Music streaming platforms are struggling to monetize their business models, but that’s not stopping an unexpected player from entering the arena. Remarks made by Tesla founder Elon Musk suggest that the automaker is preparing to develop its own tailor-made music navigation system.
Musk’s comments – which he made during Tesla’s annual shareholder meeting – don’t indicate on their own that the company’s proposed in-car app would compete with the likes of Spotify, Apple Music or SoundCloud. However, sources who spoke to Recode claimed the company has entered talks to that effect with major record labels. While no official statements have been made, Tesla may adopt a “freemium” model for their service similar to that of Spotify with Pandora-like stations comprising the base level of service.
A spokesperson on behalf of Tesla commented:
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. Our goal is to simply achieve maximum happiness for our customers.
There may be a more tangible opportunity as well. Despite its margin of loss increasing in recent years Spotify is widely considered to be the leader in streaming, boasting 50 million paying subscribers. However, Tesla sold 100,000 cars in January alone, and has taken 400,000 preorders for its forthcoming Model 3. If the battery-powered car manufacturer is able to convert a substantial proportion of its buyers into subscribers of its own music streaming platform then it stands a chance at competing in the already saturated market.
Tesla spokespeople has neither confirmed nor denied whether their music navigation software will take the form of a music streaming platform as of this writing.