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It’s not an App. It’s a Store.

Apple TV+ is launching today. We’ve already heard, and will continue to hear, hot takes on how Apple has far too little content, how the shows are hit or miss, that they can’t possibly compete with Netflix and Disney, and on and on.

But here’s the thing. Apple TV+ itself is not particularly important to Apple’s bottom line. And it doesn’t have to be for a long time.

Take a look at the TV app on your iPhone, iPad, or Apple TV. At first, when I saw the way Apple was mixing and matching all the content from available channels, iTunes rentals, purchases, and streaming services like Prime, I was annoyed. How am I supposed to find shows specific to certain sources in here? And more importantly, how can I tell the difference between what I already have access to with my existing subscriptions, and what is going to require a new subscription or a one-time payment?

And that’s the rub. You can’t easily get a screen with all the content you already have access to. Sure the library tab will show you movies and tv shows you’ve purchased on iTunes. But my HBO subscription? Prime? These are just mixed in with all the rest of the content. You can dig and find HBO specific pages, sure. But they are buried behind multiple layers of UI. And there’s a good reason for that.

The TV app is not an app. It’s a store. And Apple knows a thing or two about running stores. They know the more you walk in and hang out, the more likely you will spend some money while you are in there. If I see a new show that looks compelling from Showtime? I can subscribe right there in app. See a movie that I want to rent? Bam, one click of my remote, and I’m watching it. It’s a smorgasbord of impulse buys.

And Apple gets a cut of just about everything in there.

No wonder Apple is giving away a free year of Apple TV+ to people who purchase new hardware. Right now, they just need to drive people into the app. Apple could probably afford to make Apple TV+ a loss leader permanently, as long as the TV app continues to be the primary place you go to watch content. Sure, it’s important Apple creates some compelling shows to keep you coming. But they can afford to grow their Apple TV+ paying subscriber base relatively slowly. They can play the long game, as they are so good at doing. In the meantime, as long as a percentage of the massive installed user base rents a movie or two or subscribes to a channel every month, that revenue will easily outpace the measly $5 they might get from a couple of million TV+ subscribers in the first year or so.

Compare that to Netflix. Every time I open the Netflix app, I see nothing but content to which I already have access. Netflix will never make any more money with their app from me than what I’m already paying them monthly. And as new services take away non-exclusive content, Netflix is poised to become less—not more—valuable over time.

So while so many will want to focus on whether or not Apple is going to be able to sustain the budgets of multi-million dollar-per-episode shows, keep in mind that there’s a lot more money to be made here than a simple $5 a month subscription to Apple TV+.

TV+ is just one product on the shelf of a much larger store.