Spotify’s nearly 200-page public offering registration statement seeking a direct listing on the New York Stock Exchange offers an illuminating view of the Swedish company’s past, present and potential future. The Daniel Ek-led streaming giant’s outlook is mostly rosy, if not downright flowery in language, but reality points to alienable risks — namely being reliant on four gatekeepers for access to nearly 90% of Spotify’s wares — and complications, not the least of which includes complex rights management systems in the U.S.

Speaking to Variety, YouTube Global Head of Music Lyor Cohen welcomed the arrival of SPOT to the NYSE. “YouTube and Spotify’s success in growing music subscriptions is extremely important for the industry,” says the executive. “More platforms mean more options for connecting artists and fans and more diversification of revenue, which benefits the industry as a whole. It’s a great time to be in music and the opportunity has never been brighter.”

Read on for eight takeaways from Spotify’s Feb. 28 filing:

Zero Control (read: the Taylor Factor)
Spotify isn’t the first company to build a business from licensed use of creative work, but is its reliance on the continued good will of record companies more of an albatross than a motivator? “We have no control over the providers of our content, and our business may be adversely affected if our access to music is limited or delayed,” writes Spotify in its filing, outlining that “the concentration of control of content by our major providers means that even one entity, or a small number of entities working together, may unilaterally affect our access to music and other content.”

That entity could be a single artist. For instance, if Taylor Swift were to withhold her catalog from the service — again — it could send the stock tumbling on the open market, as Snapchat experienced recently when Kylie Jenner dismissed the service as passe in a tweet to her 24.5 million followers, and SNAP saw its market value lose more than $1.3 billion. SPOT, too, may be vulnerable to the whims of artists — an area in which most labels will not interfere or force an act to comply. At the same time, the companies representing the content owners — Universal Music Group, Sony Music Entertainment, Warner Music Group, and Merlin, representing indie labels  — who collectively account for 87% of the streams on Spotify, could unilaterally or individually allow licensing terms to lapse and force a renegotiation of rates or pull its catalog, inviting an inevitable class action suit claiming the company didn’t provide what it promised as part of its subscription fee.

That the industry has been buoyed by Spotify’s entry and dominance of the market, and what it’s meant for the labels’ bottom lines, is without question. But an unknown remains in Spotify’s forecast: how to sustain scale without ever having shown profit, and when the cost of licensing sound recordings stands to only go up? No wonder the word “risk” is used 167 times in Spotify’s filing.

Spotify Has its Eye on the World
With a presence in 61 countries, and plans to expand into additional key territories, Spotify uses its upward trajectory in “every region measured” and especially North America, Europe, Asia, and Latin America, to boast of not just transforming user behavior on its own ecosystem — which last measured 71 million premium paid subscribers and 159 million monthly active users (MAU) on its ad-supported tier — but of returning the music industry to solvency worldwide. “Spotify’s global streaming market share was approximately 42% in 2016 as determined by revenue, and we had market share of approximately 41%, 42%, and 59% in the U.S., Brazil, and United Kingdom, our three largest markets by MAUs, respectively,” writes the company.

The global outlook is in line with the recorded music industry’s own efforts to maximize reach beyond the former confines of borders, and if Spotify penetrates key markets in Asia, as it has already via its equity swap with China’s Tencent, its impact could indeed be universal, says Daniel Glass, founder and president of Glassnote Entertainment Group. “The potential for growth in countries like China, India and South America is incredible,” he tells Variety. ” The alliances with entities like [Chinese firm] Tencent are so smart. I believe it will be an incredibly profitable company.”

Adds Allen Kovac, CEO and founder of Tenth Street Entertainment and the Eleven Seven Music Group, who was an early investor in Spotify: “Daniel has been very smart in how he’s set the company up globally, with free and paid tiers. It’s not just the 70 million paid subscribers, but all those they’ve hooked. Instead of going for a quick profit, they went for scale, so they’re ahead of everyone globally.”

