So, that all means that the price is too high. They should lower it, not raise it. That’s the logic here? Or do you think the previous price was optimal for the long haul?

Well with these products that cost the producer effectively zero for each additional sold, the optimum price for the producer, if they’re forced to charge everyone the same price (ignoring the strategy of price discrimination for now), is whatever price maximizes subscribers x price. It is probable that $5/month will get more people to subscribe, especially the type of person who tends to subscribe for a few months at a time and cancels once they’ve exhausted what they want to watch. Whether that would be enough to make up for the lower price is less clear, but they should probably model that for each price they’re considering.

Also, with price discrimination as a pricing strategy, the higher base price gives more maneuverability to try to maximize subscribers with discounts while still charging the most of the less price sensitive. And that’s what I think is going on here: using bundles and discounts (like free months of subscription with each physical Apple device you buy, or certain credit card perks where cardholders get credit from their bank for those subscriptions), and a higher base price to make those perks seem more valuable.