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AI is at the forefront of discussion in pretty much every aspect of life right now, and Hollywood is no exception. The very mention of it often elicits a gag-like reaction from both entertainment consumers and those working within the entertainment industry. Regardless, the technology is at the door, and like it or not, Netflix is dabbling in it from pre- and post-production to integrating it into a search function within the app that has yet to fully roll out.
During a recent wide-ranging interview in New Delhi, India, celebrating the company’s 10th anniversary in the country, Netflix Co-CEO Ted Sarandos gave his most nuanced take on how the streaming giant views AI as of today. From using specialized tools to save millions on costly reshoots to a stark warning about fully AI-generated content, Sarandos made it clear: Netflix sees AI as a powerful creator tool, but it will never replace the human element of storytelling.
Here’s a breakdown of everything Ted Sarandos had to say about the future of AI at Netflix.
AI is a Tool for Filmmakers, Not a Replacement
When asked about the controversy surrounding AI in the media ecosystem, Sarandos immediately framed the technology as an empowering asset for creators, particularly for ambitious projects with limited resources.
He noted that Netflix has already used AI tools in various capacities across roughly 300 recent productions. Currently, the most practical applications are in pre-visualization—allowing directors to safely and efficiently plan out complicated or dangerous shots—and in accelerating post-production and VFX workflows.
However, Sarandos was adamant that cost-cutting is not the primary goal.
“I look at it as a great opportunity to tell bigger, better stories, but they have to be better. So if it’s a cost saver, it’s fine, but it is not gonna change anything. In fact, it may be harmful if it doesn’t make a better product. […] At the end of the day, if it’s not better, those things don’t matter.”
The “Interpositive” Tool: Fixing Hollywood’s Reshoot Problem
One of the most revealing moments of the interview came when Sarandos detailed exactly how AI might save Netflix millions.
Typically, up to 20% of a film or television show’s budget is burned on reshoots and pickups. Sets have to be rebuilt, and actors have to be flown back—sometimes months later, after they’ve changed their physical appearance for a new role.
To combat this, Netflix has invested in a highly specialized AI tool:
“Right now, this Interpositive is an AI tool that we purchased with Ben Affleck and partnered with him to bring that tool to scale. It enables a filmmaker using just the data of the film that they made… and the AI is kind of trained in film school, not necessarily trained in everything ever made. And is able to do that quick pickup shot in AI as almost like a visual effect.”
Because the AI is trained exclusively on the specific film’s data, it can seamlessly generate necessary pickup shots without pulling the audience out of the experience. Sarandos views this as an incredible “fail-safe” that allows productions to stay on time and on budget, with the savings ultimately being reinvested directly onto the screen.
The 70% Drop: Why 100% AI Storytelling Doesn’t Work
While Netflix is embracing AI behind the scenes, Sarandos offered a stern warning about the limits of the technology on the screen.
When an audience member asked about the threat of AI platforms generating studio-quality short-form content that could rival massive IPs like Stranger Things or Squid Game, Sarandos pointed to a recent industry cautionary tale. He shared a metric regarding a major micro-drama company in China that decided to pivot to entirely AI-generated content.
The result? Audience engagement plummeted by 70%.
“Audiences are looking to either escape or connect when they engage in content, in programming, and there’s something about the lack of humanity there that people are rejecting right now for this kind of storytelling. So I’m not saying that isn’t true forever, but it seems to be true for now.”
To cap off the discussion, Sarandos was asked what advice he would give to other CEOs trying to navigate the AI boom. His response was a thinly veiled critique of tech companies rushing to adopt AI simply for the sake of following a trend (specifically calling out Meta’s previous strategy of incentivizing employees to “burn through tokens”).
“Figure out what is the use case for AI that advances your business initiative, and don’t get caught up in this idea that you just have to be in AI because that’s where all the investment’s going. […] I think it’s very important that people have a strategy of what are they going to use this tool for, and how will it improve the business… versus being AI at all, at any cost.”
What are your thoughts on Netflix’s approach to AI so far? Let us know in the comments below!