Summary
- Tesla is changing its in-car music streaming strategy, causing a drop in its stock
- Tesla aims to control the entire in-car experience without phone-mirroring systems
- The automaker previously had a partnership with LiveOne and its Slacker product for music streaming
- Tesla recently added native apps for Spotify, Amazon Music, Apple Music, and Tidal
- LiveOne announced changes to its partnership with Tesla, causing a drop in LiveOne’s stock price
Article
Tesla is changing its in-car music streaming strategy which has caused its stock to decrease. The automaker does not use phone-mirroring systems like Apple CarPlay and Android Auto, preferring to control the entire in-car experience through its own user interface. Tesla had a long-standing relationship with LiveOne and its Slacker product for music streaming, touting the ability to ask the car to play any song. In Europe, Tesla had a native Spotify app and eventually brought it to North America in 2019. Over time, Tesla added more native apps for music streaming, including Amazon Music, Apple Music, and Tidal. Despite this, Tesla continued to offer LiveOne’s products through its Premium Connectivity service until recently.
Effective October 1, 2024, Tesla will replace the streaming button with LiveOne’s service in perpetuity. LiveOne also announced the launch of LiveOne 2.0, providing subscribers with access to music on all devices. Subscribers can convert to Premium/Plus services, potentially resulting in a threefold increase in Average Revenue Per User (ARPU). Starting December 1, 2024, Tesla will no longer subsidize LiveOne products for some customers. However, LiveOne will provide discounted music packages to all Tesla customers. Tesla will continue to pay LiveOne monthly for grandfathered users.
Those who had premium connectivity for the life of their vehicles will continue to receive LiveOne’s service subsidized by Tesla. Going forward, other owners will need to purchase a LiveOne Premium or Plus service to access features inside Tesla vehicles. LiveOne’s CEO, Robert Ellin, framed the changes as a positive opportunity for growth and increased revenue. Despite this positive spin, LiveOne’s stock dropped by over 20% following the announcement. The shift in Tesla’s in-car music streaming strategy reflects a move away from subsidizing LiveOne’s services and towards offering a variety of native apps for music streaming within its vehicles.
Tesla’s decision to amend its partnership with LiveOne likely stems from a desire to focus on providing a seamless in-car user experience without subsidizing a specific service. By offering a range of native music streaming apps within its vehicles, Tesla can cater to a broader range of customer preferences and potentially increase revenue. For users who prefer phone mirroring, Tesla’s shift may not have a significant impact. Personal preferences play a role in how users interact with in-car entertainment systems, with some users utilizing a variety of streaming services while others may stick with a single preferred service. Ultimately, Tesla’s decision to shift its in-car music streaming strategy aims to streamline the user experience and potentially drive revenue growth.
Read the full article here
