The “Sort-Of Paywall” is Smarter than a Real Paywall. Notes On Differentiation and Hey, How About Doing Something Original for Each Format? has secretly replaced its magazine articles (Folgers crystals style) with links to the iTunes App Store.

Want to read this week’s Time? All seven of you will need to go to the iTunes App Store and pick it up for $4.99 a pop. (Obligatory newsweekly cheap shot! Yeah!)

Actually, Time Inc.’s strategy is brilliant. It’s also not really new. People magazine and have been separating the print peanut butter from the web chocolate for nearly three years. I worked at from 2002-2008, and it was around 2007 that folks first started repeating the word “differentiation.” Differentiation! So magical! That is: Keep the content where it originated, and where it will be most valuable. The magazine’s articles (and, more critically, its exclusive photos) should not appear on the website, and “the dotcom” should be challenged to develop its own voice and its own original content.

Yes, there was grumbling on the web side (“Seriously? We only get ONE Angelina baby photo? And it’s from the cover?!?”), but it had to happen. Earlier in my tenure, we had experimented with putting nearly *everything* from the magazine on the site. But soon, I was hearing from gossip-loving friends that they stopped subscribing to the magazine because they had already seen everything online. People do notice these things — a Mario Lopez scoop only lives once. And despite the rise of competition like Perez Hilton and TMZ, the magazine could offer gems that folks wouldn’t see anywhere else — like, say, Valerie Bertinelli in a bikini or Melissa Joan Hart in a bikini, or Victoria Principal in some sort of safari-print unitard. Or whatever. still relied on many of the same writers and reporters, but both decided to try to excel at what they did best. did breaking news, party reporting, sightings, video. The magazine did bigger features and exclusives. To this day, you won’t see magazine content on until weeks after it’s off the newsstands. (See, despite sagging sales for all magazines, People still makes a TON of money on newsstands. That’s Walmart and Target for you.)

And here’s why I don’t understand the derision and knee-jerk bellyaching from some tech/new media/social media/media media bloggers about Time’s latest decision: Traditional publishers are going to finally stop propping up their web presence with repurposed content that they think they can sell elsewhere. Is that so bad? For the “open web” to keep thriving, content creators will need a business that exists on its own, with no training wheels or help from mom and dad. And we’ll soon see what the browser-based web can actually support.

Meanwhile, the next challenge for will be this: It needs to keep pushing to figure out what it wants to be, other than a magazine’s website with blogs. Is it all about breaking news? This seems to be how they’re positioning it, but it’s going to be tougher than it was just three years ago, given Twitter’s domination of real-time.

The next challenge for Time Magazine will be: Find out how many people will actually buy magazine apps at $4.99 a pop. Then, while they’re at it, maybe they can create something original and interesting for the tablet format. The new medium does demand something new.

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