How does Spotify get such a big online music streaming library?

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Or maybe better: how does online music streaming work? I have absolutely no clue how they get about every song in the world available to be streamed online. And how does it get updated every day? To they like "crawl" websites, just like Google, but then for songs?

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Spotify negotiates with the 4 major record labels, Universal Music, Sony Music, EMI, and Warner Music to license music so that they can stream it. Record labels want to make money called royalties each time their songs are played on a commercial broadcast or venue. As record labels own the copyright to the songs they have, they are in a legal position to negotiate in this way instead of the artists.

The record labels tell Spotify how much money they want per every song stream, and Spotify has to accept the agreement or not have that label's music. Record labels also have streaming rules that dictate that because Spotify is an on-demand service and not a radio service like Pandora, that it gets set different royalty rates, which you can imagine will be more expensive.

Pandora is a small company that cannot afford to let users skip more than 3 songs in an hour, because they want to qualify for being an online radio service as that's cheaper. Legal music streaming on demand services We7 (free) and Deezer (paid) have less music.

The real reason why Spotify has loads of music on it that you can listen to at any time, is because Sony Music is a shareholder that owns a percentage of Spotify, so as the service is backed by record labels themselves, they are incentivised and determined to have the legal music streaming service succeed.