Sky is taking on LoveFilm and Netflix by launching its own pay-as-you-go internet TV service, which will allow consumers to watch some of its movie and TV content whether they are Sky subscribers or not.
Sky Movies will be available from launch in the first half of this year, and content will later include sport and entertainment.
The as-yet unnamed service will be available across a wide range of connected devices, including PCs, Macs, laptops, tablets, mobile phones, games consoles and internet-connected TVs.
Sky said the new service would "complement" its existing pay-TV service, which it built around satellite distribution, and has made more convenient for subscribers by increasing chances to watch through internet-based services such as Sky Go.
However, the new service signals a departure from the subscription model, with Sky saying it will include a range of options, including the chance to rent single films.
Sky described it as "additional choice" for consumers who do not currently subscribe to a pay-TV service, or who are signed up with a different provider.
The move looks likely to provide stiff competition for Lovefilm and newly launched Netflix in the subscription video-on-demand market, both of which have launched new low-price packages for consumers to use their services online in the last few months.
Sky is also increasing the appeal of its taking its broadband service with a faster connection option and the inclusion of free access to 10,000 Wi-Fi hotspots.
The Wi-Fi hotspots are powered by The Cloud, which Sky acquired a year ago.
Consumers who subscribe to the Sky Unlimited Broadband service will be able to access free Wi-Fi through 10,000 hotspots in the UK, which includes partnered venues Caffe Nero, Pizza Express and Wagamama.
Sky will also be adding a fibre broadband product to its range in April, by increasing download speeds for consumers of up to 40 megabits for an extra £20 per month. The service is unlimited, has no usage cap, and will be available to 30% of UK homes.
Sky said the service would grow over time "in line with BT's fibre roll-out programme".
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