The deal, announced Wednesday at a press event in New York City, signals growing acceptance of a medium that has been widely derided as unfair to artists by both musicians and what's left of the music industry.
(Read more: Spotify on charm offensive after royalty payouts slammed )
Spotify also announced more services for its freemium mobile users.
The company will now give tablet users the same freemium service they were previously only allowed on desktop, Spotify's CEO Daniel Ek said at the event. Ek also announced that Android and iOS smartphone users would also have access to a new kind of Shuffle service.
"We don't want to make another radio type service, we want to make something really great," Ek said.
Shuffle enables nonpaying users to get more access to the music they want to hear by allowing free streaming of an artist's entire catalog in random order with commercials.
Before this function was introduced, free users would select an artist to listen to, and they would get some of their songs streamed, but also songs similar artists, Ek said.
Ek also said with more free services coming to mobile, the company is also experimenting with ways to advertise including native advertising and location based ads.
-By CNBC's Cadie Thompson. Follow her on Twitter @CadieThompson .