This is definitely a response to the Xbox Game Pass announcement. However, PS Now remains a streaming-only service at this time. Xbox Game Pass titles are downloaded and run locally - and this will include XB1 titles and in the near future 360 games. I much prefer local installs over streaming, when possible. At $10 a month it seems like Xbox Game Pass has the potential to be really good.
With that being said, it's nice to see PS4 titles come to PS Now. One thing Sony fans should consider: if Xbox Game Pass does well, it benefits you too. The better XGP performs, the more likely Sony is to step up and introduce features, as well as drop price. They should drop price and offer a discount program similar to Game Pass. They should also let you can download and play PS4 games locally on an actual PS4. They can't do so with PS3 games on a PS4 because the system isn't capable of backwards compatibility, but at least PS4 titles would be nice.