Netflix goes ‘all in’ on generative AI as entertainment industry remains divided

As the entertainment industry considers when and how to use generative AI in filmmaking, Netflix is ​​moving in. In its quarterly earnings report released Tuesday afternoon, Netflix wrote in a letter to investors that it is « very well positioned to effectively leverage ongoing advances in AI. »

Netflix doesn’t plan to use generative AI as the backbone of its content, but believes the technology has potential as a tool to make advertising more effective.

« It takes a great artist to make something great, » Netflix CEO Ted Sarandos said Tuesday. « AI can give creators better tools to improve their overall TV/film experience for our members, but that doesn’t automatically make you a great storyteller if you’re not. »

Earlier this year, Netflix said it used generative AI in the final shots for the first time in the Argentinian show « The Eternaut » to create a scene of a collapsing building. Since then, the filmmakers behind « Happy Gilmore 2 » used generative AI to make characters look younger in the film’s opening scene, while the producers of « Binlionaires’ Bunker » used the technology as a pre-production tool to imagine wardrobe and set design.

« We are confident that AI will help us and help our creative partners tell stories better, faster and in new ways, » Sarandos said. « We’re all in on it, but here we’re not chasing novelty for novelty’s sake. »

AI is a controversial topic in the entertainment industry, as artists worry that LLM tools that have used their work as training data without consent have the potential to negatively impact their work.

With Netflix leading the way, it seems that studios are more inclined to use generative AI for special effects rather than replacing the role of actors – even if an AI actor recently caused a stir among Hollywood actors, although he has yet to book any gigs (that we know of). However, these behind-the-scenes uses of AI still have the potential to impact visual effects work.

These debates recently escalated when ChatGPT creator OpenAI unveiled its audio and video generation model Sora 2, which was released without the railings that prevent users from generating videos of certain actors and historical figures. Just this week, Hollywood trade organization SAG-AFTRA and actor Bryan Cranston called on OpenAI to introduce stronger safeguards against deeply fake actors like Cranston himself.

When an investor asked Sarandos about Sora’s impact on Netflix, he said it’s « starting to make sense » that content creators could be affected, but he’s less worried about the movie and TV business — or so he tells investors.

« We’re not worried about artificial intelligence replacing creativity, » he said.

Netflix’s quarterly revenue rose 17% year-over-year to $11.5 billion, although that was below the company’s forecast.