As the entertainment industry considers when and how to use generative AI in filmmaking, Netflix is leaning in. In its quarterly earnings report released Tuesday afternoon, Netflix said in a letter to investors that it is “very well positioned to effectively leverage ongoing advances in AI.”
Although Netflix has no plans to use generative AI as the backbone of its content, it sees the potential of this technology as a tool to make creatives more efficient.
“It takes great artists to make great things,” Netflix CEO Ted Sarandos said on Tuesday's earnings call. “AI can give creators better tools to improve their members’ overall TV and movie experience, but it doesn’t automatically make them better storytellers.”
Earlier this year, Netflix announced that it had used generative AI in the final footage of the Argentinian show The Eternaut for the first time to create a scene where a building collapses. Since then, the makers of The Happy Gilmore 2 used generative AI to make characters look younger in the film's opening scene, and the producers of The Billionaire Banker used the technology as a pre-production tool to envision wardrobe and set design.
“We believe AI will help us and our creative partners tell stories better, faster and in new ways,” Sarandos said. “We're all for it, but we're not chasing newness for newness' sake here.”
AI is a controversial topic in the entertainment industry, and artists are concerned that tools powered by LLM, which use their work as training data without their consent, could negatively impact their work.
With Netflix leading the way, it seems more likely that studios will use generative AI for special effects rather than replacing the roles of actors. Even though AI actors have recently caused a stir among Hollywood actors, even though (as far as we know) they haven't booked any gigs yet. However, this behind-the-scenes use of AI still has the potential to impact visual effects work.
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These discussions recently escalated when OpenAI, the creator of ChatGPT, announced its Sora 2 audio and video generation model, which was released without any guardrails preventing users from generating videos of some actors and historical figures. Just this week, Hollywood trade group SAG-AFTRA and actor Bryan Cranston called on OpenAI to create stronger guardrails for deepfake actors like Cranston himself.
When an investor asked Sarandos about Sora's impact on Netflix, Sarandos said it was “starting to make sense” that content creators could be affected, but told investors he wasn't as worried about the movie and TV business.
“We're not worried about AI replacing creativity,” he said.
Netflix's quarterly revenue rose 17% year over year to $11.5 billion, which was below company expectations.