Sky plans to make all its channels and content available online, giving customers the option of doing away with a satellite dish.
The pay TV company already offers some programming online on its Sky Go and Now TV services and through Sky boxes.
Sky said offering the option was a “major development” that would let it enter new markets.
It hopes that making its hundreds of channels more widely available will increase both revenue and profits.
Italy will be its first market to get all Sky channels online, followed by Austria, with the UK expected to follow later this year or in 2019.
Sky is not proposing to stop broadcasting by satellite. The move will allow customers who cannot have a dish or do not want one to get Sky, a spokesperson said. A Sky box will still be required.
The company’s move is a response to greater competition from the likes of streaming services such as Netflix and Amazon.
Jeremy Darroch, Sky chief executive, said the consumer environment was expected to remain “challenging”.
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Reporting its results for the six months to 31 December, Sky said average revenue per user in the UK and Ireland – by far its biggest market – fell £1 to £46 a month.
However, the number of customers leaving – the “churn” rate – decreased from 11.6% at the end of 2016 to 11.2%.
Sky said the fall was a result of more customers taking its premium Sky Q box and a “more disciplined and targeted approach to discounting”.
Mr Darroch said there was good growth at both the top end of the market, with its premium Sky Q box now in 2 million homes in the UK and Ireland, and the bottom end with Now TV.
Now TV offers sports, movies and entertainment channels over the internet more flexibly and cheaply than through a Sky subscription.
A new USB stick will allow customers to watch Now TV content on any television – including EU countries when an expected change to “geoblocking” rules comes into effect this summer.
The number of Sky retail customers in the UK and Ireland rose by 255,000 to 12.9 million, while Sky added 365,000 new customers to bring the total to 22.9 million.
Like-for-like revenues rose 5% to £6.7bn in the half-year and pre-tax profit jumped by £106m to £448m compared with the same period in the previous year.
Last year 21st Century Fox made a bid to buy the 61% of Sky that it does not own. Both companies are controlled by media mogul Rupert Murdoch.
This week the the UK’s Competition and Markets Authority ruled that the proposed takeover was not in the public interest on grounds of media plurality.
Since Fox made the bid it has agreed to be taken over by Disney, so the US media giant could end up owning Sky.
Sky shares rose 1.1% to £10.35 in afternoon trading in London, valuing the company at £17.7bn.