Netflix Speeds VFX with AI, Boosts Revenue 16%

Netflix has taken a significant step into the realm of artificial intelligence by incorporating generative AI into its productions. During the company's quarterly earnings call, co-CEO Ted Sarandos revealed that the Argentine sci-fi comic TV show The Eternauts utilized AI to depict a building collapse in Buenos Aires. This move not only reduced production costs but also accelerated the completion of the VFX sequence, finishing it ten times faster than traditional methods.

Sarandos emphasized that The Eternauts is the first Netflix title to fully integrate AI-generated shots into its final footage. He highlighted that without AI, such effects would have been more expensive and time-consuming. The positive reception from both creators and the audience underscores the potential of AI in enhancing storytelling possibilities.

Sarandos believes that AI tools are not just about cost reduction but also about empowering creators to explore new dimensions in filmmaking. He mentioned that AI has already shown benefits in previsualization, shot planning, and visual effects, making the production process more efficient.

In April, Sarandos discussed the use of generative AI in Rodrigo Prieto’s film, Pedro Paramo. He noted that significant cost savings were achieved by using AI to generate de-aging effects, comparing it favorably to the financial implications of the Irishman film.

Netflix co-CEO Greg Peters also highlighted the potential of AI in improving customer experience. He suggested that AI tools could enable customers to find content through natural language processing queries, making the search process more intuitive. Additionally, Peters mentioned that AI could benefit advertising by helping brands create more engaging content, thereby reducing current challenges and enabling more spots.

Netflix reported a 16% rise in revenue to $11 billion for the three months ending in June, compared to the previous year. The company's realized profits increased from $2.1 billion to $3.1 billion, largely attributed to the success of the South Korean thriller Squid Game, which garnered 122 million views.

The use of AI in the entertainment industry has sparked debates, including concerns over job displacement and the potential for AI to replace human creativity. The Hollywood strike in 2023 highlighted these issues, with unions seeking strict regulations on AI use. Tyler Perry, for instance, halted plans to expand his Atlanta studio due to concerns over increased AI-generated videos.

Despite these concerns, industry experts like Davier Yoon, co-founder of Singapore’s animation studio CraveFX, believe that AI is becoming an integral part of filmmaking. He noted that major studios are already incorporating AI tools, and it is only a matter of time before smaller studios can achieve big-budget visuals with the help of AI.