Does anyone know why this is a case or is it just a business decision to downgrade the VM offer for TV only customers?
The reply above, has covered most of the obvious, but I would pickup on your point about downgrading the service. To the best of my recollection, TiVo has never had any apps removed, and Prime has never been available. So it's not so much downgrading anything, as the fact that technology moves on and TiVo's are - fundamentally - old boxes.
There's no way of sugar-coating that, if you want to avail yourself of the newer V6 or 360 box that comes with much more capable hardware, then you will need to have a VM broadband connection. And before you ask, that's certainly a technical restriction although it's entirely possible an element of policy could feature.
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