- Netflix CEO Ted Sarandos doesn’t see Gen AI as the big threat to creativity that others are saying it could be.
- In a call discussing the streamer’s FY25 second-quarter earnings, Sarandos said he viewed the tool as “an incredible opportunity to help creators make films and series better, not just cheaper.”
- He said creators are already using Gen AI tools to for everything from pre-visualization and shot-planning to advanced visual effects.
“It used to be that only big-budget projects would have access to advanced visual effects like de-aging,” Sarandos said. “That’s just no longer the case.”
He pointed to an Argentine show called El Eternaut, which used virtual production and AI-powered VF to depict a building collapsing in Buenos Aires. Using Gen AI, the production was able to create the sequence faster and cheaper than they could have with traditional tools and workflows, he said.
“That sequence actually is the very first GenAI final footage to appear on screen in a Netflix original series or film,” Sarandos said. “So the creators were thrilled with the result. We were thrilled with the result. And more importantly, the audience was thrilled with the result. … I think these tools are helping creators expand the possibilities of storytelling on screen, and that is endlessly exciting.”
The comments were made during Netflix’s second-quarter earnings call, where the company announced that its revenue grew 16% and its operating margin increased by seven points (to 34%) year-over-year. The company also revised its full-year revenue guidance up to $44.8-$452 billion from $43.5-44.5 billion, based on the weakening of the U.S. dollar vs. other currencies, along with healthy member growth, healthy ad sales and a second-half slate of programming that includes the final season of Stranger Things, the second season of Wednesday, Adam Sandler’s Happy Gilmore 2, Kathryn Bigelow’s A House of Dynamite and Guillermo del Toro’s Frankenstein.
The company also noted that it had completed the rollout of its proprietary first-party ad tech platform, Netflix Ads Suite, across all markets and has nearly completed its upfront deals, which Gregory Peters, Netflix’s Co-CEO, President & Director, called “in line or slightly better than our targets and consistent with our goal to roughly double the ads business this year.”
With the rollout to all of its ad markets, the company is now in a “learning and improving” phase of gathering feedback and improving what’s already out there, Peters said. The streamer has seen an increase in programmatic buying, and it will roll out additional demand sources as well as interactivity in the second half of the year, he said.
“The most immediate benefit from this rollout is just making it easier for advertisers to buy on Netflix,” Peters said. “We hear that benefit, that ease from direct feedback [of] talking to advertisers. They tell us that it’s easier. We see it in our overall sales performance.”
