Streaming music service Rdio today announced that it will upgrade its entire library of music to AAC audio files, which offer a higher quality of sound than MP3.

The move marks the first time Rdio is giving users more control over the sound quality while listening to songs on mobile devices as well as desktops and home audio systems. In this case, Rdio is giving users four different options for sound quality, which can be adjusted to fit your preference based on your device and Internet connection. Paid users can even specify what quality they want downloaded tracks to have for offline listening, too.

Streaming audio quality can range in bit rates between 64 Kbps to 320 Kbps, and Rdio will now be offering that 320 Kbps quality AAC files to those who subscribe to its $10 monthly premium service. But Rdio CEO Anthony Bay told VentureBeat that all users will benefit from the switch from MP3 to ACC audio files.

“The biggest things customers have been asking for over the years have been higher quality audio and … better use of data,” Bay said. “By moving to AAC at lower bitrates we’re able to deliver a higher quality audio experience using less data.”

Rdio will now offer 64 Kbps AAC streaming (96 Kbps AAC by default), rather than the 96 Kbps MP3 streaming it previously had without sacrificing quality, which Bay told me will reduce the data consumption by a third and be a huge benefit to the many markets Rdio serves outside the US.

One of the main criticisms for high-quality audio streaming is that most people don’t actually have good enough speakers to hear the difference in sound quality. On top of that, most people also don’t even realize this, which is why low-quality streaming music has been widely accepted up until now.

“Like many things, this is an educational opportunity,” Bay said, adding that over time more people will become aware of what higher and lower sound quality means now that the controls are front and center. “Rdio provides a lot of customizations to our users. Not everyone takes advantage of that, but those that do really appreciate it.”

The upgrade in audio quality also brings about a new initiative for Rdio in the form of a partnership with legendary Grateful Dead member Bob Weir, who is also well known for advocating better audio quality for streaming and digital music. To kick off the upgrade to AAC, Rdio is getting an exclusive catalog of tracks from Weir’s TRI Studios, which will feature music from Weir, Sammy Hagar, Dave Schools, and many others.

“One of the frustrations Bob, and I think many other musicians as well, had in the move to streaming in many cases is audio quality is sacrificed,” Bay said. “So we’ve started this new initiative to get musicians to focus on higher-quality content on streaming. We’ve got a crop of well-known artists who are joining us to try to raise the bar.”