Joining the ranks of Spotify, Apple Music, and the like, Tesla is in talks to start its own streaming service. Labels' deals with the Cupertino tech giant will expire at the end of June. Meanwhile Universal Music Group and Warner Music Group didn't immediately respond to requests for comment. However, now that Apple Music has been live for two years, and hasn't been as harmful to iTunes as expected, record labels are now warming up to the idea, albeit with reservations, the report adds. By comparison, Apple's primary competitor, Spotify, has about 50 million paid subscribers with a total of 140 million active users when factoring in the company's free, ad-supported tier. In recent negotiation talks, Spotify reduced its rates from 55% to 52%. Slacker has previously stated that Tesla owners stream 2-3 times as much music as other customers, sometimes streaming over 100 hours per month.
The premium was also a product of Apple's eagerness to get along with an industry that has sometimes blamed it for accelerating the downfall of CD sales, once the industry's largest source of revenue.
Streaming music in a Tesla. However, according to the RIAA, they still make up 24% of all music revenue here in the States. The labels are open to a reduction in Apple's rate - provided it's also able to expand subscriber rolls and meet other requirements, the people said.
So far, Spotify has only managed to lower their royalty payments with UMG.
Tesla CEO Elon Musk has been hinting at Tesla having its own music streaming service recently, but now it looks like it's something that the company is actively working toward. The Swedish streamer has yet to initiate negotiations with Sony Music. Those figures could help to improve Apple's bargaining power, even if they still fall well short of what Spotify has achieved.