Yup, Lovefilm was also forced to switch to Silverlight. The content providers haven't learned anything from the mistakes of the music industry. This is going to end badly for them.
I doubt it. They'll continue to thrive because enough people will jump through their hoops. and they'll give up juuuuust enough ground to keep people agreeable.
How'd that work out with music and books? Amazon and iTunes became powerful players _because_ the DRM created lockin and they ended up controlling the customers. Publishers are stuck now that they gave control to Amazon and helped Kindle become a proprietary success.
The video producers seem to be running along, handing over the same control to folks like Apple and Microsoft. Not a good strategy long-term, when they want to make DRM go away and sell to any old platform. By then, people will be locked in via their collections on iTunes or whatnot.
Amazon Video (who coincidentally owns Lovefilm) uses Flash and continues to do so; so I'm not entirely convinced that the studios were the major role in Loveflim's switch.