Netflix's (NFLX) - Get Netflix, Inc. (NFLX) Reportdeal with Comcast (CMCSA) - Get Comcast Corporation Class A Reportto make a Netflix app available on Comcast's X1 software platform -- it provides integrated access to live TV, DVR, and streaming services -- is far from the streaming giant's first partnership with a pay TV provider.

Netflix already has deals with Dish Network (DISH) - Get DISH Network Corporation Class A Report and international pay-TV firms, as well as some small U.S. cable providers, for example. However, the deal is one of Netflix's most notable pay TV tie-ups for several reasons.

First, because of Comcast's sheer size: The cable giant had 22.4 million video customers at the end of March, and operates in a U.S. market that still accounts for 58% of Netflix's streaming subscriber base. Having a Netflix app show up on the TV interface used by many of those 22.4 million customers should be a pretty useful tool for winning over some of those Comcast customers who aren't already subscribed to Netflix.

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Second, because Comcast, along with Disney (DIS) - Get Walt Disney Company Report and Fox (FOX) - Get Fox Corporation Class B Report, is a co-owner of Netflix rival Hulu. The fact Comcast is willing to play nice with Netflix in spite of its ties to Hulu amounts to an admission of Netflix's U.S. streaming dominance. It might also be an admission that Comcast needs to be pragmatic as it contends with both cord-cutting and telco/satellite TV competition, and give customers what they want even if that means teaming up with a rival of sorts.

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Thanks to the deal, Netflix closed up 1.3% on Tuesday in spite of a 0.8% Nasdaq drop. There could be hopes the agreement will compel other major U.S. pay TV providers to strike similar deals. Verizon (VZ) - Get Verizon Communications Inc. Report, Time Warner Cable (TWC)  and AT&T (T) - Get AT&T Inc. Reportand subsidiary DirecTV are among the possibilities.

All of those companies probably wish Netflix didn't exist, but Netflix has grown to the point where those companies are better served by swallowing their pride and actively supporting a video service whose customer satisfaction ratings are much higher than theirs.

On Wednesday morning, Netflix shares were sliding on a downgrade from Jefferies on concerns about its domestic subscriber growth and a more competitive environment for content.