In the five years since Netflix distributed Martin Scorsese’s award-winning film The Irishman, AI has driven down virtual effects (VFX) dramatically.

The Irishman’s producers and VFX partners Industrial Light and Magic (ILR) used cutting edge technology to “de-age” Robert De Niro and Al Pacino; even creating a short documentary on how they did that, back in 2020.

But according to Netflix CEO Ted Sarandos on April 17, 2025, AI has evolved so much that the Irishman’s cinematographer Rodrigo Prieto, who is now directing his first feature film for Netflix called “Pedro Paramo”, was “able to deliver this de-aging VFX to the screen for a fraction of what it costs on The Irishman. In fact, the entire budget of the film was about the VFX costs on The Irishman,” Sarandos said on a Netflix earnings call. 

Responding to a question on how AI is transforming the film production industry, the CEO said: “Traditionally, only big-budget projects would have access to things like technical – advanced visual effects such as de-aging. 

“So, today you can use these AI-powered tools so to enable smaller budget projects to have access to big VFX on screen… our focus is simple, find ways for AI to improve the member and the creator experience...”

Netflix is also starting to use generative AI to improve its recommendation engine, co-CEO Greg Peters said: “Last year we began testing a new simpler, more intuitive TV home page. This is something that we hadn't made big structural changes to in over a decade. And we believe that, that will significantly improve the discovery experience on Netflix… we're also building out like new capabilities, an example would be interactive search. That's based on generative technologies.”

(Netflix’s engineers have earlier detailed how they use sparse attention techniques such as low-rank compression to let their AI models extend context window to several hundred events while maintaining computational efficiency: “This enables it to process more extensive interaction histories and derive richer insights into long-term preferences” whilst so-called “Sliding Window Sampling” lets the team sample overlapping windows of interactions during training that “ensures the model is exposed to different segments of the user’s history over multiple epochs, allowing it to learn from the entire sequence without requiring an impractically large context window,” its engineers blogged last month.)

The comments came as Netflix reported quarterly revenues of $10.54 billion for its fiscal Q1, with net income jumping to $2.89 billion; up over a billion on the previous quarter. Forrester’s VP research director Mike Proulx noted however that “Although Netflix last year shared that starting this quarter, it would no longer report subscriber metrics, the reality of that datapoint’s loss set in today. By no longer reporting this, it’s not possible to get a full picture of the health of Netflix’s business. 

“While revenue growth is what ultimately matters, it’s affected by several factors including price increase, which is partly why Netflix beat guidance expectations this quarter.  Netflix’s live programming strategy, especially sports, is paying off… creates promotional buzz, drives tune-in, and attracts advertisers. Given this, it makes a lot of sense to expand its live programming to other countries, as long as it doesn’t come at the expense of its nascent US efforts which have a lot more runway to grow.”

Netflix highlighted its extensive investment in the UK on the call, noting that since 2020, it has invested “over $6 billion in the UK creative community and we operate a dedicated production hub, featuring 20 sound stages, workshops and office space at Shepperton Studios, five additional stages at Longcross Studios and three at Uxbridge. Over the past four years, we’ve worked with more than 50,000 cast and crew members, and expect to be in production with more than 100 productions in the UK this year,” as a press release on its Q1 earnings said.

 

The link has been copied!