Netflix chief Ted Sarandos says AI can make movies '10% better'

• Ted Sarandos, the co-CEO of Netflix, said AI can open the door to improving movies overall.
• In addition to making them cheaper, as James Cameron recently said, Sarandos said he believes movies can be made "better."
• Talent at Netflix is already leveraging AI, particularly in VFX, he said on a Q1 earnings call.

Netflix co-CEO Ted Sarandos said he believes AI's true potential in Hollywood lies not in making movies more cost-efficient, but overall "better."

"There's a ton of excitement about what AI can do for content creators," Sarandos said on a Q1 earnings call when asked about how "meaningful" AI could be. "I read the article too, what Jim Cameron said about making movies 50% cheaper. I remain convinced that there's an even bigger opportunity if you can make movies 10% better."

Earlier this month, "Avatar" director Cameron said AI had the potential to cut the cost of blockbuster movies clear in half — a necessity, he said, if the medium is to survive. He's an advocate of using it to reduce expenses for "big effects-heavy, CG-heavy" films, rather than to generate "word salad" scripts.

Already, Sarandos said, creators at Netflix are using AI in just that fashion.

"So, our talent today is using AI tools to do set references or pre-vis, VFX sequence prep, shop planning, all kinds of things today that kind of make the process better," Sarandos said.

Sarandos said he believes it also allows smaller films to have access to effects that previously would've been locked behind large budgets typically reserved for big-name projects.

"Traditionally, only big-budget projects would have access to things like advanced visual effects, such as de-aging," he said. "So, today you can use these AI-powered tools to enable smaller budget projects to have access to big VFX on screen."

The technology remains controversial in Hollywood.

Concerns about the potential damage AI could do to creative industries, particularly in terms of job replacement, partly sparked the 2023 joint strike of SAG-AFTRA and the WGA. Since the resumption of production across the industry, AI as a technology has continued to advance rapidly, but has remained relatively narrow in terms of scope — largely confined to the VFX department.

Sarandos cited the experience of cinematographer Rodrigo Prieto as an example of how AI can be leveraged successfully, in this case, to reduce the cost of a de-aging effect.

"A recent example I think is really exciting, Rodrigo Prieto was the DP on 'The Irishman' just five years ago," Sarandos said. "And if you remember that movie, we were using very cutting-edge, very expensive de-aging technology that still had massive limitations, still created a bunch of complexity on set for the actors."

Just half a decade later, Sarandos said, AI has substantially shrunk the cost of de-aging.

"Using AI-powered tools, he was able to deliver this de-aging VFX to the screen for a fraction of what it costs on 'The Irishman,'" he said. "In fact, the entire budget of the film was about the VFX costs on 'The Irishman.'"

Moving forward, Sarandos said Netflix aims to continue to create opportunities for AI to improve what it's like to work as a creator, rather than replace the role entirely.

"So, same creator using new tools — new better tools — to do something that would have been impossible to do just five years ago," he said. "That's incredibly exciting. So, our focus is simple: find ways for AI to improve the member and the creator experience."