How Is Netflix Streaming So Fast?

Whether on my iPad, laptop or Tivo, Netflix videos stream very reliably, in what looks to me like very good 720p video. Youtube by contrast is constantly pausing to load more of the video, even though the video quality is much inferior.

Does Netflix have some arrangement with ISPs to cache movies locally, or to provide more bandwidth? I’m also curious if this has been the experience of others as well.

FWIW this is on Verizon FiOS.