Maghound, Time Inc.’s new magazine subscription service, is not a “Netflix for magazines.” But it still has potential.

Maghound isn’t just Time Inc.’s goodwill gesture to save the magazine industry. It’s also a serious effort to rescue the company’s fading flagships. During the last three years, Time Inc.—the publishing arm of Time Warner Inc.—has had flat revenue returns, and advertising is down this year. This ownership dynamic raises all sorts of tricky conflicts of interest, though. Imagine if Netflix were owned and operated by a single movie studio (more about this later).

Ventresca says that Maghound is its own subsidiary with its own bottom line to worry about. But synergy is not a forbidden word around the Maghound offices. Maghound exists to help sell Time Inc. magazines, plain and simple. Sure, it’s also there to hawk other subscriptions, but as Ventresca said, “In a jump-ball situation, Time Inc. titles might get favor over an outside title.” That’s a gentle interpretation; Time is Yao Ming to the competition’s Muggsy Bogues.

He added that they’ll make decisions based on what’s best for Maghound’s bottom line, not Time’s. Of course, what’s best for Time’s bottom line is usually best for Maghound’s. Selling other publishers’ magazines nets Maghound (and Time) a service fee that the other publisher will fork over. Selling a Time Inc. property nets Maghound the service fee and Time Inc. the magazine sales. Unless another company has a huge seller, Maghound will likely try to maximize the margins and maximize Time Inc.’s footprint. Shrewd nepotism is shrewd business. (For an example of this model, visit Hulu, NBC and Fox’s joint venture for Web video.)