The Nasdaq Composite rose as much as 1 percent on Tuesday as shares of Netflix soared 6 percent after it announced it would raise its prices for streaming services.
The company’s Basic plan will now cost $9–up from $8. Its Standard plan will cost $13, which is up from $11, and its 4K Premium plan is now $16 as opposed to the previous $14.
Overall, prices went 13 to 18 percent higher–the online streaming service company’s biggest price jumps in over 10 years.
“We change pricing from time to time as we continue investing in great entertainment and improving the overall Netflix experience,” the company said in a statement.
Exchange-traded funds with exposure to Netflix were higher. AdvisorShares New Tech and Media ETF (NYSEArca: FNG) was up 0.75 percent, Invesco NASDAQ Internet ETF (NasdaqGM: PNQI) rose 2 percent and Invesco Dynamic Media ETF (NYSEArca: PBS) was up 0.56 percent.
The additional revenue stemming from the price increases will help Netflix’s investment in creating original shows and films. In addition, the additional income should help finance the debt it took on in order to compete with streaming services from the likes of Amazon, Disney and Apple.
Markets Move Slightly Higher
The other major indexes, the Dow Jones Industrial Average and S&P 500, were both slightly up on Tuesday. The Dow Jones Industrial Average fell over 100 points before climbing back to gain 60 points, while the S&P 500 was up 0.66 percent.
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Headwinds for the markets include the ongoing trade negotiations as well as the government shutdown that could be drawn out to a point where it affects the economy.
“We estimate (the shutdown) will reduce first quarter real GDP growth by approximately 0.5 percentage points,” Zandi wrote in a research report. “Of this, about half will be due to the lost hours of government workers, and the other half to the hit to the rest of the economy,” said Mark Zandi, chief economist at Moody’s Analytics.
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