AI can't replace creativity but helps creators tell stories in new ways, says Netflix's Ted Sarandos

Netflix co-CEO Ted Sarandos

Netflix co-CEO Ted Sarandos believes that artificial intelligence (AI) can't replace creativity but will instead help creatives deliver more impactful content to members.

"AI can give creatives better tools to enhance their overall TV movie experience for our members, but it doesn’t automatically make you a great storyteller if you’re not," Sarandos said during the company's earnings conference call on October 21.

Can AI content creator apps like Sora 2 impact Netflix?

Sarandos’s remarks were in response to an analyst’s query on the impact of Sora 2 and other AI content creation apps, and whether they create new competition from an engagement standpoint. They also come at a time when the rapidly evolving technology is causing unease across the entertainment industry

Earlier this month, OpenAI introduced a standalone social app for its AI video generator Sora, enabling users to create short-form videos from simple text prompts. Last month, Meta also introduced Vibes, a new feed in its Meta AI app for sharing and creating AI-generated short videos.

Sarandos said that these apps are likely to affect UGC (User-Generated Content) creators the most, with AI-generated videos largely replacing viewing of existing user-generated content.

"For what we do, it takes a great artist to make something great. Writing and making shows and films well is a rare commodity, and it’s only done successfully by very few people," he said.

The Netflix co-CEO cited AI-generated music as an example, noting that while it has existed for a long time, it still represents only a small part of total listening, and artists like Taylor Swift remain more popular than ever.

"Even in a world filled with AI music, AI seems to be mostly a tool for musicians to take their sound in new directions," he said.

How is Netflix helping creators use AI?

In a letter to shareholders, Netflix stated that the video streaming service is "well positioned to effectively leverage ongoing advances in AI" as a result of its significant data assets and at-scale products and business processes.

"We believe Generative AI presents a significant opportunity for us to deliver benefits to our members, creators, and business," the company said.

Netflix stated that it is equipping creators with a broad set of GenAI tools to help them realise their visions. For instance, filmmakers of the American sports comedy film Happy Gilmore 2 used GenAI coupled with machine learning and Eyeline’s proprietary volumetric capture technologies to de-age characters during the opening flashback scene. Eyeline is the streaming firm's visual effect unit.

Producers of the Spanish thriller television series Billionaires’ Bunker also used various GenAI tools during pre-production, including for pre-visualisation to explore wardrobe and set designs, the letter stated.

"We’re confident that AI is going to help us and help our creative partners tell stories better, faster, and in new ways. We’re all in on that," Sarandos said during the call.

Read: Netflix's Ted Sarandos on how AI is helping creators make better films, series

How Netflix is using AI across its product and business?

Netflix is using GenAI to enhance the member experience by improving the quality of its recommendations and content discovery features. This includes a conversational search experience that allows members to explore the service’s library using natural language. The company has partnered with OpenAI on this feature and is currently beta-testing it.

Netflix is also leveraging these capabilities to localise its promotional assets into multiple languages, making them more appealing to viewers around the world.

In addition, the streaming platform said it is using AI to experiment with new ad formats, generate the most relevant ad creative and placement for members, and for faster development of media plans. "With these advancements, we’ll be able to test, iterate, and innovate on dozens of ad formats by 2026," Netflix noted in the letter.

Netflix's Q3 financial performance

Netflix saw its revenue grow by 17 percent year-on-year (YoY) to $11.5 billion in the third quarter of 2025, while the net income increased 8 percent to $2.55 billion.

The streaming giant said it posted its best ad sales quarter ever during the period and is now on track to more than double its ads revenue in 2025, albeit on a relatively small base. However, it didn't disclose any specific numbers.

Netflix currently offers ad-supported tiers in 12 markets including the United States, United Kingdom, Canada, and Australia. It doesn't offer these tiers in India at present.