Kevin Landis, a longtime Silicon Valley investor, explained why he bailed out of Netflix (NFLX) after many very profitable years as a shareholder. It's not so much that he doesn't like Netflix as that he sees little value or opportunity in any company that distributes entertainment. As he sees it, it's such an easy thing to do these days, so many businesses are doing it, and so many consumers know it.
"Now you just need an Internet connection and a fearless curiosity and you can find content," Landis, manager of the Firsthand Technology Opportunities Fund (TEFQX), told MoneyWatch. "You don't need a cable company to be a monopoly provider of content for you."
It's the cable companies, most notably Comcast (CMCSA) and Time Warner Cable (TWC), for which he has particular disdain. "These guys for years have been in the business of running a monopoly," he remarked. "They get the rights to dig a trench on your street and lay down some fiber, then they don't have to do much but cash checks."
And while we're up in orbit, Landis said he is no fan of Sirius XM Radio (SIRI) either. Who is, after all? Sirius, which for some reason is a stock that bloggers fixate upon, has fallen from more than $60 a share in 2000 to less than $2 today.
"Satellite radio was a great idea until Internet radio came along and there was a wifi connection everywhere," he observed. "Why do we need satellite radio?"
It remains to be seen whether other cable and satellite stocks, not to mention Netflix, end up on the same trajectory as Sirius, but Landis wouldn't bet against it. As far as he's concerned, it's what you transmit that has value, not how you transmit it.
"Content will continue to be more important than distribution," he predicted. "For distributors to have power, they have to stand between viewers and content providers, but there are going to be more tools out there for viewers to find their own content."