NETFLIX’S recent use of generative artificial intelligence (AI) to create a building collapse scene in the sci-fi show El Eternauta (The Eternaut) marks more than a technological milestone. It reveals a fundamental psychological tension about what makes entertainment authentic.
The sequence represents the streaming giant’s first official deployment of text-to-video AI in final footage. According to Netflix, it was completed 10 times faster than traditional methods would have allowed.
Yet this efficiency gain illuminates a deeper question rooted in human psychology. When viewers discover their entertainment contains AI, does this revelation of algorithmic authorship trigger the same cognitive dissonance we experience when discovering we’ve been seduced by misinformation?
The shift from traditional CGI (computer-generated imagery) to generative AI is the most significant change in visual effects (VFX) since computer graphics displaced physical effects.
Traditional physical VFX requires legions of artists meticulously crafting mesh-based models, spending weeks perfecting each element’s geometry, lighting, and animation. Even the use of CGI with green screens demands human artists to construct every digital element from 3D models and program the simulations. They have to manually key-frame each moment, setting points to show how things move or change.
Netflix’s generative AI approach marks a fundamental shift. Instead of building digital scenes piece by piece, artists simply describe what they want and algorithms generate full sequences instantly. This turns a slow, laborious craft into something more like a creative conversation. But it also raises tough questions. Are we seeing a new stage of technology — or the replacement of human creativity with algorithmic guesswork?
El Eternauta’s building collapse scene demonstrates this transformation starkly. What would once have demanded months of modelling, rigging, and simulation work has been accomplished through text-to-video generation in a fraction of the time.
The economics driving this transformation extend far beyond Netflix’s creative ambitions.
The text-to-video AI market is projected to be worth £1.33 billion by 2029. This reflects an industry looking to cut corners after the streaming budget cuts of 2022. In that year, Netflix’s content spending declined 4.6%, while Disney and other major studios implemented widespread cost-cutting measures.
AI’s cost disruption is bewildering. Traditional VFX sequences can cost thousands per minute. As a result, the average CGI and VFX budget for US films reached $33.7 million (£25 million) per movie in 2018. Generative AI could lead to cost reductions of 10% across the media industry, and as much as 30% in TV and film. This will enable previously impossible creative visions to be realized by independent filmmakers — but this increased accessibility comes with losses too.
The OECD reports that 27% of jobs worldwide are at “high risk of automation” due to AI. Meanwhile, surveys by the International Alliance of Theatrical Stage Employees have revealed that 70% of VFX workers do unpaid overtime, and only 12% have health insurance. Clearly, the industry is already under pressure.
POWER VERSUS PRECISIONWhile AI grants filmmakers unprecedented access to complex imagery, it simultaneously strips away the granular control that defines directorial vision.
As an experiment, film director Ascanio Malgarini spent a year creating an AI-generated short film called Kraken (2025). He used AI tools like MidJourney, Kling, Runway and Sora, but found that “full control over every detail” was “simply out of the question.”
Malgarini described working more like a documentary editor. He assembled “vast amounts of footage from different sources” rather than directing precise shots.
And it’s not just filmmakers who prefer the human touch. In the art world, studies have shown that viewers strongly prefer original artworks to pixel-perfect AI copies. Participants cited sensitivity to the creative process as fundamental to appreciation.
When applied to AI-generated content, this bias creates fascinating contradictions. Recent research in Frontiers in Psychology found that when participants didn’t know the origin, they significantly preferred AI-generated artwork to human-made ones. However, once AI authorship was revealed, the same content suffered reduced perceptions of authenticity and creativity.
HOLLYWOOD’S AI RECKONINGDevelopments in AI are happening amid a regulatory vacuum. While the US Congress held multiple AI hearings in 2023, no comprehensive federal AI legislation exists to govern Hollywood’s use. The stalled US Generative AI Copyright Disclosure Act leaves creators without legal protections, as companies deploy AI systems trained on potentially copyrighted materials.
The UK faces similar challenges, with the government launching a consultation in December 2024 on copyright and AI reform. This included a proposal for an “opt-out” system, meaning creators could actively prevent their work from being used in AI training.
The 2023 Hollywood strikes crystallized industry fears about AI displacement. Screenwriters secured protections ensuring AI cannot write or rewrite material, while actors negotiated consent requirements for digital replicas. Yet these agreements primarily cover the directors, producers, and lead actors who have the most negotiating power, while VFX workers remain vulnerable.
Copyright litigation is now beginning to dominate the AI landscape — over 30 infringement lawsuits have been filed against AI companies since 2020. Disney and Universal’s landmark June 2025 lawsuit against Midjourney represents the first major studio copyright challenge, alleging the AI firm created a “bottomless pit of plagiarism” by training on copyrighted characters without permission.
Meanwhile, federal courts in the US have delivered mixed rulings. A Delaware judge found against AI company Ross Intelligence for training on copyrighted legal content, while others have partially sided with fair use defenses.
The industry faces an acceleration problem — AI advancement outpaces contract negotiations and psychological adaptation. AI is reshaping industry demands, yet 96% of VFX artists report receiving no AI training, with 31% citing this as a barrier to incorporating AI in their work.
Netflix’s AI integration shows that Hollywood is grappling with fundamental questions about creativity, authenticity, and human value in entertainment. Without comprehensive AI regulation and retraining programs, the industry risks a future where technological capability advances faster than legal frameworks, worker adaptation, and public acceptance can accommodate.
As audiences begin recognizing AI’s invisible hand in their entertainment, the industry must navigate not just economic disruption, but the cognitive biases that shape how we perceive and value creative work.
Edward White is a PhD candidate in psychology at Kingston University.
