Tesla to End LiveOne Streaming Subsidies for Customers, Sending LiveOne Stock Down 23%

Music streaming company LiveOne will continue to have a relationship with auto manufacturer Tesla but with less advantageous terms. Starting in December, Tesla will no longer subsidize LiveOne products for some of its customers. 

For years, LiveOne’s relationship with Tesla has been a cornerstone of its music streaming business; Tesla vehicles sold in the U.S. with Tesla’s Premium Connectivity package included a membership to LiveOne’s Slacker Radio that was paid by the car maker. The “streaming” button on the Tesla console led drivers to the subsidized, LiveOne-powered streaming platform without needing to connect to the app through their smartphones.

Over the years, LiveOne remained a key streaming partner as the automaker added other streaming apps to its console. Now, LiveOne is losing its preferred status. Starting Tuesday (Oct. 1), Tesla replaced the “streaming” button with a LiveOne-branded app. Come December, LiveOne will no longer be free, although Tesla will continue to pay grandfathered LiveOne accounts in perpetuity.

While Tesla will no longer subsidize the streaming radio subscriptions, LiveOne will offer Tesla owners discounted LiveOne packages. “The conversion opportunity has enormous upside by offering Tesla owners an opportunity to upgrade and have access on all devices at discounted priority pricing,” LiveOne CEO Robert Ellin said in a statement. “We’ll drive growth, unlock new revenue streams, own our data, and increase ARPU.”

In the near term, however, the amended partnership will hurt LiveOne’s financials. In Tuesday’s announcement, LiveOne reduced its guidance for consolidated fiscal 2025 revenue to $120 million to $135 million from $140 million to $155 million. At the midpoints, the change represents a 13.6% decline. Also, LiveOne lowered guidance for earnings before interest, taxes, depreciation and amortization to $8 million to $15 million from a range of $16 million to $20 million — a 36% decline at the midpoints. 

The news sent LiveOne shares down as much as 32.6% to $0.64 before closing at $0.73, marking a 23.1% decline from the prior day’s closing price. Combined with LiveOne’s 23.2% drop in share price last week and Monday’s 10.5% decline, the stock has lost 47% in just the last seven trading days. 

Tesla’s paid members increased 15 times since LiveOne acquired Slacker in 2017, according to a LiveOne investor presentation from March. LiveOne’s management is focused on establishing new business-to-business and has been in discussions with 50 potential partners, according to the document.