Netflix’s quarterly financial results were disclosed on Tuesday, showing revenue of $11.51 billion which was slightly below the anticipated $11.52 billion according to Bloomberg. Earnings per share stood at $5.87, falling short of the estimated $6.94. Although not a major setback, the company’s stock price declined by 5.6%.
The focus then shifted to Netflix’s advancements in artificial intelligence (AI). In their shareholder letter and during the earnings call, co-CEOs Ted Sarandos and Greg Peters highlighted the upcoming integration of generative AI as a significant development in content creation, user interaction, and advertising. The emphasis on AI gave a sense of déjà vu to 2023.
During the earnings call, Peters discussed six challenges faced by Netflix, with AI implementation being prominently mentioned as the second item on the list. The shareholder letter also acknowledged the pivotal role of machine learning (ML) and AI in powering title recommendations and production technologies for several years.
Netflix is actively incorporating AI features across its platform, aiming to enhance user experience. For example, a beta test is underway for a “conversational search” function intended to assist users in discovering suitable content quickly. The company is also exploring using AI to localize promotional materials into various languages and regions, potentially bringing obscure foreign content to a wider audience.
Furthermore, Netflix plans to provide creators with a range of GenAI tools to support their creative visions. Examples include using AI for de-aging in films like Happy Gilmore 2 and employing Generative AI tools for concept art in projects like Billionaires’ Bunker.
Addressing concerns about Sora 2, an AI video generator causing copyright issues online, Sarandos reassured that Netflix remains unfazed by its impact for now. He suggested that Sora 2 might affect user-generated content creators more significantly in the near future.
Sarandos has been actively persuading influencers to switch from YouTube to Netflix amid concerns about Sora 2’s potential influence on online content creation. He emphasized that while AI can enhance storytelling capabilities, it does not replace the essence of being a great storyteller.
In conclusion, Sarandos expressed confidence in leveraging AI technology to improve storytelling processes collaboratively with creative partners. The company remains committed to integrating AI innovations for better and faster storytelling experiences.