It's almost certainly both, & a combination of the two (more games on at awkward times & more dross matches meaning people cut their sky sports service & watch streams of just the matches they want instead).
However it is chicken & the egg. I daresay most of those people would pay if it were a more reasonable price, I'd certainly pay a tenner a month for sky sports instead of streaming games.
Until the TV rights prices come down so the sports package price reduces its hard to know what the balance actually is, but the prices have clearly begun to top what a great many people are prepared to pay.
There's also the 'watchable' factor.
The majority of the UK now has fast enough broadband to watch free streams that are equivalent to SD broadcasts at least, so the price difference is simply too much for not much more quality or convenience.
The free equivalent is watchable & readily available. In a normal market that would drive prices down or produce much lower priced alternatives (amazon video & netflix for example), but due to it being multi party & football having external factors (global TV rights & footballers salaries) it will take much longer.