Their content costs are much lower than Sky's. They get the fllms a year after Sky and most of their TV content has previously been shown on other channels.
Indeed, but when you ask people who subscribe to Sky what they watch, the vast majority of it is available FTA and most of the rest is repeats.
As for Lovefilm PPV, the prices are on a par with Sky Box Office.
Quite so, but you don't have to pay the £20 odd basic subscription before you can access this programming.
The Lovefilm and Netflix offerings are seriously better value than Sky and as people come to realise this, together with realising that most of what they watch is available FTA (as a result of getting Freesat or Freeview boxes for second and thord TV's), the more people are going to use alternatives to Sky's seriously expensive offerings.