We've seen the launch of several high-profile over-the-top (OTT) linear TV services in the past six months. AT&T (T -1.19%) rolled out DirecTV Now in November last year, and Hulu and YouTube introduced their live TV services earlier this year. Meanwhile, DISH Network (DISH) continues to add more networks to its Sling TV service.

But the largest cable TV provider isn't worried about the streaming competition. Comcast (CMCSA 0.69%) CEO Dave Watson spoke at the MoffettNathanson Media & Communications Summit last week. "We're going to stay the course," he said when asked about the new streaming services. Comcast has been dealing with a highly competitive market for about a decade, and a few more competitors won't change its strategy.

Comcast logo

Image source: Comcast.

Delivering the best video product

Watson says concentrating on the traditional cable business allows Comcast to deliver what he considers "the very best video product." He focused specifically on X1, which he says the company views as an operating system for video content delivery. Comcast's X1 boxes are now in over 50% of its subscribers' households. The system aggregates video content from Comcast and other video providers like Netflix, and makes them all easily searchable from one place.

Comcast has found higher retention rates among customers with X1 versus those without it. As more streaming options crop up and compete with Comcast in its territory, X1 will be key to keeping customers from switching.

But unlike traditional cable and IPTV (like AT&T's U-Verse) operators, streaming services don't require any physical infrastructure wired to the home. That means they can easily compete nationwide including in Comcast's territory. While Comcast is used to facing one or two competitors in its territory, the new OTT services mean it will be facing five or six.

No plans for a nationwide streaming service

Comcast has reportedly taken the rights to stream some networks nationwide, but it still has work to do to put together a complete package of channels. Investors shouldn't expect Comcast to launch its own DirecTV Now-type service anytime soon, though. "Every time we look at the business model outside of footprint, it just doesn't make sense," Watson said.

The problem is Comcast doesn't want to sacrifice margins for a larger subscriber base. The margins on Sling TV and DirecTV Now are extremely thin. Management at both Dish Network and AT&T argue that because the services are much less capital-intensive and customer acquisition costs are much lower, they can afford to give up a lot of margin on the services.

But Comcast would be giving up more than margins; it would lose the ability to bundle services if it launched a nationwide streaming service. Bundling was a key aspect to AT&T's DirecTV Now plan, as it offers unlimited DirecTV Now streaming to its wireless customers. (The sudden popularity of unlimited data plans threw a bit of a wrench in that plan, however.) Comcast doesn't have any nationwide services it could bundle like AT&T does.

Comcast's not afraid, but it should be

While Comcast plans to stay the course and work on building the best video service it can, the influx of linear TV streaming services could put serious pressure on its video business. When AT&T and other telecoms started building out their video services a decade ago, Comcast began losing subscribers. It's now starting to win some back, but that trend might not last for long as consumers gain more options.

If Comcast starts losing significant subscribers again, management may want to take a closer look at launching a nationwide streaming service of its own.