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Tesla is talking to the music labels about creating its own streaming service

  • Music industry sources say the carmaker has had talks with all of the major labels about licensing a proprietary music service.
  • Label sources aren't clear about the full scope of Tesla's ambitions, but believe it is interested in offering multiple tiers of service, starting with a Pandora-like web radio offering.

Put this one in the "You can do that, but why would you want to do that?" file: Tesla is talking to the music industry about creating its own streaming music service.

Music industry sources say the carmaker 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.

Label sources aren't clear about the full scope of Tesla's ambitions, but believe it is interested in offering multiple tiers of service, starting with a Pandora-like web radio offering.

The bigger question: Why doesn't Tesla simply integrate existing services, like Spotify or Apple Music, into all of its cars from the start — especially since Tesla already does a deal with Spotify for Teslas sold outside the U.S.?

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"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," a Tesla spokesperson said. "Our goal is to simply achieve maximum happiness for our customers."

But if Tesla does want to provide music to its customers — it delivered over 100,000 cars in January and taken 400,000 pre-orders for the Model 3, due out this summer — the labels are happy to sell their stuff to the company.

It would like as many customers as possible, and it doesn't want to end up in a world dominated by a handful of streaming outlets. Right now, Spotify and Apple have the clear lead: Spotify says it has at least 50 million paying subscribers for its service, and Apple says it has 27 million.

By Peter Kafka, Recode.net.

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