If I have a free year of Apple TV with my new phone, why do I have to pay to watch a movie?

There seems to be a misunderstanding. The year offer is for Apple TV+, a streaming subscription Channel in the Apple TV app with its own Apple-produced original content. The subscription does not include iTunes Store movies and TV shows (that are also presented through the Apple TV app).

 Find out about the content from the links:

https://www.apple.com/newsroom/2019/09/apple-tv-launches-november-1-featuring-originals-from-the-worlds-greatest-storytellers/

About Apple TV+ - Apple Support

The shows will have the tv+ logo on them