Are other studios following Netflix’s lead in AI scene generation?
Are other studios following Netflix’s lead in AI scene generation?
Netflix changed how we watch TV, and it seems they will be changing it once again. And, to be honest, out of all companies, it’s Netflix that we expected to integrate AI into their service first. For those who don’t know, last month, Netflix quietly deployed text-to-video technology to create a building collapse scene in “El Eternauta,” completing it ten times faster than traditional methods would allow. They were the first major platform to do so, and the scariest part was that most viewers probably couldn’t even tell it was AI. While other studios have been tiptoeing around AI integration, worried about lawsuits and union backlash, Netflix simply went ahead and did it. Now the next question is: Did they open the floodgate?
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Why Netflix?
Netflix has always been the company that moves first and worries about the consequences later. It’s almost become their signature move at this point.
Remember when they made the audacious decision to kill their own golden goose? In 2007, Netflix was riding high on their DVD-by-mail service, but they saw the writing on the wall before anyone else did. While Blockbuster was still convinced physical rentals were the future, Netflix pivoted hard into streaming. The move was so controversial that their own customers revolted, their stock price tanked, and critics called it corporate suicide.
But that wasn’t even their most daring gamble. In 2013, when traditional TV networks scoffed at the idea of releasing entire seasons at once, Netflix dropped “House of Cards” all in one go. Industry veterans called it madness. How could you build audience anticipation without weekly episodes? How would you generate sustained buzz? Netflix didn’t care. They understood something the old guard didn’t. Viewers wanted control over their entertainment experience. Binge-watching became the new normal practically overnight. Data was next. While studios were still greenlighting shows based on gut feelings and focus groups, Netflix was crunching viewing patterns, completion rates, and user behavior with algorithmic precision. They didn’t just recommend what you might like but started creating shows specifically designed to hit your psychological triggers. “The algorithms told us people love Kevin Spacey, political dramas, and David Fincher,” they essentially said, “so let’s make House of Cards.” It worked.
Netflix also pioneered the global content strategy when everyone else was still thinking locally. They started investing heavily in international productions like “Money Heist” and “Squid Game” years before competitors realized that subtitles weren’t audience kryptonite. Now every studio is scrambling to replicate their international success. The pattern is always the same: Netflix spots a technological or cultural shift brewing, makes an aggressive bet that seems crazy at the time, weathers the initial backlash, then watches as the entire industry eventually follows their lead. They’ve turned being uncomfortably early into an art form.
So when Netflix quietly slips AI-generated footage into a production, it’s not really surprising. It’s just the latest chapter in their playbook of calculated disruption.
Then, there’s a stark financial reality that’s reshaping Hollywood’s entire economic model. The streaming wars have turned content creation into an expensive arms race, and the bills are coming due. The numbers tell the story. Netflix spent $17 billion on content in 2022, but even that massive investment couldn’t prevent subscriber growth from stalling. Meanwhile, traditional VFX costs have spiraled out of control. The average CGI budget for US films hit $33.7 million per movie by 2018, and it’s only gotten worse. When a single minute of high-end visual effects can cost tens of thousands of dollars, studios are desperately seeking alternatives. Netflix’s building collapse scene represents a proof of concept for massive cost reduction. The 10x speed improvement Ted Sarandos touted translates directly to bottom-line savings. Industry analysts estimate that widespread AI adoption could slash production costs by 10% across the media landscape, with TV and film seeing reductions as high as 30%. All while expanding creative possibilities. Previously, ambitious visual sequences were often scaled back or scrapped entirely due to budget constraints. AI will allow even modest productions to achieve spectacular results. Independent filmmakers who could never afford traditional VFX pipelines can now compete with studio productions.
The Industry’s Mixed Reactions
The response to Netflix’s AI revelation has been a masterclass in Hollywood doublespeak. Publicly, most studios are maintaining carefully crafted silence or offering measured statements about “responsible AI development.” Privately, it’s a different story entirely. Disney’s approach perfectly captures the industry’s schizophrenia. While the entertainment giant filed a landmark lawsuit against AI company Midjourney just months ago, alleging the creation of a “bottomless pit of plagiarism,” sources within the studio suggest they’re quietly running their own AI experiments. It’s the corporate equivalent of condemning something in public while testing it behind closed doors.
