Netflix stated in its quarterly earnings report to investors that the company is "in a favorable position to effectively leverage ongoing advancements in AI." This statement clarified Netflix's stance on generative AI in film and television production — as a tool to enhance creative efficiency, not as a content producer.

CEO Ted Sarandos emphasized during the earnings call: "Great works require great artists. AI can provide creators with better tools to enhance the overall TV/movie experience for members, but if you are not an excellent storyteller, AI won't automatically make you one."

In practical applications, Netflix has already experimented with generative AI technology in multiple projects. Earlier this year, the company used generative AI for the final scene of the Argentine series "The Eternaut," creating a building collapse scene. Later, the producers of "Happy Gilmore 2" used the technology to make the character look younger in the opening scene, while the team behind "Billionaires' Bunker" used it as a pre-production tool for conceptualizing costumes and set designs.

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Image source note: The image was generated by AI, and the image licensing service provider is Midjourney

Sarandos said: "We believe AI will help us and our creative partners tell stories better and faster, and in new ways. We are fully committed, but not for novelty's sake."

AI has always been a controversial topic in the entertainment industry. Artists worry that large language model tools trained on their work without consent may negatively impact their jobs. From Netflix's practices, as an industry trendsetter, streaming platforms tend to use generative AI for visual effects rather than replacing actors. Nevertheless, these behind-the-scenes AI applications could still affect jobs related to visual effects.

These controversies escalated after OpenAI launched the Sora2 audio-visual generation model. When the model was released, it did not include measures to prevent users from generating videos of certain actors and historical figures. This week, the Screen Actors Guild - American Federation of Television and Radio Artists (SAG-AFTRA) and actor Bryan Cranston urged OpenAI to establish stronger protective mechanisms to prevent deepfakes of actors.

When investors asked Sarandos about the impact of Sora on Netflix, he said it was "becoming reasonable" for content creators to be affected, but he expressed less concern about the movie and television business — at least, that was the message he conveyed to investors. "We don't worry that AI will replace creativity," he said.

Netflix's revenue for this quarter increased by 17% to $11.5 billion, but it fell short of the company's expectations.

From a strategic perspective, Netflix's statement attempts to find a balance between embracing technological innovation and reassuring creative talent. The company clearly positions AI as a "tool" rather than a "replacement," emphasizing the irreplaceability of "great artists." This expression conveys both technological foresight to investors and signals respect for professional values to the creative community.

The specific application cases disclosed by Netflix reflect the current positioning of AI in film and television production. Generating scenes of building collapses, making characters appear younger, and providing previews for pre-production design all fall under auxiliary technological applications, which reduce production costs or shorten production cycles, but do not touch core creative aspects such as scriptwriting or performance direction.

However, even these "auxiliary" applications have raised concerns about employment impacts. Visual effects professionals may face direct challenges — if AI can generate complex scenes like building collapses, the workload of traditional special effects teams may decrease. Netflix emphasizes that AI helps creative people work more efficiently, but improved efficiency often means requiring fewer human resources.

Sarandos's response to the impact of Sora appears relatively cautious. He acknowledged that it is "becoming reasonable" for content creators to be affected, but he also stated he is "not too worried" about the film and television business. This statement may reflect Netflix's actual judgment: currently, generative AI still has clear limitations in the coherence, quality, and creative depth of long-form video content, and it is unlikely to threaten the core position of professional production in the short term.

From an industry impact perspective, as one of the world's largest streaming platforms, Netflix's AI application practices have a demonstration effect. If Netflix proves that AI assistance tools can reduce costs or improve efficiency while maintaining quality, other producers may accelerate their adoption. This will promote the entire industry's acceptance of AI tools, while also intensifying discussions on employment impacts and creative value.

Copyright and portrait rights issues are another key challenge. The controversy caused by Sora2's lack of protective measures shows that the development speed of technological capabilities has exceeded the establishment of ethical frameworks and legal regulations. The calls from SAG-AFTRA and Bryan Cranston represent the demands of creative workers for the protection of their own rights. How Netflix ensures that it does not infringe on the rights of actors, screenwriters, and other creative personnel while using AI tools will be a challenge it continues to face.

From a business perspective, Netflix's investment in AI is closely related to its pressure on content costs. The company invests billions of dollars annually in original content, and if AI tools can save costs in areas such as visual effects and post-production, it will directly improve financial performance. Although revenue for this quarter increased by 17%, it did not meet expectations, which may strengthen the company's motivation to seek efficiency tools.

Sarandos's statement that "we don't worry about AI replacing creativity" is both a confidence display to investors and a reassurance to the creative community. However, whether this optimistic view can withstand the test of time depends on the actual trajectory of AI technology. If AI achieves breakthroughs in areas such as script generation, character design, or even performance simulation in the future, the current "tool" positioning may need to be re-evaluated.

In summary, Netflix's AI strategy reflects the pragmatic attitude of the entertainment industry in the face of technological change: actively exploring application scenarios to improve efficiency and reduce costs, while emphasizing the core value of human creativity to maintain the industry ecosystem and social recognition. Whether this balance can be sustained will depend on the speed of technological progress, the improvement of regulatory frameworks, and the coordination of interests among industry stakeholders.