Netflix revenue grew 17 percent to $11.5 billion in Q3 versus the same period a year earlier, driven by membership growth along with price hikes and an increase in ad revenue. Net profit was up by almost 8 percent for the quarter to $2.5 billion, versus the $2.98 billion that was expected. The quarter was Netflix’s best-ever for ad sales, with that revenue expected to more than double this year over 2024. The new user interface it began rolling out in May is now available to 85 percent of TV devices and the company is beta testing an AI-powered “conversational search experience.”

Netflix is also using AI to test new ad formats and to “localize promotional assets in a variety of languages so titles can more easily travel,” as noted in a shareholder letter. Generative AI “presents a significant opportunity for us to deliver benefits to our members, creators and business,” per the firm.

“Netflix isn’t planning to use generative AI as the backbone of its content but believes the technology has potential as a tool to make creatives more efficient,” TechCrunch writes, noting that “AI has been a contentious topic in the entertainment industry.”

Earlier this month, TechCrunch wrote about Hollywood backlash against a company called Particle6 that is looking for an agent to represent the AI-generated ‘actress’ Tilly Norwood.

“We’re confident that AI is going to help us and help our creative partners tell stories better, faster in new ways,” Netflix co-CEO Ted Sarandos said on the earnings call, adding that “we’re not worried about AI replacing creativity, but we’re very excited about AI creating tools to help creativity.”

This week, Netflix merged two VFX groups it owns under one entity, Eyeline, which has units dedicated to the production application of generative AI and the development of new AI tools. The company is, he said, “investing in what we believe delivers value for creators and members alike.”

Co-CEO Greg Peters said on the call that the ongoing investment in games — now including multiplayer party games — is “more about interactivity broadly. How does interactivity become complementary to linear storytelling? How is it able to unlock whole new entertainment experiences?”

An example cited by The Verge is “real-time voting, which Netflix is currently testing with ‘Dinner Time Live with David Chang’ and plans to use with its live ‘Star Search’ revival in January.”

“Shares of Netflix are up nearly 40 percent since the start of the year,” reports The Wall Street Journal, noting that as “traditional media companies are grappling with cord-cutting and a tricky transition to streaming, Netflix … has continued to gain ground.”

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