No Friend to Radio
As the lean-back experience of terrestrial radio competes in an on-demand world, Spotify sees an opportunity to gain entry into the $14 billion U.S. market as well as offer users, “a significantly better alternative to linear broadcasting.” In addition, Spotify cites better royalty payouts to artists and rights holders due to one key factor: Spotify obtains a mechanical license for songs on its service as well as public performance rights. “Terrestrial radio only pays royalties to songwriters, whereas we pay royalties to those songwriters, as well as recording artists” on both the ad-supported and premium service, reads the filing. However, radio holds a major advantage: its ubiquity in cars and free access.

“We are in the discovery business.”
Spotify believes that “if discovery drives delight, and delight drives engagement, and engagement drives discovery,” then it’s “in the discovery business.” Considering its catalog of 35 million-plus songs grows “by tens of thousands of new creative works every day,” curation becomes a vital component. But Spotify’s claim that it’s a creator of culture “by turning vast and intriguing listening data into compelling stories that remind people of the role music plays in their lives” could be an overreach if the service begins selling premium positioning on playlists and beyond. At what point does the curator become the peddler? In the music industry, it can be a fine line.

Churn, Churn, Churn
There’s good and bad to Spotify’s ARPU (average revenue per premium user) metrics. Although trending downward (to €5.24 per user in 2017, a decrease from €6.00 in 2016 and €7.06 in 2015), which the company attributes to discount offerings through family plans and the like, Spotify’s “Premium Churn” rate — the number of paid subscribers who abandom the service after use — is slowing. According to the filing, in Q4 of 2017, premium churn was 5.1%, down from 6.0% in the same quarter in 2016 and from 7.5% in the fourth quarter of 2015. It stands to reason that some of those kids or students participating in a discount plan will, in the coming years, become individual subscribers with their own accounts, bringing the churn rate down even more.

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The Spotify Product Line
Two slightly clearer paths to profitability could come in the form of advertising and analytics, “products” that Spotify could sell which, if scaled, could generate enough cash flow to cover the incomes of the engineering staff that make up more than 40% of Spotify’s workforce. The retail “end caps” of yesteryear, where labels paid for prime positioning and visibility at record stores, could easily be adapted for popular playlists and especially so on the free tier.

In addition, Spotify for Artists, providing user data and analytics with which an act can gain “a better and more thorough understanding of their fan base” by accessing demographic information, anonymized geographical locations, the number of real-time users, song performance and playlist data, and other insights. Through strategic partnerships with Ticketmaster, AXS and Eventbrite, Spotify has dipped its toe into live concerts, though not to a great extent. Still, the service notes, “many artists have used our analytics to inform tour locations in countries they otherwise would not have known.”

Efforts to expand into physical products and hardware, as reported in a recent Variety story, is not mentioned, however.

Strong in Song
Leave it to the Swedes, who are accustomed to feeling just a little left out of the mainland Europe party, if by geography alone, to pain a Utopian picture of the world’s cultures coming together as one in song. As Spotify states in a mission statement outlined midway through the filing: “This is the future we envision; where artists cross genres and cultural boundaries, creating ideas that propel society forward; where fans can discover something they never would have otherwise; where we’re all part of a global network, building new connections, sharing new ideas, across cultures. … We really do believe that we can improve the world, one song at a time.”

No phone, no salary, no problem.
Other interesting tidbits found in the filing: Spotify has no phone number, it states in identifying the address of its corporate office in Luxembourg and principal space in Stockholm; its data set, which gleans insight into user consumption, clocks in at some 200 petabytes (a million gigabytes.equal one petabyte), more than three times Netflix’s 60 petabytes; and Daniel Ek takes no salary for his role as Spotify CEO. Adds Daniel Glass: “Streaming is just scratching the surface. When it gets to the 100 million subscriber area, which is not far off, the consumer data and information, and the fan insights, will be even more powerful.”

With reporting by Roy Trakin