Quit Huffing at Time’s Paywall. It’s Smart.

There’s been a bit of huffy finger-pointing now thatTime has embarked on a truly sensible Web strategythat emphasizes the original content on Time.com and keeps the content from the magazine exclusive to the magazine and iPad app.

Why is this so sensible? In the first instance, the overall direction of content is toward finding the appropriate delivery mechanism for news, opinion, and argumentation. With the success of the iPad and widespread emergence of smartphones, we now have a landscape content producers can navigate.

Time is right to want to segment its content in ways that optimize their value. In other words, it’s smart to produce content that is appropriate to each delivery channel that makes the most of the advertising opportunities available.

Instead of being surprised or disappointed that Time has removed the magazine content from the Web, we should ask why it was ever available there in the first place. The answer is because it was the cheapest way to generate Web traffic. Only now, that traffic does harm to the magazine’s franchise.

But with the iPad, Time can offer subscribers and advertisers magazine content while producing Web content at a lower price. Each channel is getting mature enough to support a predictable cost structure.

Yes, this does bring us back to the two-tiered publishing world of 2005 when no self-respecting writer wanted to be on the Web. But that’s partly because Time is really the wrong vehicle to pursue this strategy.

The organizations that would benefit more from the Time strategy are newspapers and magazines with a distinctive niche or world view. Wired comes quickly to mind. New York magazine has shown that you can have your Internet cake and eat your feature well, too. (It would be very smart of New York to follow Time down this road and keep its features off the Web. Though it would have to have an iPad app to do that.)  Several lifestyle magazines ought to be able to make some something out of this three-tiered structure of Web, mobile, and iPad/print.

At TBM‘s Untethered conference on profitable media in the tablet era, Conde Nast’s Sarah Chubb made the point that Conde wants to own its readers, however they choose to access content. Indeed, this is what everyone says they want to do. And Time, Inc. is clearly taking some steps toward that by segmenting its content. The next step for Time is to figure out what it can send to mobile customers that resonates with its brand.

Obviously, when you’re dealing with content there’s overlap. As we move further into a tri-partite media world, everyone will have to create their own Chinese menu of information services. Some readers will want only one or two of these options.

If all readers are using all three, your strategy will have undershot the audience. The point is to make it easier to bring peripheral readers into the brand fold. Quick data and images will do well on both the Web and on handhelds. Some readers will be happy to access longer-form stories on the smartphones as well as a tablet or in print.

But owning the reader means more than just preserving the value of your print ads. It means finding different types of content to give the reader so they identify with the brand. Magazines have been dealing with this issue for more than a generation. Before the Internet was a credible threat, magazine editors and designers were looking for ways to create multiple points of entry to the magazine.

They tried all sorts of innovations to generate more ads against content in the front of the book. That gave birth to charticles and clever photo-based featurettes. Going forward, editors are just going to have to apply the same sort of ingenuity toward different devices and distribution channels. We’ve already seen some magazines do very good jobs of playing their content off the different media available.

Unfortunately, having two distribution channels doesn’t change the way that Time is trapped in the No Man’s Land of the news cycle. The organizations that would benefit more from the Time strategy are newspapers and magazines with a distinctive niche or world view. Thomson Reuters buyingNewsweek would make a great deal of sense in this context.

Sometime in the future, we may look back on the summer of 2010 and identify Time‘s move as a milestone in the evolution of news organizations.