Don't think they'll gain much market if they keep it this way. Lovefilm is £10, which is a bit more than Netflix (£6), but their collection is infinitely better.
worth noting: LOVEFiLM do have a "streaming only" package hidden away in the "upgrade package" menu[1] .... currently £4.99 but no doubt will be brought inline with netflix' £5.99
We got a LoveFile subscription trial with our new (internet) tv. At first I thought I had a limited set of films because it was a trial, but after some research is seems the streamable set of films are actually really limited.
The functionality is really bad too. I'm not sure if that's Sony or LoveFilm, but the way films are categorised has nothing to do with the actual film.
While lovefilm offer more when it comes to posting you DVDs in the post, Netflix looks like it has a better set of streaming (and netflix is only streaming it seems).