Tesla & Slacker: A Bad Deal
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Slacker is the music streaming service that Tesla offers on its North American fleet of cars. It is the same service in which the majority would love to see replaced with Spotify, Google Play Music or Apple Music. It was one of the highest voted in the Elon Musk Twitter improvement tweets. Slacker's song library is somewhere around 13 million songs vs the 30-40 million for Spotify.
So why has Tesla not changed Slacker to spotify seeing as they have the code already done for the European fleet of cars? It has been long rumoured that Tesla signed a contract so they are forced to continue to use Slacker on all of their north american cars.
With that information out of the way, I will get to the main point of this video; Tesla and Slacker was a bad deal. I say this from a financial standpoint.
LiveXLive is the parent company for Slacker. In their most recent S.E.C filing, their total revenue was 7.9 million. They include these notes:
“The Company has one external customer that accounts for more than 10% of its revenue, which is an OEM. The OEM provides premium Slacker service in all of their new vehicles. In the three and six months ended September 30, 2018, total revenue from the OEM was $2.9 million and $5.1 million, respectively.”
Deduct all the cars outside the US that have Spotify. If Tesla has sold roughly 200,000 vehicles, and pays on average 850k/month for the slacker subs that's roughly $4.25 per month per car. The subscription that Tesla cars recieve is similar to the feature set to Slackers $5 per month plan.
Tesla is not saving that much money per car, especially when you consider they account for 37% of all of Slackers revenue. I think a lot of this stems from the fact that Spotify launched right after the Model S announcement as well as Tesla not thinking they would sell a couple of 100 thousand cars during the span of the contract.
When will the contract end? Your guess is as good as mine. I do know that I would love to see more music streaming options in the future.
What do you think?
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Other Videos:
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Article: https://arstechnica.com/cars/2018/07/tesla-sold-200000-cars-in-the-us-so-the-7500-tax-credit-is-going-away/