Media giants report earnings as streaming hits the spotlight

It's a big week for media earnings: Fox reports after the bell Tuesday, Wednesday we hear from Time Warner in the morning and CBS in the afternoon, Thursday afternoon from Disney.

These earnings come at a turning point for the industry. Just weeks ago, HBO and CBS announced big moves to launch direct-to-consumer streaming services, joining Disney's ESPN, which is working with the NBA on a streaming-only service.

Television screens
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With the rise of Netflix, Amazon Prime and Hulu offering consumers easy access to premium content, and the ongoing decline of pay TV subscriptions, it's inevitable that media giants will look for ways to cash in on offering content to "cord-nevers." The big question, of course, is how to offer direct-to-consumer options that boost revenue, yet don't cannibalize their core business.

On earnings calls this week the spotlight will shine on this very issue. How much will Time Warner charge for its direct-to-consumer HBO streaming option? How much could revenue from CBS' $6 'All Access' app replace retransmission revenue?

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Media giants have been talking increasingly about all the revenue they're bringing in from new platforms such as Netflix, Amazon, and the like. Now, with the advertising market wobbly, there's more pressure than ever for these newer revenue streams to perform well.

TWC loses video subscribers
TWC loses video subscribers   

As media giants respond to consumer demand for streaming video, so does the FCC. Just last week, FCC Chairman Tom Wheeler made a dramatic proposal to change how TV is distributed and paid for. In a blog on the FCC's website Wheeler proposed leveling the playing field between companies that distribute TV via the Internet, and those that do it the traditional way via cable and satellite. He wrote that the goal is to allow consumers to order and pay for just the channels they want.

"Taking advantage of this rule, new OTTs [over-the-top video providers] may offer smaller or specialized packages of video programming, so consumers will be able to mix-and-match to suit their tastes," Wheeler wrote. "Aereo recently visited the Commission to make exactly this point—that updating the definition of an MVPD [multichannel video programming distributor] will provide consumers with new choices. And perhaps consumers will not be forced to pay for channels they never watch."

Video ads now on Instagram
Video ads now on Instagram   

There are various hurdles before Wheeler's proposal could become law. Analyst Craig Moffett points out that the "real-world implications" of Wheeler's proposal are likely to be limited, as "no one can force a broadcaster to license content" or unbundle if they don't want to.

But Wheeler's proposal reflects a wider shift in both consumer and industry sentiment, as demand for more choices becomes less of a niche nuisance for the media giants and more of a mainstream reality. It's a reality that they're investigating, and even embracing, even without the FCC forcing the issue.

Disclosure: Hulu is owned by CNBC's parent company, NBCUniversal, and by 21st Century Fox and Walt Disney Co.