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My experience is that Spotify's audio quality vs file sizes (downloaded) is much superior to Google Music, which I migrated from. I suspect this is due to Google using MP3, whereas Spotify uses Ogg Vorbis; my personal experience is that Normal quality on Spotify is quite a bit better than Google's High setting. Listening to a song streamed over mobile using Google on Low has a very noticeable degradation in audio quality, whereas it is not as significant on Spotify on Automatic Quality. Tracks with lots of bass suffer terribly on Google Music on Low qualty, I would not consider it acceptable.
I find it difficult to discern a quality difference between High and Extreme quality on Spotify. It may be down to the tracks I test with and the equipment used as well.
My Spotify seems to be caching songs as it streams them. You can see this in the Win10 App where you can specify the download and cache folders and the folder size grows as you play music.Same. I just miss the automagic caching. Gotten quite used to start a playlist and walk to work listening without having to download it. That and changing the volume on a remote phone.