Netflix is fully embracing generative AI, but firmly believes this technology is merely a tool for enhancing creative efficiency, not a source of creativity.

In its quarterly earnings report released on Tuesday, the streaming giant informed investors that the company is "in a very advantageous position to effectively utilize the continuous advancements in AI." Co-CEO Ted Sarandos emphasized during the subsequent earnings call that the company will "fully invest" in AI to help creative partners "tell stories better, faster, and in new ways."

Despite this positive stance, Sarandos also set clear boundaries for the market. He pointed out that AI cannot automatically turn someone who is not skilled at storytelling into a great storyteller. "Creating great works requires great artists," he stated.

Netflix's position may serve as a industry benchmark, suggesting that production companies are more likely to use AI for behind-the-scenes tasks like special effects, rather than directly replacing actors. The earnings report showed that the company's quarterly revenue grew by 17% year-over-year to $11.5 billion, though this was below company expectations.

AI Empowers Creativity, Not Replaces It Netflix's executives repeatedly stressed that the role of AI is as an auxiliary tool, not a replacement for creators.

Sarandos noted during the earnings call that AI can provide creative personnel with better tools to enhance the overall viewing experience for members, but it does not itself create great narrative capabilities. "We are not worried that AI will replace creativity," Sarandos remarked.

He added that Netflix's embrace of AI is intended to help its creative partners increase efficiency and explore new forms of expression, rather than "chasing novelty for the sake of novelty." This viewpoint aims to reassure the creative community while signaling to investors the company's cautious and pragmatic approach to utilizing new technology.

Practical Applications in Various Projects Netflix's investment in AI is not merely theoretical. The company has already implemented generative AI technology in the production processes of several projects.

It has been disclosed that in the Argentine series "The Eternaut," Netflix was the first to use generative AI to create a grand scene of buildings collapsing in the final shot.

Additionally, the production team of "Happy Gilmore 2" used this technology to make the characters appear younger at the film's opening; while the team behind "Billionaires’ Bunker" utilized AI in the pre-production phase to conceptualize costumes and set designs. These cases illustrate that Netflix is actively exploring the tangible applications of AI in special effects, post-production, and pre-planning stages.

Ongoing Industry Divisions and Concerns Netflix's proactive stance sharply contrasts with the extensive controversies within the entertainment industry. Many artists are concerned that AI models trained on their work without consent may threaten their job security and intellectual property rights.

Recent disputes have escalated following OpenAI's release of its video generation model, Sora 2, which launched with inadequate technical safeguards to prevent users from generating deepfake videos of specific actors and historical figures.

In response, Hollywood's industry organization SAG-AFTRA and renowned actor Bryan Cranston have publicly urged OpenAI to adopt stronger restrictions. When asked about the impact of Sora on Netflix, Sarandos acknowledged that content creators may be affected, but he expressed less concern about threats to the film and television business itself.