There’s good news and maybe even better news in the e-reader space this week. And both come from the announcement that Tina Brown’s Daily Beast is getting into the book business with a plan to launch original digital titles on her site, followed by paperback distribution through Perseus Books.

The good news is that this is exactly what digital publishing needs to fuel its growth: a product ideally suited to a new technology. Brown’s entry into the field validates the idea of writing specifically for the Kindle and its competitors, a huge vote of confidence in the tools. The less-great news is that for all of Brown’s talent for attention-getting, the Daily Beast may not have the right content to drive sales. Which just might be the point of the whole deal—with Brown using the book deal as a back door to better content.

Once Amazon (AMZN) combined e-ink screens with wireless connectivity, the publishing game was open to change. But so far no one has created a must-have product for a digital reader alone—especially not the newspapers with most to gain. For a big news organization, the base of digital readers is still too small to attract this effort. The devices are like shiny new toys that don’t come with batteries. You can admire them but you’re not getting the full fun effect.

That leaves the field wide open for Brown and her plan to create content that is too long for daily journalism—for either a newspaper or an easy read on a PC—and too short to be launched on its own as a book. With around 800,000 unique users a month and Brown’s flair for promotion, the Daily Beast would seem like a powerful catapult for these titles.

Once they gain momentum, Perseus, the underdog publishing house with a real need for products, will release the books to stores. (What the announcement in the Times doesn’t say is that if Perseus is smart, it will be able to let a title die if the digital edition doesn’t catch on.) Details of the arrangement are sparse, but Perseus is paying the Daily Beast an advance against its editorial work. This advance will be recouped across the three to five titles the company publishes next year. Authors will receive an advance of less than $50,000 from Perseus for book projects that should take no more than three months to write. (Not a bad gig if you’re a writer.) The Daily Beast publishes some part of the ebook and promotes the rest. The deal still leaves open the question of whether the ebooks will be sold from the site itself, which is probably a way to stay neutral in the fight between Amazon and Barnes & Noble (BKS). If the project takes off, writer, publisher, and Web site will split the profits in a manner Perseus CEO David Steinberger says will be in the author’s favor compared with traditional publishing.

It’s a win-win-win for everyone. Readers get new opportunities to learn about fascinating subjects without having to wait months or years for publishers to release the books, writers get more opportunities to write, and the Daily Beast opens a potential revenue spigot in an advertising-starved world. And it’s exactly what the publishing business needs. The publisher gets field-tested content with powerful publicity air-cover and a limit on production and distribution costs.

The other good news in the Daily Beast deal is that Tina Brown has a proven track record with books. For all of her fame as a temperature-taking magazine editor, Brown’s only durable success in creating profits for her employers has been in the book industry. Talk Books—the publishing arm of her Talk Magazine multimedia experiment—was the defining success of the book business in the early part of the aughts.

Like Judith Regan and Regnery Publishing, Talk was able to find books that were their own news events. Take Ice Bound, the story of the woman scientist trapped in Antarctica battling breast cancer. Landing her was a booker’s dream and a lasting testament to the power of the cable news “get.” Brown rode the crest of the books-and-television wave. Publishing is not a mass medium, but it became an essential ingredient around the turn of the century in fueling the growth of cable talk shows on which minor personalities provided cheap and lurid content. The publicity echo drove book sales to everyone’s profit.

That brings us to the not-so-good news about the Daily Beast’s book launcher. The competitive advantage that digital readers provide is in distribution, not packaging or presentation. An e-book is a book stripped down to its essence, words and ideas. To drive sales, it must be a great piece of writing or contain sensational new facts that cannot be easily summarized. It will need to be an emotionally charged experience that creates intimacy and immediacy.

Some of Talk’s books did that. But not a lot of what has been published on the Daily Beast fits into that category. The site has been a triumph of design and news aggregation. It’s quick, topical, and image-driven, with lots of lists and video clips. But what the Daily Beast lacks is great writers and writing. That’s not a slam on Brown. She’s driving traffic and doing it cheaper than she’s ever done before.

But if the site wants to pioneer a new format, it will need to discover new must-read talent. The program’s first announced title, Attack of the Wingnuts by CNN commentator John P. Avlon, could be a breakthrough hit. But it doesn’t look so promising on the face of it.

Then, again, the not-so-good news could turn out to be much better news if you argue it from the other way around: The Perseus deal could end up as a brilliant tactic on Brown’s part to get better editorial content without having to pay for it. Using Perseus’s money, she’s paying top dollars for journalism again—but it doesn’t come from her budget. Tina gets to be Tina and save money, too. So there’s a good chance the news coverage, like that it’s already gotten this week, will help attract and underwrite journalism projects for the site—another great example of Brown working the system with savvy.

And if the deal succeeds, it could dramatically advance the cause of e-content. The Atlantic and The New Yorker are two powerhouse entities slowly breaking free of the concept that they are simply magazines and morphing into generators of material that can be presented and monetized in different ways. The Atlantic has expanded its magazine into a matrix of Web sites, and The New Yorker, which seeds more books than most other media organizations on a pound-for-pound basis, has thrown itself into producing semiannual festivals. Book distribution is a copy-cat business. The Daily Beast deal should be enough to goad one of the six big publishing houses to work a similar arrangement with either the Atlantic or The New Yorker, whether it works or not.

By reversing the old media formula, in which magazines pay writers to develop ideas that might be exploited as books, Brown is setting up a new financial model. Web sites provide editorial insight and a test-bed for ideas. Publishers fund the writer’s work. One could easily see an arrangement like this working well with other older sites like, say, Slate or even for more established news organizations. But there’s no reason it has to remain—or even be—high-minded. There’s a wide-range of practical content coming out of fashion and enthusiast magazines and Web sites that might easily be adapted to this model, too. Book publishers have already fallen over themselves to bid up blog-to-book projects. Why not reduce the risk with the bigger content producers?

If it works, book publishers could begin to outsource their editorial departments. As heretical as this sounds, that’s the only hope for publishers. Editorial costs in the form of overpaid advances are crushing them. Offload the editors to a Web site and you’ve got fewer people wanting to spend your money. With a fixed fee structure up front and back-end participation for everyone, writers are sharing the same risk as the Web site (or magazine) and publisher. Yes, there are ways to abuse this system. But with determined dealmaking and a few good lawyers, there’s the beginnings of a business model that might help deliver old media and new. Who would have thought that Tina Brown would come up with an idea that could end up saving everyone money?