Chief executive Rick Ellis was unavailable for comment, but a spokeswoman for TVNZ said the broadcaster did not regret making the investment.
"Certainly not. It demonstrates I guess what you would call the incredibly fast-moving industry at the moment."
The TiVo boxes allow viewers to pause and record television shows on to a hard drive and fast forward through advertisements, similar to a service offered by Sky Television. The boxes include an internet connection to allow viewers to buy shows or archived TVNZ programming.
TVNZ did not disclose how many customers had bought the set top boxes in New Zealand. Last year Telecom, which has so far had exclusive rights to sell the TiVo boxes in New Zealand, halved the price of the product amid speculation of sluggish sales.
The spokeswoman said TVNZ "understood that sales were going very well". The write-off did not mean the broadcaster saw no future value in the business.
"Not necessarily, no. As with buildings and things, they can be valued up and valued down."
Earlier this year, Hybrid Television chief executive Robbee Minicola said the company was in negotiations with other internet providers to promote the TiVo boxes. There has been speculation the boxes may be stocked in mainstream consumer electronics stores.
The write-off does not affect TVNZ's current cash position.
During the period, TVNZ generated operating cash flow of $32.3m, an increase of $11.9m, with the broadcaster's debt plunging 61 per cent to $15.25m"