As the entertainment sector navigates the complexities of integrating generative AI into filmmaking, Netflix is taking a proactive approach. In its latest quarterly earnings report released on Tuesday, the streaming giant emphasized its strategic position to harness the advancements in AI technology, as highlighted in its letter to investors.
While Netflix does not intend to make generative AI the central pillar of its content creation, it recognizes the potential of this technology to enhance efficiency within creative processes.
“It takes a great artist to create something exceptional,” Netflix CEO Ted Sarandos stated during Tuesday’s earnings call. “AI can provide creatives with improved tools to enrich the overall television and movie experience for our subscribers, but it doesn’t inherently make someone a great storyteller.”
Earlier this year, Netflix made headlines by incorporating generative AI for the first time in the final edits of its Argentine series “The Eternaut,” utilizing the technology for a dramatic scene involving a collapsing building. Following that, the creators of “Happy Gilmore 2” employed generative AI to digitally age down characters in the film’s opening sequence. Furthermore, the producers of “Billionaires’ Bunker” utilized this technology as a pre-production tool to visualize wardrobe and set designs.
“We’re confident that AI will assist us and our creative partners in telling stories more effectively and efficiently,” Sarandos noted. “We are fully committed to this endeavor, but we’re not pursuing novelty for its own sake.”
AI remains a controversial topic within the entertainment industry, as artists express concerns that LLM-powered tools, which have often utilized their work without consent for training, could jeopardize their livelihoods.
As a leading indicator in the industry, Netflix appears to be more inclined toward utilizing generative AI for visual effects rather than replacing live actors. This comes amidst discussions around an AI-generated actress that stirred discontent among Hollywood professionals, despite not yet securing any roles known to the public. Nevertheless, these behind-the-scenes applications of AI pose potential implications for jobs in the visual effects sector.
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The conversation around AI escalated recently with OpenAI’s release of the Sora 2 model for audio and video generation, which was launched without adequate protections against the creation of deepfakes featuring actors and historical figures. This week, SAG-AFTRA and actor Bryan Cranston publicly called on OpenAI to implement stricter regulations to prevent the unauthorized deepfaking of actors like Cranston himself.
When an investor inquired about the potential impact of Sora on Netflix, Sarandos acknowledged that the risks to content creators are becoming clearer, yet he expressed less concern regarding the broader movie and TV market—or at least, that’s the message he conveyed to investors.
“We’re not apprehensive about AI overshadowing creativity,” he stated.
In its quarterly report, Netflix reported a 17% year-over-year revenue increase to $11.5 billion, although this figure fell short of the company’s initial projections.
