Foxtel is stepping up its battle for subscribers by slashing the cost of a basic cable package by half to $25 and launching a new on-demand BoxSets channel for pay TV and digital users.

The announcement came as part of a revamp of Foxtel's cable and satellite subscription pricing in what could be seen as a preemptive move before US giant Netflix, which is rumoured to be eyeing Australia, enters the local market.

"Many Australians feel that Foxtel is too expensive to fit comfortably into their budget," says the pay TV company's boss Richard Freudenstein. Credit:Christopher Pearce

"We recognise that many Australians feel that Foxtel is too expensive to fit comfortably into their budget," Foxtel chief executive Richard Freudenstein said.

"They know that we offer fantastic content but they just don't feel they can stretch their finances to afford it," he said.