Well it doesn't sound good, but I feel it has nothing to do with bitrate as it still sounds bad playing lossless from our NAS library.
We just received the new Play:5 at the end of last week and set it up in anticipation of being able to use Apple Music. I was actually rather shocked at how poor it sounds, it isn't as good as our ancient Apple Hi-Fi, and it is not even in the same league as the B&W MM-1 we use on our desktop.
The Sonos has a sort of boomy, muddy heavily DSP'ed sound that I would liken to listening to what your neighbors are playing by pressing your ear to the wall. Passages from well known songs are often unrecognizable.
Anyways quite a disappointment. We are now thinking about something like the B&W A7 or A5.