The use of artificial intelligence (AI) in artistic pursuits is proving a hot-button issue for large portions of the artistic community. That is no different for streaming giant Netflix (NFLX), who recently embraced AI in its own right by bringing in the Runway AI toolset. This did not sit well with shareholders, who were apparently opposed to the use of AI in production, as they sent Netflix shares sliding modestly in the closing minutes of Wednesday’s trading.
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For those not familiar with Runway AI, these are tools that allow production studios to speed up some operations, and even may be sufficient to—at least one day—make content without humans being involved in the process. Netflix, according to co-CEO Ted Sarandos, reportedly put the system to work on a series from Argentina, El Eternaut. Runway was used to “…depict a building collapsing.”
However, a separate source said that Runway’s software was not used to create the effect in question. Thus, the exact nature and degree of Netflix’s involvement with Runway is somewhat in doubt. But with Runway, and other such pieces of software, making advances into the field to create visual effects and other materials, it becomes easy to wonder how long before Netflix—or one of its competitors—manages to create a show episode or even feature-length film without the involvement of humans.
A Declining Interest in Games
Another point that investors may not be happy about is Netflix pulling back on the gaming market. It was not so long ago that Netflix was a major force in mobile game development. But lately, the number of games available has been in open decline, which is proving a concern to outside observers.
But Netflix has pulled back from the development of new and original games, reports note, in favor of brand-related tie-ins for its internal properties. Games like Squid Game: Unleashed and Thronglets are all fine and well. But the outside observers who are growing increasingly concerned with Netflix’s game presence—or lack thereof—would likely rather see the original content like Hades and Monument Valley make their comeback.
Is Netflix Stock a Good Buy Right Now?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on NFLX stock based on 26 Buys, 11 Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After an 87.12% rally in its share price over the past year, the average NFLX price target of $1,392 per share implies 18.38% downside risk.
