Arguably the most bizarre news this week is that Tesla is talking to labels about its own music streaming service. At first glance, this makes very little sense. So let’s try to unpack this, starting by looking at the only thing Tesla has actually said about the rumor.
“We believe it’s important to have an exceptional in-car experience so our customers can listen to the music they want from whatever source they choose,” a Tesla spokesperson told Recode. “Our goal is to simply achieve maximum happiness for our customers.”
Great, so Tesla is interested in music. Let’s speculate!
Why not just buy, or simply partner with, any of the existing players? Buying doesn’t make sense as Tesla has no interest in offering and maintaining its service outside of its products. Partnering isn’t off the table (Tesla already has a deal with Spotify for cars it sells outside the U.S.), but striking deals with every music streaming service would be a hassle.
The statement above seems to imply that Tesla wants its offering to be all-encompassing. That means the customer who already has Spotify should get as great an experience as the one who has never bought a music streaming subscription.
It makes little sense for Tesla to simply launch a standard music streaming service. Many tech companies (including Apple, Google, and Microsoft) have tried to create a proper multi-device competitor to Spotify, with varying levels of success. Smaller players have failed and been consolidated — streaming is not an easy business, no matter how you label it.
Streaming music only in the car is completely different than building a service that works on your PC, tablet, and smartphone. That said, Tesla likely wants existing music subscribers to be able to transition their listening when entering and leaving the car with ease, regardless of which service they currently use.
My best guess is that Tesla is doing its due diligence. Talking directly with the labels makes sense if you want to figure out all your options.
I’m very skeptical that Tesla is looking to launch a music streaming service that competes with Spotify, Pandora, Apple Music, Google Play Music, Microsoft’s Groove Music, Amazon Prime Music, SiriusXM, and all the rest of them. Instead, the company may be building a hub that works with the major players, à la Sonos, and also has a basic fallback option if you’re not currently paying for music. The easy solution would be to simply expand the Spotify partnership and call it a day.
Tesla didn’t take the market by storm by doing what’s easy.
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