In a move that highlights the growing impact of artificial intelligence (AI) in Hollywood, Netflix has included generative AI as a potential risk factor in its annual report filed with the SEC. This addition reflects the recognition of AI’s disruptive potential in the industry.
Evolution of Technological Developments
Netflix’s 10-K report, submitted recently, now includes a section on video competition that addresses the rapid evolution of new technological developments, specifically generative AI. The report states that if competitors gain an advantage by leveraging such technologies, Netflix’s ability to effectively compete and its overall performance could be adversely affected.
Uncertain Intellectual Property Protection
Furthermore, the report acknowledges that the use and adoption of emerging technologies may increase Netflix’s exposure to intellectual property claims. It highlights the uncertainty surrounding copyright and other intellectual property protection for AI-generated material.
Impact on WGA and SAG-AFTRA
While these changes may seem small, they reflect the broader implications of AI in the creative industry. The issue of AI usage by studios became a major concern for the Writers Guild of America (WGA) and the Screen Actors Guild-American Federation of Television and Radio Artists (SAG-AFTRA) during the 2023 strikes. The unions negotiated agreements that address the use of generative AI, with safeguards in place to protect their members’ work.
Scrutiny on Netflix
During the writers’ strike, Netflix faced scrutiny from striking union members due to a job listing for a product manager role in its machine-learning group. Despite the listing’s focus on AI developments for content personalization and payment-processing systems, the union members expressed concerns about the broader implications of AI in the industry.
Netflix’s acknowledgment of generative AI as a risk factor in its annual report demonstrates the company’s understanding of the potential challenges posed by emerging technologies. As AI continues to shape the entertainment landscape, it is crucial for industry players to navigate its impact responsibly.
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