We've looked at the three main players in the UK - Netflix, Lovefilm and NowTV - to see if television can be viewed the way we want, in high quality, and for less money than our current satellite subscription.
Boasting thousands of films and TV episodes across a wide range of devices, Netflix arrived in the UK earlier this year and costs £5.99 per month with no long-term contract to sign.
Netflix offers a free 30-day trial - although you need to enter valid credit/debit card details and remember to cancel if you don't want to start paying - so we signed up, downloaded the iPhone and Xbox apps, and got to work/watched a film.
Netflix: Catalogue and ease-of-use
We say iPhone app...Netflix is available pretty much everywhere, with apps for PlayStation 3, Nintendo Wii, Xbox, iOS, Android, Windows Phone and Smart TVs, as well as access via PC, Mac and some Blu-ray players.
Being able to watch films and TV on the move is great - and the app always continues from where you left off, no matter which device you're watching on - but what we're looking for is a replacement to our Sky subscription, so high quality content on our TV is what we need.
When first setting up Netflix you are asked to input how much a range of film genres appeal to you. Doing this helps Netflix to serve up content that it hopes will be relevant to you.
There are 17 different sections of content to browse, from Action and Adventure, to Comedy, Horro, Romance and Thriller. A Section of HD content and TV programmes are included in this 17, and there's an entirely separate section for kids' content with 14 genres covering Action, Comedy, Superheroes, Talking Animals and content from Nickelodeon.
To try and quantify the range offered by each service, we've searched them all for the top 30 films of 2000 to 2009 as voted for by IMDB users. It's not the most scientific test, but we wanted to see if complaints of these services lacking recent films are justified.
Netflix had just three of the 30, with notable absentees including The Lord of The Rings, Star Wars, Indiana Jones, all James Bond films, The Dark Knight, and many more.
As for television content, there is the usual American favourites like 24, Breaking Bad, Lost and Prison Break, as well as older content from the BBC and Channel 4. But, as with the film selection, you'll struggle to find much from the last year or two, although new episodes of Breaking Bad are available.
Netflix claims to offer HD content and there's even a separate section for it under the genres tab, but we found the quality to be no better than a standard definition DVD. It's good compared to most YouTube content, but no one is being fooled here - it's simply not HD.
This isn't a deal-breaker though, as there is a trade-off here between getting instant access to average-quality content, and waiting for HD video to buffer; and that £5.99 per month subscription makes us forgive Netflix's attempt at HD much more easily than if a £50 per month Sky package was of similar quality.
Both HD and standard video starts playing almost instantly - even on a connection of just two or three Mbps - and it's easy to skip through to a certain point in what you're watching, as a preview frame shows up when you hover over the timeline. Click, and there's just a couple seconds of buffering before the video resumes - of course, this isn't as easy on the Xbox, where fast-forwarding is the only option, but even then there is minimal buffering.
It's hard to fault how Netflix works; from the huge range of applications, to good quality video - even if it's not actually HD - and everything we watched streamed smoothly from the start, with no interruptions from extra buffering.
You'll only find a couple of films that are less than a year old, and very few less than two, but as we explain below, Sky has a stranglehold on new releases and to get them you'll be paying nearly three times more than the £5.99 per month Netflix costs.
Where Netflix has the upper hand is with television. There's a good range on offer here, with content from the UK and US, and while you won't find new episodes right after they've aired, it's a good place to start watching old box sets again and the interface makes it easy to dig out specific episodes.
As with Netflix, Lovefilm started as a postal service that delivered DVDs to your door from a wishlist that you filled out online. After already owning a large stake in the company, Amazon bought Lovefilm in January 2011 and has continued to run it as a separate company to this day.
At the end of 2011 Lovefilm Instant was launched, which streams high quality TV programmes and films to a range of devices and television sets - just like Netflix. Though it should be pointed out there is only a streaming app for iPad - iPhone and Android users miss out here.
However if you own a Kindle Fire HD, then Lovefilm is the default video service for the tablet and all video content is served by Lovefilm.
Lovefilm: Catalogue and ease-of-use
The service claims to offer 8,000 films, available to watch instantly and a lot of which can be streamed in HD, although in our case it was a far cry from actual HD (more on that below).
As with Netflix, you must create a user account and enter your billing details before starting the month-long free trial - and don't forget to cancel if you don't intend to continue using the servicve as otherwise Lovefilm will start charging you £4.99 per month.
A search for the top 30 films of 2000-2009 returned zero results. Every single film was available to rent on DVD (with a lot on Blu-ray, too), but Lovefilm's on-demand service was a letdown.
For television, partnerships with ABC and the BBC means there is a decent range of British and American programmes to choose from, but you'll struggle to find anything less than a year old.
Lovefilm's website isn't as intuitive as Netflix, but the Xbox app is very similar and makes finding what you're looking for completely painless. The website required us to install Microsoft's SIlverlight on our MacBook, which at first threw up a couple of errors, but a quick reboot soon solved these problems.
Despite adding an HD stamp to much of its content, Lovefilm Instant's quality, as with Netflix, isn't HD and instead looks similar to DVD.
When we first tried Lovefilm Instant on a laptop the quality was terrible and buffering interrupted our film every few seconds, but we tried again through the Xbox 360 app and found no such problems.
The internet connection we used to test these on-demand services is quite poor, at around 5Mbps, but that same connection had no trouble playing Netflix content without any buffering at all, so we're still putting the blame on Lovefilm's doorstep here, even if our experience on the Xbox was better.
