FOI reference: FOI-2024-1762
You asked
We have recently seen a number of internet streaming services introduce advertisements for their existing customers at the current price they are charging. They are offering an ad free service at a higher price. Is this treated as a price rise for inflation calculating purposes?
We said
Thank you for your query about how we treat changes to internet streaming services when compiling the consumer price inflation measures.
Generally, we follow the prices of a fixed sample of goods and services so that the indices reflect changes in price, not changes in the quality of the goods and services included. For internet streaming services, if there were a change from an ad free service to a service including advertisements, then we would regard this as a change in quality and exclude it from the sample used to compile the index. This procedure is described in detail in section 9.3c of our Technical Manual1. If a previously ad free service became available only at an increased price, then we would treat that as a price rise.
In practice, the precise treatment would also depend on whether there were other changes to the service being provided. For example, if the available content changed, then we would exclude the price movement from the sample, again because of a change in the quality of the service.