Netflix ramps up AI use for crowd scenes as stock struggles

AI as a production tool

The second co-CEO, Greg Peters, highlighted the strategic importance of live broadcasts. "So lockten Live-Übertragungen überdurchschnittlich viele Neukunden an, während sie insgesamt nicht so viele Zuschauer hätten wie anderes Programm," Peters explained. Live events are thus considered an important tool for attracting new subscribers, even if they do not achieve the highest overall viewership numbers.

Bottom line, profit grew by 8.8 percent to $3.4 billion, while revenue in the past quarter rose 13 percent year-over-year to $12.56 billion (€10.98 billion). However, the forecast for revenue in the current quarter fell short of average analyst expectations, which spooked investors.

Quarterly figures and disappointing outlook

The share price fell by around nine percent in after-hours US trading. The Netflix stock had already lost more than 40 percent of its value over the past months. The market is meanwhile doubting how well the streaming leader can retain viewers.

One reason for the skepticism is market researcher data that created the impression that viewership figures decline from the second season onward, even for popular Netflix series. Sarandos countered that the declines between the first and second seasons had actually narrowed compared to the previous year. Netflix management also argues that there is not necessarily a direct correlation between the number of hours customers spend in front of the screen and revenue.

Less data, more skepticism

Netflix no longer provides regular information on its customer numbers, and the video streaming market leader plans to publish figures on the popularity of its films and series only once a year going forward, rather than twice a year. This reduced transparency is causing additional uncertainty among some investors.

In February, Netflix had received $2.8 billion from Warner as a contractual penalty following the termination of the already agreed-upon acquisition. This caused the streaming market leader's tax payments to rise somewhat in the past quarter. Netflix had lost the bidding war for Warner to rival Paramount.

Warner penalty payment and failed acquisition

The failed Warner deal was seen by some investors in this context as a leap forward aimed at securing its own offering through acquisitions. With the use of AI in productions and the focus on live broadcasts, Netflix is now attempting to strengthen growth organically and reinforce the loyalty of existing subscribers.