Netflix(NASDAQ: NFLX) let go of its Warner Bros. Discovery(NASDAQ: WBD) buyout attempt this week, and there was much rejoicing. The company isn’t giving up on buyout ideas as a whole, though. A small part of the $2.8 billion breakup fee is already going into a much smaller deal.
In news that sounds like a mad lib, Netflix just acquired an artificial intelligence company founded by the featured construction worker from Good Will Hunting. The company is called InterPositive, named after an old-school film preparation technique. Ben Affleck started it in 2022, and nobody really knew it existed until Thursday.
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InterPositive builds artificial intelligence (AI) tools for filmmakers. Its tools can fix lighting mistakes, fill in missing shots, replace backgrounds, and so forth. The focus is on adding AI smarts to the technical grunt work of production, not generating fake actors or writing scripts. Affleck and his team train their models on a closed soundstage using footage they control, which is a very different approach from scraping the entire internet and hoping for the best.
Directors can also upload their own dailies to customize the InterPositive tool for a specific project. It’s less “AI makes your movie” and more “AI handles the stuff you’d rather not spend three hours fixing in post-production.”
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Affleck has been publicly interested in AI for a while, but more in a “this could help indie filmmakers” approach than a “robots will replace us all” way. From a conference presentation in 2024:
“What AI is going to do is going to disintermediate the more laborious, less creative and more costly aspects of filmmaking that will allow costs to be brought down, that will lower the barrier to entry, that will allow more voices to be heard, that will make it easier for the people who want to make Good Will Huntings to go out and make it.”
You know, like the digital video editing tools that launched millions of online video dreams with platforms such as TikTok, YouTube, and Instagram. Affleck’s company wanted to play a production-side part in the next era of simplified video creation.
Affleck is already deep in the Netflix ecosystem. His production company, Artists Equity, signed a first-look deal with the streamer last Monday, and his next directorial project (Animals, starring himself, Kerry Washington, and Gillian Anderson) lands on Netflix later this year. Now, he’s also a senior advisor. That’s a lot of Affleck.
For Netflix, this is acquisition No. 2 in three months after buying avatar platform Ready Player Me in December. The Warner Bros. bid doesn’t count, since that massive deal is dead. The company has traditionally preferred to build rather than buy, so the multiple buyout swings are worth noting.
AI is still a four-letter word in Hollywood, even when award-winning actors/directors/screenwriters are involved.
The 2023 strikes were partly about this stuff, and tensions haven’t fully cooled. Netflix is clearly trying to thread the needle here; every quote in the announcement emphasizes “creator control” and “human judgment” and “expanding creative freedom.” I’m on Affleck’s side, since I’m convinced that human input is required in order to make something good with AI tools.
Whether the industry buys it remains to be seen.
Either way, Netflix is finding creative uses for its spare cash. Even if this deal is a rounding error in Netflix’s financials, there would have been no room for it under the crushing debt load Netflix would have required to pay for Warner Bros. Discovery.
Netflix leveraged the Warner Bros. breakup fee to pay an undisclosed sum for a small AI company run by a movie star who is now advising the streaming giant on technology while also directing films for it and running a production company with a first-look deal there. Sorry about the run-on sentence, but it makes the point. Hollywood is a small town.
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Anders Bylund has positions in Netflix. The Motley Fool has positions in and recommends Netflix and Warner Bros. Discovery. The Motley Fool has a disclosure policy.
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