If a new report from Recode is right, Tesla’s next new product isn’t going to have one single wheel. The site is quoting industry sources as saying that the car company is in talks with record labels to build some kind of music streaming service.
Recode suggests that the end goal is some kind of in-car streaming service with different music tiers, starting with a Pandora-style internet radio. On paper, giving Tesla vehicles exclusive access to a kickass music service makes sense, but the practical side of things makes this a weird play by Musk.
Most obviously, there’s already a pile of music streaming services out there to compete with. Apple and Spotify have apps with tens of thousands of hours of development, long-standing deals with record labels, and the user base to have the upper hand in negotiations. Most modern cars have a crazy-simple way to stream music from a device through the car’s speakers, so building a music system into the car will only be a marginal improvement.
Then there’s the potential downsides. Car companies don’t have a great track record of competing against the smartphone for in-car functionality. Google Maps has the best navigation data around, USBs of music plugged into Microsoft Sync are virtually nonexistent, and I don’t know a single person who prefers their car’s voice commands to Siri. For anyone to sign up for Tesla’s music service, it’s going to have to be just as easy as using Spotify or Apple Music, and that’s not an easy thing to pull off.
That said, it is possible that Tesla succeeds on a much more limited scale. Satellite radio like Sirius is popular in luxury cars, and a more limited radio music option could be popular if it’s bundled in to all Tesla vehicles. Doing that wouldn’t cost nearly as much as building a full Spotify competitor, and could tie Tesla customers into an annual subscription that would be a money-making machine.