Netflix and AT&T kick off media earnings season

Tuesday marks the kickoff to another earnings season, and change is en vogue.

Driving the news: Netflix, AT&T and Verizon release their Q1 earnings this week, with Netflix, as usual, getting a head start on its media rivals when it reports after the bell on Tuesday.

• AT&T goes on Thursday, and Verizon will report on Friday — both before the market opens.

Why it matters: Each of the three companies face some level of transition in their business. Netflix is pushing into gaming, while AT&T and Verizon refocus on their core businesses after ill-fated media attempts.

Netflix has braced for a rough earnings period, facing arguably its biggest challenges since upending Hollywood.

• It is projected to gain a paltry 2.8 million subscribers, which would be its lowest Q1 growth in more than a decade (it won't help matters that its Russia suspension will cost it about 1 million subscribers). The company's stock price has dropped 43% since the beginning of the year.
• The streaming giant has focused on a gaming expansion as it tries to keep ahead of its competition. The typically (formerly?) deal-hesitant Netflix has made a few studio acquisitions over the last year.
• There remains a growing belief that Netflix will eventually introduce a cheaper, ad-supported option. Even more importantly, the idea of ads no longer appears to induce nausea in Netflix executives.

Meanwhile, AT&T joins Verizon as a telco training its focus on the core business following an ill-fated attempt at media, having shed WarnerMedia last week.

• Both companies are turning their attentions toward 5G expansion, which has already driven tons of dealmaking in the space.

• AT&T and Verizon find themselves staring up at T-Mobile — which has its own earnings next week — when it comes to 5G. Unlike them, T-Mobile didn't invest a ton of money in a media company; instead, it bought Sprint.

What's next: Earnings season is a marathon, not a sprint. Here are three companies we are paying particular attention to over the next few weeks:

• Twitter: Do you even need to ask us why?
• Warner Bros. Discovery: This was the biggest no-brainer, until Elon went full goblin mode.
• Spotify: The company is still getting out from the Joe Rogan mess and is losing its top podcast dealmaker.