They do but geostationary is at an altitude of 35,786km. That gives a circumference of 264,869km and an arc length of 736 km per degree. That is a lot of space to fit satellites.

"Space is big. You just won't believe how vastly, hugely, mind-bogglingly big it is. I mean, you may think it's a long way down the road to the drug store, but that's just peanuts to space." - Douglas Adams