Is Netflix Walking Wounded or Walking Dead?

Everyone's been arguing that Netflix (NAS: NFLX) has been missing a brain in recent weeks, so why not call in the zombies?

AMC Networks' (NAS: AMCX) freshman season of The Walking Dead will begin streaming through Netflix today for subscribers in the United States and Canada. Future seasons will be added to Netflix's growing digital catalog just before the premiere of subsequent seasons.

It's a win-win deal. The second season of the critically acclaimed apocalyptic zombie series debuts a week from Sunday on AMC, so the network will be able to get new audiences up to speed on what they missed during the inaugural season. Netflix benefits by fattening its content offerings during a very sensitive time.

It's not just The Walking Dead moseying on over to Netflix's virtual screening room in this deal. Several of the shows on AMC's IFC, Sundance Channel, and WE tv networks -- including Portlandia, Braxton Family Values, and Bridezillas -- will be filling up Netflix's instant streaming queues.

The deal is similar to the renewed and expanded contract that Netflix signed with Discovery Communications (NAS: DISCA) (NAS: DISCK) last month, giving viewers a broader breadth of niche programming from second-tier cable networks.

Netflix will still need to fill the Liberty Starz (NAS: LSTZA) void when it comes to theatrical content.

When apologists argue that Netflix does have new releases available through its streaming service, they typically point to Starz titles including Tron: Legacy, Toy Story 3, and Let Me In. That deal expires in three months. Outside of DreamWorks Animation (NAS: DWA) for some computer animated fare -- and that deal doesn't kick in until 2013 -- Netflix is lacking the streaming access to new releases that drives its original disc-based business.

Netflix revealed earlier this week that more than half of its streaming usage is now being devoted to television shows. It may be the marquee content that studios are willing to hand over to Netflix -- knowing that it will promote fresher episodes that air first on the networks -- but Netflix can't afford to become just another Hulu Plus.

There's clearly nothing wrong with today's AMC Networks deal. Netflix is a better streaming service with The Walking Dead today than it was yesterday without it. However, it's time for Netflix to start thinking outside of the box -- and inside the box office.

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