When you get a business to a certain size, you are able to get resources cheaper and grow faster. In my experience that has certainly been the case with Internet Radio.

Building DI.fm and SKY.fm as a network of many channels we own eventually brought certain benefits to the table.

We get more exposure and recognition in certain spheres, our costs of doing business are often more optimized, some processes are more streamlined.

Not to mention, we can actually be profitable or break even by leveraging “the package”, while most independent net radio outfits cannot do so with just one or two channels.

Likewise, seeding new channels with attention is easier, since we can expose it on our network at launch time.

Some of these Network benefits are the result of marketing yourself as a bigger service. But you can either really be “bigger,” or make it look like you are bigger.

Network Associations

So how do you make yourself look bigger if you are into Internet Radio? I have seen a trend where some channel operators decide to partner with other channel operators in a sort of a cartel.

They bunch themselves up in a bigger group, attribute a new name to the group, and market is as a “bigger” service.

Sometimes the participating parties agree to do this in unison and collaborate to make the group perform as one. But often it’s just one of the involved parties that sees the grand plan, and makes some kind of a promised offer to others to come “join the ranks.”

Now, the “bigger” group can add up their stats and tout a more impressive metrics total.

The group can also offer a “package” of channels, where as before it was only one or two channels.

This association can also sign on more deals (be it advertising or unique partnerships) by pitching themselves as the new emerging leader to be, given their recent “growth velocity”.

How Associations are like Subleases

The method can work well, depending on who manages it. But the bigger the set of participating parties, the more is the danger of the whole thing falling apart.

If you have a Sublease, as opposed to a rent contract, chances are you are using up space that you might have to vacate with almost no notice. That is, you can be doing business or living in the space, completely getting cozy, only in one quick moment to be told the main renter has other plans and you need to move out.

These virtual groups of Internet radio stations are similar. I’ve seen a few fall apart partially and fully over the last few years. I still see new ones forming too. What typically happens is that one party gets tired, or feels screwed by the other, and leaves.

Once one breaks off, it typically takes a third or a half of the audience that comprised the network away. And one split is usually enough to get the rats jumping from the ship, in the long run anyway.

In one shot you get the group splintered, and that’s pretty much it. Then the bigger brand suffers as listeners get confused, or the two splintered groups both try to claim ownership to the name.

Another reason why this is really a dead end is just because you make it look like a coherent group, doesn’t mean it works as one behind the scenes.

Often there’s no common strategy, no common quality of service, no common standards, or even common representation from all parts of this “organization.” You get the case of the left hand not knowing what the right hand is doing.

Lessons to Keep in Mind

So the next time you’re doing business with a media service online, you might want to double check that they own, as oppose to rent or sublease all of their assets. Especially if you are considering investing into one!

If they do have their own, chances are they will not splinter on you in one second. It also means that they truly have control to make changes across their whole platform.

Let’s Not Forget The Talent

The one thing nobody can truly control in the long run is the talent in all of this. They are the people that make the magic happen. Whether you own the channel legally, or agreed to partner with someone else temporarily, it doesn’t matter if the channel programmer decides to go his or her own way.

Good luck getting a worthy “replacement”! This is why buying out doesn’t always help either, not if the employees themselves all jump ship.