Groundbreaking news that Virgin Media is bringing Netflix directly to its set-top box in the U.K. in effect elevates Netflix to the status of a new cable network—a benefit for a cable company and beyond being an upstart threat to cable.
The deal, which makes Netflix available on cable set-top boxes for the first time, was announced Monday. On Tuesday, Netflix shares hit a new all-time high, trading 6.5 percent higher to $313, flying past its record $304 on July 13, 2011. (Click here for Netflix's latest stock price.)
The stock's nearly 220 percent gains this year have been driven largely by the success of its original content deals, which have helped add new subscribers, giving Wall Street confidence that exclusive originals will continue to deliver.
Virgin's parent, Liberty Global, gained just under a percentage point on Tuesday's news.
Virgin Media's partnership with Netflix is the first time a cable operator is bringing the streaming service directly to the set-top box. Other cable operators—like Comcast—allow users to access Netflix through Internet-connected set-top boxes—but this is the first time a cable channel has directly made a deal with Netflix to treat its content just like that provided by cable channels like HBO (owned by Time Warner) and Showtime (owned by CBS). (Disclosure: Comcast is the owner of NBCUniversal, the parent company of CNBC and CNBC.com.)