I recently did a Q&A piece with the editor of the KnowGenesis International Journal for Technical Communication about a range of opportunities and challenges that lay ahead for the digital media industry.

The editor, Saurabh Kudesia, posed some very interesting questions, and I thought I would summarise some of the issues the piece covered.

The starting point was an overview of the key issues facing the digital media industry. My take was that these fell into 5 broad categories:

(i) Technological – A key challenge in this sector remains technological. There is an ever expanding landscape of electronic devices (from PCs, to PDAs, to mobile platforms, to emerging device categories such as rich-media enabled GPS systems and the Chumby).

Each platform brings opportunities to deliver innovative content experiences. However, they also create layers of complexity as a result of the lack of standards around media formats, encoding and audience measurement.

(ii) Economic – There is a paucity of proven revenue models, and this is likely to remain for many years to come. Each different channel requires you to adjust your business model, which in turn means you need to tweak your revenue model.

(iii) Cultural – We are still very early in the process of identifying and understanding ‘digital culture’. Much of what passes for ‘accepted wisdom’ in this area are actually incorrect assumptions and biases that have been brought from other media sectors (in particular, broadcast media). This explains why so many digital content projects fail to live up to expectations – because the mindset that underpinned their genesis is actually using old paradigms that are not particularly appropriate for digital channels.

(iv) Legal – Legal issues associated with copyright infringement are very real, but well canvassed elsewhere, so I won’t repeat them here. What is less well recognised is how difficult it can be to secure copyright clearances or licenses to use content in emerging digital environments.

(v) Market – All of the issues mentioned above can be addressed or resolved if the right process is followed. But the market issue, specifically, the level of maturity and sophistication in the understanding of key market players (such as advertisers and traditional content distribution channels) is one that can really only be addressed through the effluxion of time – which is highly frustrating for those whose mental models have already adapted to the opportunities we are now witnessing.

The next issue we covered was the importance of the growth of audience content co-creation. Part of my response was:

There is little doubt that consumers are revelling in the new technologies and toolsets that allow them to become content creators (and, importantly, content publishers). Today, consumers have access to tools/technologies at a fraction of what it may have cost them 10 or even 5 years ago, and many of those tools/technologies are being replaced by free (or ‘freemium’) offerings.

A good friend of mine, a former radio DJ, has built himself a production studio in his home office. He estimates he spent about $15 000, and it is just as good (and, in many cases, better) than the professional studio he used to work with in radio, which would have cost in excess of $150 000. He built his studio a few years ago. He estimates that if he was starting from scratch today, it would cost less than $5000.

The implications of this dramatic drop in costs, and dramatic increase in availability of content creation tools and technologies is that it is having a corresponding impact on consumer content creation activities.

I want to expand on this issue, because I think many in the industry are assuming that this high level of consumer content creation will continue ad infinitum.

It won’t.

In economic theory, if you artificially reduce the cost of something, then demand soars (i.e. there is an artificial increase in demand). I believe we are witnessing a similarly artificial increase in consumer activity.

In the consumer technology market, when you make easy something that had previously been very hard to do, activity in that area soars, as a barrier to participation has been removed.

We saw it with Web page publishing tools in 1999. We saw it with blogging in 2005. We’re seeing it with social networking today.

That artificially high usage/activity isn’t sustainable. Most people are doing it simply because they can – but I do not believe it is resulting in the kind of significant behavioural change that would be required to sustain this activity.

The amazing growth in Web pages that was sparked in 1999/2000 with the mass availability of WYSIWYG, point-and-click Web page publishing tools reached a plateau within a few short years. Basically, the middle of the market dropped out. Left were those sitting at either end of the spectrum – the polemicists who were happy to devote time and resources to expressing their views online (even if no-one was really listening) and the professionals, individuals who managed to build a business out of online publishing.

The same thing occurred just recently with blogs. Tools like WordPress, and services like Blogger made it simple and cheap to create a blog. By July 2006, Technorati had tracked its 50 millionth blog.  By July 2007 it was tracking 70 million, and today it reports just over 110 million. And those are only the blogs that Technorati tracks – there are many more not registered with its service.

But these figures don’t reveal the full picture – a high % of blogs are dying (or are already dead). Some feature only one, or a handful of posts, and have lain dormant since.

There are no doubt many underlying causes, but a significant contributing factor would be, quite simply, boredom – after enthusiastically embracing a new capability that had previously been unavailable (due to its complexity), the novelty quickly wears off. Having mastered the process of blogging – and no doubt revelling in the sensation of ‘having blogged’ – unless an individual finds a reason or purpose for continuing to do so, the level of interest quickly declines, and they move on to the next, shiny new thing.

Clearly, the latest shiny new thing is social networks, which I believe will experience a similar decline in usage around the end of 2008.

That is not to say that consumers will completely shun blogs or social networks. They will incorporate these tools at some level into their everyday lifestyles, in the same way they assimilated services like Flickr (who sends printed photographs to family and friends via postal services these days?).

But if your business (or business model) assumes that consumers will be as active in future as they are today in creating content or participating in social networking sites, you might be in for a nasty shock!