HomeTrading NewsApple lets you watch MLB games for free now so it can sell you another iPhone later

Apple lets you watch MLB games for free now so it can sell you another iPhone later

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Max Scherzer #21 of the New York Mets delivers a pitch in the third inning against the Miami Marlins in the Spring Training game at Roger Dean Stadium on March 21, 2022 in Jupiter, Florida.
Mark Brown | Getty Images

Starting Friday, Apple TV+ will stream a doubleheader of MLB games each week.

For the most part, it’ll be similar to watching a ball game on a traditional broadcast network, but with some extra features like the option to ask Siri for player stats or listen to your favorite player’s at-bat song on Apple Music. It’s also free, for now. There’s no need to subscribe to Apple TV+, which costs $4.99 per month, to watch. But it may eventually help Apple sell more iPhones.

Apple’s first significant foray into sports broadcasting points to its larger strategy with Apple TV+, which by all accounts — including Apple’s — has far fewer subscribers than players like Netflix, Disney+ and HBO Max. Whereas those services have more shows and movies than you could ever hope to watch in a lifetime, Apple TV+’s library is smaller and more carefully curated by people, not an algorithm.

And while no one at Apple would complain if TV+ racked up Netflix-level subscribers, that’s not the ultimate goal. I spoke Thursday with Apple representatives who told me their focus isn’t to dominate market share with services like Apple TV+. Instead, they want to focus on quality. (Of course, you could easily argue far more people would be signing up for Apple TV+ if it was that good.)

That made me think of something I wrote two years ago when the Apple TV+ was just getting started. Apple TV+ wasn’t designed to take on Netflix. It’s more like classic HBO — a prestige collection of Emmy and Oscar bait, without much filler in between.

The experiment is working on that front. Apple picked up the best picture Oscar last month for “CODA” and several Emmys for “Ted Lasso,” including outstanding comedy series. Meanwhile, the dystopian workplace drama “Severance” turned into a sleeper hit this year, with critics raving and Apple ordering a second season.

Netflix may have big hits like “Stranger Things” and “Squid Game,” but for every one of those shows, there are dozens of lower-brow programming options like “The Floor is Lava.” There’s plenty of quality within Netflix, but a lot of that can get lost in the noise.

Think about Apple TV+ the same way you think about all the extras included with your Amazon Prime subscription. Apple doesn’t need to make a huge profit from streaming TV. It just needs it as another weapon in its arsenal to keep you buying iPhones and other Apple gadgets. The new addition of live baseball games is a good experiment for Apple to see if it can garner enough interest to expand its sports offerings on Apple TV+ down the line others like Netflix keep avoiding live sports programming.

It also explains why Apple is reportedly going to launch an iPhone hardware subscription service, which would give you the option to bundle Apple offerings like TV+ with a new iPhone every year for a flat annual or monthly price. That’d be a double whammy for Apple. It’d get more customers upgrading their phones every year (instead of every three or four years) and add more subscribers to its services like TV+, Apple Music and Apple News.

Deutsche Bank analysts saw that same opportunity, saying in a research note Friday the potential hardware and services bundle would “drastically” increase subscribers for Apple’s digital services. That, in turn, would be a major catalyst for the stock.

All that comes back to the same story we’ve seen play out at Apple since it started its push into online services several years ago. The iPhone remains the prime profit generator, while everything else from AirPods to Apple TV+ are designed to keep customers locked in and upgrading their devices.

Streaming sports is just another piece to that lock-in.

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