How does change happen? Slowly, then all at once.
I recently wrote about the disruption of cable TV (note here). As I dive further into the Cord Shaving theme, I find myself struck by the unnecessary complexity of the set-top box industry. And I can’t help but consider the parallels between today’s set-top box makers and Nokia, which went from a dominant handset maker to irrelevant in just a few short years (background here).
Instead of reviewing the maze of middleware, software and protocols that defines the set-top box market, I think it is more helpful to abstract the complexity away and start with a very simple question:
What is a set-top box?
To me, it’s just a technical layer that translates input to output.
Once you understand that part, you get to the question that really matters:
What’s proprietary about this “technical layer”?
And the answer to that question may surprise investors: Nothing.