Spotify and Apple Music may soon find a new challenger in the music streaming service industry from an unlikely source: electric vehicle manufacturer Tesla.
According to reports, Tesla has been speaking with the music industry on the possibility of creating its own music streaming service that will be bundled with its electric vehicles.
Tesla To Enter Music Streaming Scene?
Sources in the music industry claim that Tesla has spoken with all the major music labels on licensing a music streaming service. The service will be bundled with the company's vehicles, such as the electric sedan Model S, the electric SUV Model X, and the upcoming mass-market electric sedan Model 3.
The full scope of Tesla's ambitions was not made clear, but sources believe that the company is looking to offer multiple tiers for the planned music streaming service. The tiers will start with a web radio service, such as the one offered by Pandora, which will be enabled by the internet connectivity already present in Tesla's electric vehicles through their dashboards.
The whole plan is seemingly not yet fully formed, but Tesla is already doing its due diligence by asking about acquiring the rights to stream albums and songs from the top artists from all over the world.
Tesla CEO Elon Musk actually hinted that the company was exploring music products at the latest shareholder meeting of the company in June. He said that it was difficult to "find good playlists or good matching algorithms" for music that drivers want to hear while on the road, and that the company will be announcing how it will solve the problem within the year.
Why Will Tesla Challenge Spotify And Apple Music?
The big question is why Tesla is planning to go through the trouble of creating its own music streaming service, when it can instead integrate Spotify or Apple Music into its electric vehicles. Tesla already has a deal in place to include Spotify in electric vehicles sold outside the United States, so such a setup can be done if the company wants to.
The labels will not turn down Tesla's overtures if it pushes through with creating its own music streaming service, as it will be another source of revenue. From the comment of a Tesla spokesperson, it appears that the company is indeed serious about its plans.
"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," the spokesperson said, adding that Tesla's goal is to "achieve maximum happiness" for its customers.
While Tesla is considered as the market leader in the burgeoning electric car industry, it will be jumping into a music streaming space that is currently dominated by Spotify, with 50 million premium subscribers, followed by Apple Music, with 27 million paid users and looking to pose a bigger challenge to Spotify by launching a $99 annual subscription option.
How Tesla's music streaming service will stand up against these two remains to be seen, but it will have to offer something beyond the usual features if it wants to make a significant impression in the industry.