Should AI Creators License To Netflix Or Game The Algorithms?
Video podcasters license to Netflix for bonus revenue. Emerging generative AI creators face a different choice: guaranteed Netflix fees versus volume strategies across multiple platforms.
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What does a distribution business model look like when Netflix and Paramount Skydance (PSKY) seek “more content” from creators?
The distribution model seems straightforward in Netflix’s decision to license video podcasts: These are added to the platform and monetized both through existing subscription plans and advertisements on the lowest cost Standard with Ads plan.
This is also an optimal outcome for video podcasters: They are already monetizing on YouTube and Spotify. Netflix licensing is additional revenue for the same content.
Creators producing studio-quality, generative AI video stories are an emerging alternative for “more content”. But these creators face a different calculation than simply licensing.
They produce studio-quality fictional content at 5-10% of traditional media production costs. They could license it to Netflix for upfront fees and platform exposure, a mutual bet that quality storytelling wins with Netflix’s curation and subscriber base.
Or they could leverage AI’s production speed to pursue volume strategies: produce massive amounts of this content and distribute across multiple platforms worldwide, leveraging AI tools to translate the content into different languages. They can monetize this content with a mix of business models including YouTube ads and memberships, Patreon subscriptions, or emerging models like gamified video-on-demand.
In this model, creators capture revenue wherever they can find it—monetizing from many sources rather than one licensing deal. Because global distribution offers extraordinary scale, the “long tail” of returns on these AI-generated videos could potentially add up to amounts competitive with or exceeding what Netflix or PSKY offer.
This presents an emerging tension as both production and distribution models are “flattened”: The creator base has expanded from a few skilled professionals to anyone with internet access, and any content creator can game YouTube, TikTok, Instagram and other algorithms to find new audiences.
In this new marketplace, does good storytelling need Netflix curation or PSKY’s longstanding relationships with advertisers? Or can AI’s production speed enable algorithm gaming and volume strategies that make open platforms more lucrative?
The answer depends on whether curation or optimization wins—and nobody knows yet.
The Ambiguity of Algorithms
Will YouTube’s and other social media platforms’ algorithms reward generative AI content for good storytelling?
I previously shared a prediction from Samir Chaudry of the YouTube creator duo Colin and Samir that suggests the answer is yes:
“The best creators will use [artificial intelligence (AI) to make sure human audiences connect with the best storytelling. Those at risk will be those who don’t know how to tell a story.”
