The growing influence of artificial intelligence and its potential to bring disruptive changes to Hollywood has forced Netflix to raise a warning against the new technology. In its annual report filed with the SEC, the US streaming giant has added generative AI to its list of risk factors.

Read what Netflix has to about AI

In a recently filed report (seen by Variety), Netflix added a new part to its section about risk factors in the section about video competition.US companies are required to outline these risk factors under SEC rules.
The company said: “New technological developments, including the development and use of generative artificial intelligence, are rapidly evolving. If our competitors gain an advantage by using such technologies, our ability to compete effectively and our results of operations could be adversely impacted.
In addition, the use or adoption of new and emerging technologies may increase our exposure to intellectual property claims, and the availability of copyright and other intellectual property protection for AI-generated material is uncertain.”

What Netflix removed from its risk factor section

Apart from the AI warning, the remaining risk factors of Netflix in 2023 remained the same. However, the company removed a part from the report which was mentioned in the 2022 report. The part about the risks posed by the Covid pandemic (also present in the report of 2020 and 2021) was removed from the latest report.

This part said: “The ongoing coronavirus (COVID-19) pandemic disrupted our business, increased our costs, led to delays in content releases and may again impact our business and results of operations.”

How AI disrupted Hollywood in 2023

In 2023, two Hollywood unions, WGA and SAG-AFTRA, went on strike as studios started using AI for their productions. The members of the union were concerned about the technology hurting their livelihoods.
During the writers’ strike, Netflix’s job listing for a product manager in the company’s machine-learning group with a salary range of between $300,000 and $900,000 was also criticised by the writers. Striking union members protested against Netflix’s posting, even though this job centred on AI developments for content personalisation and optimising payment-processing systems, not for generative AI-based projects.
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