Warner Bros Discovery has been slightly more transparent, with executives acknowledging they’re “exploring AI applications” but emphasizing their commitment to “protecting creative talent.” Translation: they’re interested but terrified of union backlash. The 2023 Hollywood strikes are still fresh wounds, and no studio wants to be the poster child for AI-driven job displacement. The visual effects community’s reaction has been particularly telling. Others are more defiant, with some calling for boycotts of AI-assisted productions. Union leaders are walking a tightrope. The Writers Guild secured protections against AI in their contracts, but those agreements don’t extend to VFX workers who remain the most vulnerable to AI displacement. The International Alliance of Theatrical Stage Employees has issued cautious statements about “monitoring developments” while privately scrambling to figure out how to protect members whose jobs could be automated overnight.
Perhaps most interesting are the reactions from smaller studios and independent filmmakers. While major studios dither, indie producers are quietly celebrating. AI-generated VFX could democratize high-end visual effects, allowing small-budget films to compete with blockbuster spectacle. “This levels the playing field,” one independent producer told Variety anonymously. International markets are responding differently too. European studios, bound by stricter copyright laws, are taking a more cautious approach. Meanwhile, Asian production companies, particularly in South Korea and India, are reportedly embracing AI tools more aggressively.
We’re Just Entering the Era of AI Generated Content
Just three years ago, AI content generation was primarily the domain of curious. Today, we’re witnessing the technology’s ascent into corporate boardrooms and Hollywood production studios. The progression has been remarkably swift. First came AI-generated images through platforms like DALL-E and Midjourney, which allowed anyone to create artwork by simply typing descriptions. Then text-to-video models like Runway, Kling, and OpenAI’s Sora emerged, enabling users to generate short video clips from written prompts. The technology works by training neural networks on massive datasets of existing content, learning patterns and relationships that allow them to generate new material that mimics human-created work.
Independent filmmakers quickly seized on these tools. Director Ascanio Malgarini spent a year creating “Kraken,” an entirely AI-generated short film, describing the process as more like documentary editing than traditional filmmaking. He assembled “vast amounts of footage from different sources” rather than directing precise shots, highlighting both the technology’s potential and its current limitations.
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The applications have expanded far beyond entertainment. AI companions powered by large language models are providing personalized conversations for millions of users. Virtual influencers generate social media content around the clock. Marketing agencies are producing entire advertising campaigns using AI-generated visuals and copy. What makes this moment particularly significant is the scaling effect. As Netflix’s “El Eternauta” demonstrates, what began as consumer-grade experimentation is now sophisticated enough for professional production use.
The applications have expanded far beyond the video industry. For example, AI companion services are integrating video generation capabilities, allowing users to generate videos of their virtual companions. Debate all you want if this is ethical or not, but that’s the reality.
Will Others Folow?
The answer to whether other studios are following Netflix’s lead is both yes and no. The economic pressures are too compelling to ignore. Industry sources indicate that Disney, Warner Bros, and Universal are all running AI tests, despite their public hesitancy. The difference is approach. While Netflix moved fast and announced it proudly, competitors are taking a more cautious path, likely waiting to see how audiences and regulators respond to Netflix’s pioneer move. The economic pressures are too compelling to ignore. The global text-to-video AI market, projected to reach £1.33 billion by 2029, represents a fundamental shift in how entertainment economics work. Smaller studios and independent filmmakers are already embracing the technology more openly, seeing it as their chance to compete with big-budget productions. Netflix may have opened the floodgates, but the water is still rising slowly. The revolution is coming if you ask us.
Chief editor of Side-Line – which basically means I spend my days wading through a relentless flood of press releases from labels, artists, DJs, and zealous correspondents. My job? Strip out the promo nonsense, verify what’s actually real, and decide which stories make the cut and which get tossed into the digital void. Outside the news filter bubble, I’m all in for quality sushi and helping raise funds for Ukraine’s ongoing fight against the modern-day axis of evil.
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