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News June 23, 2017

Is Elon Musk’s carmaker Tesla launching a streaming rival?

Is Elon Musk’s carmaker Tesla launching a streaming rival?

Tesla has reportedly already held discussions with major record labels regarding licensing deals for a Spotify rival.

According to Recode, the luxury car manufacturer is readying a music streaming service with multiple tiers of pricing. Its entry level tier is thought to follow in the footsteps of Pandora with an internet radio offering.

Those familiar with Tesla’s multi-billionaire founder Elon Musk won’t bat an eyelid at the prospect of the car company entering the music streaming market. Musk is also the founder of PayPal, SolarCity and SpaceX, which launched a landmark commercial spacecraft in 2012.

More than that, he’s renowned for entering struggling markets with ventures that rail against what is perceived profitable.

The proof is in the sales. Tesla sold under 100,000 cars last year, but has over 400,000 pre-orders for its new Model 3 vehicle.

As Apple Music, Spotify and Pandora struggle to make an annual profit (Pandora reported a net loss of US$132.3M for the three months to end of March), and with news of Guvera’s bankruptcy still front of mind, Musk has hope for the market.

Musk may have to rethink his Tesla sale add-ons though. Currently, anyone who buys a Tesla gets free data for the life of their car, and a free Spotify premium subscription for six months

This article originally appeared on The Industry Observer, which is now part of The Music Network.


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