As we said, it's certainly not HD and is probably slightly less than DVD quality, but it's watchable, and our view a few feet away on the sofa was perfectly acceptable, although the picture became slightly blocky during scenes with a lot of fast movement.
From the amount of content, to ease-of-use and picture quality, we felt that Lovefilm wasn't quite as good as Netflix, even if it is £1 a month cheaper.
We had some pretty major problems with playback on our laptop, with lots of buffering and poor quality video - and this was over the same internet connection that saw good quality and no buffering from Netflix.
The whole point of paying for a service like this is because you enjoy films and TV, and want to see more, but sadly the experience Lovefilm offers isn't enough to compete with Netflix.
Up the quality, or throw in some exclusive blockbuster content, and we may reconsider.
The newest on demand TV service, NowTV comes from Sky and essentially lets you watch Sky Movies online without needing to subscribe to anything else, and there's no satellite dish or set-top box required, as it's all streamed over the web.
At £15 per month, it's three times as expensive as Lovefilm Instant and Netflix, but NowTV claims to offer big-name blockbusters a whole year before its two rivals, and there's plenty of exclusive content here, such as all the James Bond and Harry Potter films.
NowTV can be accessed via a browser on PC or Mac, apps on iOS and Android, and through the Xbox 360.
NowTV: Catalogue and ease-of-use
NowTV's ability to stream films just about instantly is great, and skipping to any part in a film buffers very quickly too, but the quality isn't all that good, sitting somewhere between its rivals.
The Live TV option is perfect for recreating the channel-hopping that on-demand services usually miss out on, as you can flick around the Sky Movies channels and watch films as they are being broadcast.
If you stumble across a favourite, then you can easily watch that film from the start, so it's a nice blend of aimlessly flicking around until something attracts your attention, and being able to watch the whole film whenever you want.
Films are spread across 21 genres, but the total number at first seems very low - there's just two films listed under Factual, for example, and one of those is about Justin Bieber...
The Action category claims to have 15 films on offer, although only one of them isn't a James Bond film. This seems to be more of an issue with how NowTV arranges films into genres, rather than a desperate lack of content, but that's still a major problem - we want to be able to browse, without being forced to search for specific titles.
Just like its rivals, NowTV keeps a record of what you've watched recently, so it's easy to carry on with a film you didn't have time to finish - although some request that you finish watching them within 30 days of starting.
Similar to how the Sky Go apps work, you can only have two devices registered to your NowTV account at the same time, and changes to this can only be made once per month.
For example, you can watch NowTV on your Xbox and iPad, but if you want to watch on your computer then you'll need to remove one device before adding it, and then if you want to watch on your phone you'll have to wait a month before you can make the change.
After signing up on our laptop and trying out NowTV on our iPhone, we were unable to watch anything on the Xbox. This, being the third device, was expected. But instead of offering us the option to remove one or both of the other devices, the Xbox app gave us an error message, with no option to manage our registered devices.
A trip to the website on our laptop was needed to fix this. Ideally, we'd like to see the option to unregister all devices via the Xbox app.
New content is where NowTV shines; with the buying power of Sky behind it the service can offer new releases a full year before they arrive on Lovefilm and Netflix, giving NowTV a huge advantage if it's new films you're after.
Of the top 100 highest-grossing films in the UK over the past 18 months, Sky claims to offer 32 through NowTV, whereas Lovefilm has just one and Netflix doesn't offer any.
Once again, we searched NowTV for the top 30 films of 2000-2009 as voted for by IMDB users, and the service offered up nine. That's nearly 30 percent of what we asked for and three times better than second-place Netflix, so perhaps forking out the £15 is worth it if new releases are what you're looking for.
There's no HD option (we'd happily wait a minutes for it to buffer if there was) and older films in particular look distinctly average and not much better than something you'd watch on YouTube, which is a shame.
Overall, we'd say the quality of NowTV is still behind that of Netflix and a little better than Lovefilm, although thankfully it didn't suffer from any of the buffering problems of the latter; instead, video picked up quickly from wherever we clicked on the timeline.
With backing from Sky, NowTV can offer a lot of films before anyone else, so if it's the latest and greatest Hollywood blockbusters you are after - or James Bond and Harry Potter, which are Sky exclusives - then this is the option for you.
The quality is good enough and the website is easy to use, while the iPhone app works as you'd expect.
We liked the ability to tap into Sky Movies and watch any of the 11 channels live, but the complete lack of TV programmes is disappointing, especially when you consider at £15 a month NowTV is three times more expensive than Netflix or Lovefilm Instant.
That's the price you pay for subscribing to Sky's exclusivity, and if you want to watch the latest films a year before the competition, then buying the DVD or Blu-ray at great cost is the only alternative to paying Sky.
On the face of it, on-demand television is a great idea that gives you TV and films when you want them and where you want them, thanks to instant streaming to a number of devices, but unfortunately it's not as simple as that.
With each service here offering different content to a different range of devices and at different prices, it's not easy to pick a clear winner.
Instead, we have a marketplace full of compromise. Want the best quality and flexibility across devices? Get Netflix. Want to watch the newest films? It has to be NowTV. And if you want to combine streaming with DVD and Blu-ray rentals, then it's Lovefilm.
No one service offers all of the above and investing £25 into all three seems like overkill, but if we had to pick one then it would be Netflix.
The American company wins for combining higher quality video than its rivals that is quicker and smoother to load across a wide range of devices. It misses out on NowTV's exclusive new titles, but wins overall for being a third of the price - £5 a month is very good value in our eyes.
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