Netflix prices will now form part of the British consumer price index
The UK Office of National Statistics ONS has added Netflix, Inc. (NFLX - Get Report) and other video streaming services to the basket of goods that it uses to calculate the consumer price index CPI this year in its annual review. Since CPI has to reflect the changing costs that people face, it is rebalanced every year to have a more accurate mix of goods and services that people normally buy.
Video streaming replaces DVD internet subscriptions in UK CPI
"Video streaming services are being added as part of a combined DVD rental/video on demand subscription services item to reflect the trend of consumers turning more to downloads for watching films and TV programmes. The combined item replaces DVD rental internet subscriptions," says the report. DVD recorders were also removed from the CPI mix as part of the same trend away from DVDs and toward online video.Despite all the characteristic maybe caricatured differences between American and British television, Netflix, Inc. (NFLX - Get Report) has had a lot of success expanding into the UK, hitting 1.5 million subscribers last year. Inclusion in the CPI is a form of mainstream acceptance, since it implies that this is a typical cost that shows up in enough Brits' budget to merit government attention though the ONS also added birdseed to the CPI basket this year, so maybe investors shouldn't get overly excited.