Yes, it does. Maybe you should put it pretty much like that. Your idea is stated far more effectively in your explanation than in your original sentence.
Instead of “agglomeration,” you might speak of a population or of the size of a prospective audience.
Having a widespread prospective audience might not be the obstacle to popularity, though, just to comment on the thought. The mail goes all over the U.S. But it might be an obstacle to promotion—to reaching that prospective audience and attracting them as subscribers or customers.
Something still can’t be conducive to a market. A market is not an action or state. Try substituting the definition in the sentence and you’ll see what I mean:
The Internet is more tending to produce to niche markets than the medium of print.
The Internet is more conducing to niche markets than the medium of print.
The Internet is more contributive to niche markets than the medium of print.
The Internet is more helpful to niche markets than the medium of print.
The Internet is more favorable to niche markets than the medium of print.
(You should be able to do this with any well-formed definition; it should always be substitutable for the term, though sometimes requiring slight rearrangement of the expression.)
You are not talking about being more helpful or favorable to the market. You are talking about be more helpful or favorable to reaching or serving or attracting or developing the market, correct? So you need another word in there.