TiVo's new CASPA Video on Demand service will let you choose between paying to watch TV shows, or sitting through a few ads and getting them for free.

The idea of watching online video for free "brought to you with limited commercial interruption" isn't new, to quote that familiar baritone voice-over at the start of Hulu clips. In Australia and New Zealand, TiVo intends to take the concept further by offering TiVo users the choice of paying $1.95 to watch some television shows or "letting the advertiser pay", says Robbee Minicola - chief executive of TiVo's Australian backer Hybrid TV.

This basically means the TV show will include an ad or two at the start, middle and end - none of which can be fast-forwarded. Shows will generally have one sponsor, perhaps two, so you won't be bombarded will nearly as many ads as free-to-air TV.

The movie houses are opposed to such a system, Minicola says, but CASPA will offer the advertiser-funded option for some on-demand TV shows next year.

"From next year you can say 'I want to watch that episode, I'll pay $1.95'. Or it will give me an option that says 'Let Toyota pay', for example. Now we know, 7000 to 1, that you'll let Toyota pay the $1.95. You gave the permission for Toyota to pay in exchange for your watching their ad," Minicola says.

"It's a trade-off. The old model is 'I'm going to put advertising in front of you whether you like it or not" and then eventually you forget why you're getting free-to-air for free. The reality is that the reason why we get to watch free TV in this country is because of all those advertisers, but then we do everything we can to not watch the ads. That's not fair to the advertiser because he's funding all the content."

"What we're doing is saying "if you don't want to watch an ad, we respect that, but pay your buck ninety-five."

I think punters will respond favourably to TiVo's proposed model, as people like feeling as if they have a choice. If nothing else, it's the price you pay to keep the copyright police off your back. Such an option would go ballistic on the iTunes store, although I think Apple would rather just take your money and run.

You can hear my full interview with Robbee Minicola on Tech Talk Radio on Monday night.