The head still matters in a long-tailed market

Microsoft is ending its exclusive deal with MSNBC for local and non-US news. Jupiter found in our Future of News report that is the breakaway leader in US national and international news, and clearly a big part of the reason for this is the distribution that Microsoft is able to give it.
There are a couple of lessons here. One is the continuing primacy of distribution over content on the net in general and the Web in particular. Content is still staggeringly important, but there are still precious few outlets with the distribution to provide the the economies of scale necessary for worldwide news coverage. Call it the “small head” of the long-tailed market.
The second lesson is that there is little synergy between content and distribution. It’s better to the able to shop for the best deal on content than it is to be bound to a news-collection network. Remember: Wal-Mart doesn’t make anything. They use their distibution power to shop around and force their prospective suppliers to figure out how to cut costs. I’m not arguing that content producers wouldn’t like to own their distribution, but that if you separate the content and the distribution, the value of the parts will be greater than that of the merged business.
The third lesson is that we will see fewer comprehensive sources of national and international news over time. Headline news is increasingly a commodity, and in the future will continue to need Microsoft more than Microsoft needs
Originally published on my blog at JupiterResearch.