A Comcast EVP explains why streaming video is a terrible business, as all his competitors jump into the internet TV bloodbath headfirst

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Comcast isn't looking to join the list of companies offering over-the-top streaming video (OTT) services, like AT&T and Disney.
The cable giant has tried to get streaming services, like Seeso and Watchable, off the ground without success.
It's unclear what the Comcast's strategy with Sky's OTT service, Now TV, will be.

For consumers seeking alternatives to linear TV, the options seem boundless.

Walmart, WarnerMedia, and Disney have all announced options coming to market — not to mention digital upstarts like Netflix, Hulu, or YouTube.

But armed with an arsenal of NBCUniversal content and the largest cable TV subscriber base in the US, Comcast isn't looking to join the list of companies offering overt-the-top (OTT) services, or television delivered over the internet.

"When you look at over-the-top services, it's very difficult for us to identify a business model that makes sense, especially when you see some players selling video at a negative gross margin," Matt Strauss, the executive vice president of Xfinity Services, told Business Insider. "Out of footprint OTT doesn't look nearly as attractive to us as the opportunity to continue to grow our broadband share in footprint and to deliver other products and services as part of that broadband."

Comcast seems so averse to the thought of streaming that Strauss mentioned the ability to bundle other products and services, like Xfinity home security, as a more attractive upside opportunity for the company than a streaming service.

Perhaps prior attempts at streaming contribute to Comcast's reticence to jump into the field. NBC shuttered its comedy streaming service Seeso last year, and couldn't get the app Watchable off the ground.

What about Now TV?

The timing of Comcast's aversion to streaming is interesting. A highlight of the third quarter earnings call was a separate presentation on Sky, which Comcast recently acquired. Sky already has an OTT service called Now TV, and with 23 million satellite subscribers in Europe, Comcast now has a large customer base to convert over to OTT subscribers.

That option is so attractive that some analysts predicted Comcast might focus on a global Netflix challenger, building out Now TV, which already has a strong content portfolio with exclusive rights to run HBO shows like "Game of Thrones" and "Westworld" across Europe, as well as the majority of Premier League TV rights and exclusive rights to the German Bundesliga. Comcast also has a 30% stake in Hulu, with majority ownership from Disney, which would directly compete with Comcast's newly-acquired Now TV, Sky's OTT platform. That has led some analysts to predict Comcast will sell its Hulu stake.

"Comcast may divest its stake in Hulu given it will now have its own Now TV platform and would likely have no interest in feeding its content to a direct competitor to both sides of its business," according to a research note by Cowen analysts.

In the US, Comcast's recent attention has been on the OTT integrations on its X1 set-top box.

X1 is the number one platform for Netflix in its footprint, according to Strauss, and Comcast has integrated YouTube service into its platform, with Amazon Prime Video coming soon. Comcast's goal is to offer to customers a seamless way to access all of its content in one place.

"We really see X1 as the premium destination for allowing customers to get access to all of their TV choices in one place," Strauss said. "Some say the future of TV is apps, we really believe it is more and more around aggregation."

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