Greg Peters, Netflix co-CEO: ‘People misunderstand how AI will influence content creation’

Netflix is expanding its footprint in Latin America. The streaming giant opened its new regional office in Mexico just weeks after premiering a location in São Paulo, Brazil and is preparing another headquarters in Buenos Aires, Argentina. Greg Peters, who has been the company’s co-CEO (along with Ted Sarandos) since January 2023, came to the Mexican capital looking to emphasize Netflix’s local commitment. The company employs around 400 people in the area, and plans to increase that by 15% by the end of 2026. The company says its new Mexico City offices are meant to serve as a creative center for the Mexican audiovisual community.

In contrast with Reed Hastings, Netflix’s founder, and Sarandos, Peters — who studied physics and astronomy at Yale — tends to have a more technological and corporate point of view. His role has been to expand the conversation around Netflix, which has gone from being solely a film and series platform to becoming a source for video games, live events and even long-form video podcasts.

Netflix, which has 325 million subscribers worldwide, is currently immersed in a battle for the future of Hollywood. The corporation extended an all-cash offer of $83 billion to buy Warner Bros, but this week announced it was backing away from the deal.

Recently, a 15-second fragment of a fight between Brad Pitt and Tom Cruise created with Seedance, an artificial intelligence tool developed by ByteDance, the owner of TikTok, has provoked waves of terror in the entertainment industry as a reminder of the immense risks being posed to an industry that is changing at top speed.

Question. Have you seen the fight video?

Answer. It’s impressive that the technology is getting to that point. I also thought that it’s not at the quality bar that we would seek, and it’s not a story. That might be the most important thing. I think people misunderstand how AI will influence content creation. The ability to tell a story very, very well consistently is a very scarce human characteristic. And you can have a bunch of AI that can make actors that you recognize fight, but if you don’t have great storytelling, it doesn’t really matter, at the end of the day.

Q. That fragment reminds us how quickly technology is changing. The first version of Seedance came out just eight months ago.

A. I think that’s a fair point. Relative to other technology advancements that support production, historically, this is going at a much faster velocity. But I also think that there are better tools to support storytellers. They don’t replace storytellers. I’ve not seen a single example of a model kick out a long-form story that I’m like, that is the most amazing thing.

Q. Are you in Mexico to underline your commitment to the country?

A. We’ve been in Mexico for 15 years. We launched with a commitment to bring more stories to Mexican consumers. And then 10 years ago, we did our first local language original outside the United States, Club de Cuervos. About a year ago we committed to [investing] a billion U.S. dollars over three years to support production here. We clearly built this place because we think that we’re going to be growing [here] and having more Netflix employees.

Q. This week, the Mexican government unveiled some highly anticipated fiscal incentives for production. What’s your opinion on them?

A. I think it’s a good model for governments to compete for and encourage production to happen in their local vicinities. That’s recognition of the positive effects of doing production locally. We did an economic study of the total impact of [Netflix movie] Pedro Paramo, which was 375 million pesos, or $21.8 million. We have done many, many campaigns with state tourism bureaus and country tourism bureaus. Expedia, which is one of our advertising partners, essentially does packages now to go see all of the places that were on a certain show.

Q. Did Netflix in some way press for this kind of incentive?

A. No, just to be very clear, our investment commitment is independent of that model.

Q. Could it benefit from these incentives beyond 2029, when your investment commitment ends?

A. I would say we’re generally supportive, because we think it supports the ecosystem. And we rely on a healthy ecosystem. If you generally look at the countries or states that have done these production incentives, they are generally the strongest creative ecosystems, like the U.K.

Q. Will the model bring more Hollywood productions to Mexico?

A. It’s definitely possible. Maybe the most important thing is that there’s incredible infrastructure and creative talent here.

Q. You have widened the conversation around Netflix content, which is no longer limited to series and films. Now, you also do video games and live events. What do you see for the company’s future?

A. The core hypothesis is interactivity, the ability for fans of a certain universe to have a creative space to celebrate their fandom with more agency, more control. That’s going to be an important part of how entertainment evolves. We already see it, right? Younger generations have the expectation that they’re going to have that kind of experience. What we’re trying to do is enable that capability in a way that unlocks value immediately on the same platform. One of the things that we’re most excited about is building a better technology platform to do things like live voting, where the audience participates. You can imagine a game show where you have six players, but then there’s a million people influencing how the game show evolves. It’s not like you’re playing a first-person shooter, but you’re having an influence on how it all evolves.

Q. Sports have also become a launch point for the company in markets like the United States. Can you share a little about that strategy?

A. We focused on the United States first, because usually when we do a new format, you have to build a lot. You have to think about, what’s the right programming strategy, what’s the right product experience, how do you deliver that effectively to consumers? We started that in the United States so that we could build that capacity, but now, we’re bringing it out to different countries. Mexico is one of them. You saw a glimpse of this with the Canelo fight, which had more than 40 million viewers globally.

Q. Will there be more programming like that?

A. This year, we are going to do the Supernova: Genesis event, which will be amazing. We’re going to find more events, some of which will be sports-related, some of which will not. We’re trying to figure out the kind of sports that fit our events strategy. That might not be every match for the whole season, but it might be more. A good example would be FIFA’s Women’s World Cup, which we’re broadcasting in the United States and Canada. That’s a concentrated period of time, with a lot of matches, but it’s in two weeks, and we can tell stories around the actual matches. What are the various teams, what are the rivalries?

Q. Is that a sign you’re looking to obtain the rights to the Men’s World Cup?

A. Those rights are sold for a period of time, right? So you have a window that opens up, depending on the timing. But I would say the fact that we’re doing the Women’s World Cup is sort of indicative of it. We think that it fits our event model.

Q. On last quarter’s shareholder call, you said that there is still room for growth.

A. That’s right. We’re increasing our content budget by 20% this year. We’re also finding more creative, aggressive ways to license. And we’re finding different partnership opportunities that support growth. Those could be with go-to market partners like Mercado Libre, which was just launched here in Mexico, or local broadcasters like TF1 in France, with which we’ve announced a partnership that will go live this summer. We are continuing to go full-speed ahead to bring a really amazing library of content onto the service.

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