With HTML5 we could use Ogg Vorbis, or the almighty new Ogg opus which would be spot on perfect for this kind of usage.
I am aware that there are things that allow this such as external players, Jamstash etc but to have such functionality integrated would be far better IMO.
I've seen the other thread titled HTML5 audio. It links to Scotts-media-streamer which I have tested. It works great without flash. It even played Wave! But its very light and a lot has been removed. Even theming so its a horrible bright burn your retina interface.
I would have posted there but its been nearly a year and a half. Is HTML5 in the works? I whole heatedly recommend it if not, the gains would be tremendous.
EDIT:
Just saw TODO List 5.1
Upgrade JWPlayer to http://mediaelementjs.com ?
This is exactly what I think would be perfect. Consider this a +1 of that.