During his presentation at paidContent2010, Forrester analyst James McQuivey predicted access models would flourish but content providers will get squeezed during the process. Since the music industry is getting desperate to find a workable access model, the ten-slide PowerPoint deck provides some good food for thought.

People will continue to pay for access to content, says McQuivey, but whoever controls access will command the highest share of revenue. That has certainly been the case in digital music. Apple may have just sold its 10 billionth music download, but the revenue and profit it has generated through the sale of iPods dwarfs what has been made from music downloads by Apple, record labels, distributors, recording artists and songwriters put together.

Newspapers will face their transition to new access models before record labels. McQuivey believes many newspapers will follow the New York Times’ lead and charge for content. Most, he predicts, will fail. The Financial Times will not only charge for content but will eventually move to micropayments for its content. On Monday, John Ridding, the company’s CEO, told an audience at the Financial Times’ Digital Media & Broadcasting conference that micropayments, when done right, can support a subscription model. “Micropayment simply isn’t going to work if you go to an article and you spend quarter of an hour filling out forms and ticking boxes,” Ridding said. He added that both a day pass and weekly pass will be powered by PayPal.

Back to McQuivey’s presentation. By the end, he was confusing advertising-led models (radio, television, newspapers) with loss leader pricing of CDs at Walmart (which is hardly a subsidy to producers). Nevertheless, McQuivey’s main point should be noted: less money will be available to fund content production. Thus, he says, “competition among content producers is going to be fierce.”

If the total pie is shrinking rather than growing, there is more incentive to fight for market share. On the other hand, less content production at the major label level will only push a portion of production to the indie level or artists will produce independently. As the cost of production decreases, the incentive to produce will increase.