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Benjamin Todd Whitcombe (24) accepted he was not ready to be released when he appeared before the board this month.
He was sentenced to three years’ imprisonment before the Dunedin District Court in September 2018 on four charges of exporting objectionable publications and one each of importing, making, possessing and possessing objectionable publications for the purpose of supply.
The court heard he was sentenced to home detention for similar offending three years earlier.
Despite completing the STOP programme, aimed at addressing harmful sexual behaviour, Whitcombe continued his pattern of online offending.
He came to the attention of Canadian authorities in December through his use of a messaging app, using the name "Philosophers Stone", and later analysis of his phone found he uploaded four publications depicting the sexual exploitation of a child.
An investigation by New Zealand Customs showed the crimes had taken place at a north Dunedin address and at his parents’ home, the court heard at sentencing.
When his house was raided, Whitcombe said he knew the child-abuse material was "bad" and that he had used the app since he was 14 to communicate with people around the world.
Investigators also found a Tumblr account complete with Whitcombe’s photo, on which he went by the name "wandering philosopher".
His bio said: "Into everything and anything twisted ... Looking forward to conversing with the like-minded sick freaks on here. 18+"
Over two years, Whitcombe messaged 128 other users.
Some of those conversations, in which he expressed a desire to rape babies, were so graphic court documents had to be redacted.
Whitcombe had been communicating with a 15-year-old whom he encouraged to engage in sex acts with an animal and he later received photos showing such activity.
Those images were later distributed by the defendant, using an anonymous file-sharing app.
The Parole Board heard Whitcombe had completed the child sex offender treatment programme while incarcerated and was now about to start the graduate phase.
"Although there is some concern about his manipulative behaviour and the fact that he pushes boundaries, overall, things appear to have improved," board chairman Sir Ron Young said.
"The concern was that while he had an intellectual understanding of the programme, he didn’t necessarily have the appropriate emotional connection to it."
Sir Ron noted there had been some investigation as to whether an extended supervision order, a mechanism through which Corrections can monitor high-risk sex offenders when they are released, would be appropriate for Whitcombe.
The prisoner will see the board again in February.