Blog Morgan Stanley Analyst Says Tesla Streaming Service Makes Sense

News that Tesla may launch its own music streaming service was met last week with confusion. But, Morgan Stanley analyst Adam Jonas says autonomy will make cars the “4th screen,” therefore it’s not absurd that Tesla would pursue revenue from media.

In a note published Tuesday, Jonas said: “These firms could cede 100 percent of the value of content to the likes of Apple, Alphabet, Pandora, Sirius or Netflix. On the other hand, they could say: ‘Wait a second. This is our venue. Our OLED screen. Our speakers. Our HMI. Our seats. Our software. Let’s at least give the customer a choice of using our own apps before we too quickly go the way of the pure handset manufacturers.'”

Autonomy, he said, will enable drivers to take their hands off the wheel to focus on other activities, including music and video.

According to a report last week from Recode: “Music industry sources say [Tesla] has had talks with all of the major labels about licensing a proprietary music service that would come bundled with its cars, which already come equipped with a high-tech dashboard and internet connectivity.”

 

[ikjadoon]

One big hiccup: how will they integrate it into [the rest of] our lives?

We use music outside our cars, too: Is there going to be Tesla Music desktop apps? iOS and Android apps? A web version? Chromecast/Alexa support? Integration with set-top boxes and TVs and HiFis? Recommendation algorithms? Metadata accuracy?

What's the point of having playlists or songs that you can only access in your car? And Tesla's care and emphasis on the media player has been disappointing from a Silicon Valley company; looks like they didn't get serious until they found they could get revenue from it.

At this point, cars with Android Auto or Apple CarPlay have 1) better UI, 2) fewer bugs, 3) more services, and 4) faster updates than a $140,000 2017 P100D.

 

[Waiting4M3]

TBH I haven't made a playlist myself for years. When I have my laptop open I use Pandora, when I'm on FireTV I use Amazon music. There is so much choice who cares where the music comes from or which songs are available.

Extend this along the line of car sharing, if you make a playlist in your car's Spotify account, it may not work for everyone who drives that car. At that point you will need a service that can quickly adapt to multiple drivers. Having a 3rd party app which may require additional payment just complicates things.

To me the music streaming business has 3 barriers, cost to license the music, cost to stream the music, and cost to put your UI in front of the user. For Tesla, # 3 is taken care of. With the cheap satellite network they have via SpaceX, # 2 is taken care of. They can almost offer free music streaming in their car just as a value-added proposition, and not counting on the music streaming itself to be that profitable. This will allow them to undercut Spotify et al.