Spotify should adopt the newly standardized Opus codec (IETF standard RFC6716) Its pretty much superior to all other audio codecs out there. Here is their comparison site: Comparison.
A snippet from their site:
Opus is a totally open, royalty-free, highly versatile audio codec
Opus can handle a wide range of audio applications, including Voice over IP, videoconferencing, in-game chat, and even remote live music performances. It can scale from low bit-rate narrowband speech to very high quality stereo music
Bit-rates from 6 kb/s to 510 kb/s
Sampling rates from 8 kHz (narrowband) to 48 kHz (fullband)
Frame sizes from 2.5 ms to 60 ms
Support for both constant bit-rate (CBR) and variable bit-rate (VBR)
Audio bandwidth from narrowband to full-band
Support for speech and music
Support for mono and stereo
Support for up to 255 channels (multistream frames)
Dynamically adjustable bitrate, audio bandwidth, and frame size
Good loss robustness and packet loss concealment (PLC)
Floating point and fixed-point implementation
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