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

As the entertainment sector grapples with the role of generative AI in filmmaking, Netflix is making a decisive commitment. In its latest earnings report, released on Tuesday, the streaming giant expressed its strong belief in leveraging the advancements of AI technology. The company indicated that while it does not intend to make generative AI the cornerstone of its content creation, it sees significant potential for the technology to enhance the efficiency of creative processes. CEO Ted Sarandos emphasized during the earnings call that exceptional artistry is still paramount. "AI can provide creators with better tools to enrich the viewing experience for our subscribers, but it won't transform a mediocre storyteller into a great one," he remarked. Earlier this year, Netflix made its first foray into using generative AI in a scene for the Argentine series "The Eternaut," where it simulated a building collapse. Following this, the team behind "Happy Gilmore 2" employed the technology to rejuvenate characters in the film's opening sequence, while the producers of "Billionaires’ Bunker" utilized it during pre-production to conceptualize wardrobe and set design. Sarandos expressed confidence that AI will empower both Netflix and its creative collaborators to tell stories more effectively and innovatively. "We’re fully committed to this path, but we aren't pursuing novelty for its own sake," he stated. However, the use of AI in entertainment remains a contentious issue, as many artists express concerns that tools powered by large language models, which have drawn from their work without consent, could jeopardize their careers. With Netflix leading the charge, it appears that studios are inclined to apply generative AI primarily for visual effects rather than as a substitute for actors. This comes in the wake of controversy surrounding AI-generated performances, even though a recent AI actor has yet to secure any roles. Behind-the-scenes applications of AI do have the potential to influence visual effects employment, a concern that has intensified with OpenAI's recent launch of its Sora 2 audio and video model, which lacks safeguards against unauthorized deepfakes of actors and historical figures. In response to these developments, the Hollywood union SAG-AFTRA, along with actor Bryan Cranston, has called on OpenAI to implement stronger protections. When questioned about the implications of Sora for Netflix, Sarandos acknowledged the potential impact on content creators, but he expressed confidence in the resilience of the film and television industry. "We’re not concerned about AI overshadowing creativity," he stated. Despite these challenges, Netflix reported a 17% year-over-year revenue increase to $11.5 billion, though this figure fell short of the company’s predictions.