Netflix has responded to the flood of new streaming competitors—including HBO Max, Disney Plus, and Peacock—by raising a couple of prices. The standard plan goes up a dollar to $14 a month, and the premium tier rises $2 to $18. The new rates are effective Thursday, the Verge reports. A spokesman said Netflix is charging more "so that we can continue to offer more variety of TV shows and films." The idea is to make ever-increasing investments in content, as well as tech features, to draw and hold onto customers. The content budget has gone up for seven consecutive years; this year's originally was planned to be $18.5 billion. Shares rose 4% Thursday after the announcement, before calming down in the evening, per CNBC.
Executives hinted at the increases during an earnings call with reporters this month, accepting that they could drive some customers away. One analyst said that, especially with the streaming service becoming close to indispensable for many viewers during the pandemic, the increases were worth the risk. "Some people might cancel, but I bet it would pay off for them,” he said. Reed Hastings, co-CEO, said he realizes customers might decide to check out the competition. But the company's strategy, Hastings said, is to "have so many hits that you know when you come to Netflix you can just go from hit to hit to hit and never have to think about any of those other services." (Read more Netflix stories.)