If you ask the average customer to name the top three streaming video services, you'll likely hear Netflix (NFLX -9.09%), Hulu, and Amazon (AMZN -2.56%) Instant Video. One major network is notably absent, CBS (PARA 13.40%). If you read between the lines of CBS' recent earnings report, it seems likely that is about to change.

An entertainment powerhouse without the pipes or the parks
In the entertainment industry, few would argue that there are several multi-billion dollar organizations fighting for viewers. Whether it's Walt Disney (DIS 0.16%) trying to get viewers to tune into ESPN, ABC, or the Disney Channel, or Comcast (CMCSA 1.57%) trying to get viewers over to NBC, the entertainment business is a daily battle.

Some would argue that Time Warner deserves mention because of its HBO, TBS, and TNT properties. Others would suggest that Twenty-First Century Fox can't be ignored because of its Fox channel lineup. While each of these companies offers something for everyone, CBS stands alone as prime-time's most-watched TV network .

With viewers tuning in for The Big Bang Theory, NCIS, or a CBS Sports presentation, you don't have to launch a 48 Hours investigation to know that this network is a Survivor. In fact, the company's entertainment division reported a better than 12% increase in revenue which easily beat the 1% increase at Disney and the 3.9% increase at Comcast's NBCUniversal.

In addition, CBS owns the popular Showtime network, which goes head-to-head with content creators at Time Warner's HBO division. Now Showtime also competes with original series from Netflix and Amazon Instant Video. With the Showtime division reporting a more than 36% increase in revenue and both Showtime and CBS reporting pricing power, it seems this company is firing on all cylinders.

While Disney has its theme parks and Comcast owns the pipes to get the content to viewers, CBS just focuses on content creation.

This "new model" could stream profits
With such strong performances from CBS' primary businesses, you could argue that the stock is a buy based on this alone. However, a comment made by management suggests that the company has an idea that will generate better profits in the future.

In the middle of the company's earnings discussion, management said they are looking at a "new advertising model for second run shows." While the company has licensed certain properties like Dexter to Netflix, and The Good Wife, Under The Dome, and a few others are licensed to Amazon Instant Video, the company keeps most of its hits held close to the vest.

It seems likely that CBS is looking at expanding its own offerings through expansion of the already-available CBS and Showtime apps. One thing that could change the landscape of television viewing is the ability of customers to stream video through apps on their smartphones, tablets, media devices, and even their televisions.

Whereas Disney, NBC, CBS and others constantly have to worry about keeping their cable counterparts happy, streaming video through apps is much less structured. For instance, a customer could sign up for Hulu Plus, Netflix, and Amazon Instant Video and find thousands of hours of viewing without ever tuning into a live broadcast.

While CBS hasn't announced anything concrete about a stand-alone streaming service, it isn't outside of the company's capabilities. With a delay of about a week, viewers can already watch episodes of almost every CBS show on the CBS website. The company plans on streaming three days of live events from The GRAMMY's. In addition, because of contract issues affecting DISH Network customers, the company is planning on streaming the Auburn vs. Georgia college football game in affected markets as well.

With the most popular prime-time station and the strength of the Showtime lineup, CBS is positioned to take on Netflix, Amazon Instant Video, and Hulu directly. If the company can discover a way to monetize its second run shows, CBS investors could be treated to first-class results. If you want to keep up with CBS and do some further research into the company's prospects, consider adding CBS to your personalized Watchlist today.