Netflix is fully embracing generative AI, but firmly believes that this technology is merely a tool to enhance creative efficiency, not a source of creativity.
In the quarterly earnings report released on Tuesday, the streaming giant told investors that the company is &#34;in a very favorable position to effectively leverage the ongoing advancements in AI.&#34; Netflix Co-CEO Ted Sarandos emphasized during the subsequent earnings call that the company will &#34;fully invest&#34; in AI to help creative partners tell stories &#34;better, faster, and in new ways.&#34;
Despite the positive attitude, Sarandos also set clear boundaries for the market. He pointed out that AI cannot automatically turn someone who is not good at storytelling into a great storyteller. &#34;Creating great works requires great artists,&#34; he stated.
Netflix's stance may set a benchmark for the industry, indicating that production companies are more inclined to use AI for behind-the-scenes work like special effects rather than directly replacing actors. The earnings report showed that the company's quarterly revenue grew 17% year-on-year to $11.5 billion, but fell short of the company's expectations.
<h2>AI empowers creativity, not replaces it</h2>
Netflix executives repeatedly emphasize that the role of AI is as an auxiliary tool, not a replacement for creators.
Sarandos stated during the earnings call that AI can provide better tools for creatives to enhance the overall viewing experience for members, but it does not itself create great narrative capabilities.
&#34;We are not worried that AI will replace creativity,&#34; Sarandos said.
He added that Netflix's embrace of AI is to help its creative partners improve efficiency and explore new forms of expression, rather than &#34;chasing novelty for novelty's sake.&#34; This perspective aims to reassure the creative community while demonstrating to investors the company's cautious and pragmatic approach to utilizing new technologies.
<h2>Already testing in multiple works</h2>
Netflix's investment in AI is not just verbal. The company has applied generative AI technology in the production processes of several works.
It has been disclosed that in the Argentine series &#34;The Eternaut,&#34; Netflix used generative AI for the first time to create a grand scene of a building collapsing in the final shot.
Additionally, the production team of &#34;Happy Gilmore 2&#34; utilized the technology to make characters appear younger at the film's opening; while the production team of &#34;Billionaires’ Bunker&#34; used AI during the pre-production phase to conceptualize costume and set designs. These cases indicate that Netflix is actively exploring the practical applications of AI in special effects, post-production, and pre-production planning.
<h2>Industry divisions and concerns remain</h2>
Netflix's proactive stance sharply contrasts with the widespread controversy within the entertainment industry. Many artists are concerned that AI models trained on their works without consent may pose a threat to their jobs and intellectual property.
Recent controversies escalated with OpenAI's release of its video generation model Sora 2. The model was launched without sufficient technical safeguards to prevent users from generating deepfake videos of specific actors and historical figures
In response, the Hollywood industry organization SAG-AFTRA and renowned actor Bryan Cranston have publicly urged OpenAI to take stronger restrictions. When asked about Sora's impact on Netflix, Sarandos acknowledged that content creators might be affected, but he expressed less concern about the threat to the film and television business itself

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Netflix CEO stated that the company will "fully invest" in AI to help creative partners tell stories "better, faster, and in new ways." However, it also pointed out that AI cannot automatically turn someone who is not good at storytelling into a great storyteller, "creating great works requires great artists."

- Netflix is embracing generative AI as a tool to enhance creative efficiency, not as a source of creativity.  
- Co-CEO Ted Sarandos emphasized that while AI can assist storytellers, it cannot replace the need for great artists to create compelling narratives.  
- The company has already applied generative AI in various productions, despite ongoing industry concerns about the implications of AI on artists' jobs and intellectual property.

Netflix CEO: Fully committed to AI, but "great works require great artists"