Amidst the doom, gloom and malaise of Australia’s retail sector, JB Hi-Fi has launched a beta version of its new music streaming service JB Hi-Fi NOW.

Subscription-based music services seem the logical way to listen to music. Why bother downloading and owning music if you can pay one subscription fee and access whatever music you want, whenever you want?

Like many seemingly obvious technological advances, the idea has been around for years but has been restricted by slow internet speeds. In many countries it is now taking off and, with the roll out of the national broadband network, Australia is likely to follow suit.

Will JB Hi-Fi be one of the winners? I set II Funds analyst Matt Ryan the task of checking it out (I’m not sure why but he seemed to appreciate his day listening to music more than testing out dental practices). Here are his thoughts:

The service is accessed through a webpage with no need to download an application for your desktop, and pleasingly I was actually able to start playing songs within a couple of minutes of loading the site. A mobile phone number is all that is required to start a 1 month free trial, no credit card details needed, and I didn’t have to waste any time filling in tedious forms or providing an email address to be relentlessly spammed with marketing.

The visual interface is quick and intuitive, though far from perfect, the fast forward and rewind buttons are too small for my liking, and the log-in is clumsy for use with more than one computer. The service enables you to stream but not download music, although you can create your own mixes and nominate tracks as ‘favourites’ (unfortunately you can’t ‘favourite’ entire albums at this point, have to do one track at a time). The beta has been launched only for desktop computers, however apps will be available for IPhone, IPad and Andriod devices soon, apparently these will allow caching so that you can avoid huge fees for data services, and also play music in areas with no network coverage.

The range of music is good but certainly not comprehensive, no difficulty finding The Rolling Stones or Elvis Presley, but The Beatles are noticeably absent, Australia bands Spiderbait and The Whitlams were available, but LA Style’s James Brown is Dead is missing as was Jump by Kriss Kross. Not being an expert on acoustics, I found the sound quality to be fine for my enjoyment.

When the full service is released subscription will cost $80 per year, and each user can use the service on up to 4 devices (computer/mobile/tablet). From the point of view of someone who hasn’t bought a CD or record in over five years, and refuses to purchase music from ITunes, I actually found JB Hi-Fi’s service to be a very good offering. In fact, if given only the choice between purchasing music online or in a store, listening to the radio, or subscribing to JB Hi-Fi NOW, I would definitely be willing to spend the $80 to subscribe.

I had a look around, though and there are plenty of global competitors: Grooveshark, Spotify, Sony Music Unlimited/Qriocity, Samsung Music Hub, and Rdio to name a few. And then there are potential competitors. Apple, which receives around $US6 billion in music revenues annually through ITunes, may be positioning itself to introduce subscription based music streaming through ICloud, and with its current dominance of the smart phone and tablet categories, Apple may well have the ability to crush the competition.

On the other hand music licenses tend to be negotiated country by country, and JB Hi-Fi has stolen the march on one of the current market leaders Spotify which is yet to launch in Australia, and another Grooveshark is caught-up in copyright controversy and its app is currently banned from Apple devices. By being the first to launch a solid product at a reasonable annual price, JB Hi-Fi may have given itself a chance to succeed.

Perhaps. But I doubt it’s going to add anything meaningful to JB’s $3bn-odd in annual turnover. They might be able to grab some early mover advantages, particularly the local copyright laws that make it difficult for the existing players to get established here. The product at the moment, though, is one that will only be interesting to early adopters. The landscape is set up to be dominated by global players like Amazon, Apple and Sony or established players with large amounts of existing revenue. By the time streaming goes mainstream in Australia and the services are user-friendly, JB Hi-Fi NOW will be a small time player at best.