No Dish, No Contract - Sky Launches NOW TV

Sky has launched a pay-as-you-go internet TV service, as the battle for control of the digital living room heats up.

Google TV, widely considered a flop when it launched in the US in 2010, is due for release in the UK on July 30, and YouView, now backed by Lord Sugar, should be available by the end of the month.

Apple TV and Microsoft’s X-Box already offer streaming services on demand.

With the development of the British broadband network has come the ability to watch television via the internet, rather than through a traditional aerial, satellite dish or cable.

Ben Fenton, chief media correspondent at the Financial Times, said: "This is almost like fighting over the audience from the beginning all over again because we're all going to come into a new way of watching television.

"And so it's almost like it's the battle for the sofa from chapter one of the game."

Sky's NOW TV will offer movies at first, but then sport and entertainment, on either a pay-monthly (priced at £15 per month for unlimited access) or a pay-as-you-go basis, from 99p - £3.49 per film.

Simon Creasey, director of NOW TV, told Sky News: "The internet has opened up a new opportunity for Sky and for television."

He said the service is designed for an new audience of people who don't currently have paid for television.

"It gives people an opportunity to dip in and dip out to take the content however they want."

But this internet TV revolution will be entirely dependent on the quality of our broadband connections.

NOW TV will operate in standard definition only at first, and the service will use adaptive bitrate technology to minimise streaming disruption.

Sky knows the real test of internet TV will be in the buffering.