Netflix takes on TikTok with AI-powered vertical video

Netflix is giving its mobile app the TikTok treatment.

On Thursday, the streaming giant announced that it will launch a vertical video feed inside its apps this month. The company also revealed deeper ambitions to weave generative AI across both its recommendation engine and Hollywood production pipelines.

Netflix has been experimenting with the vertical format since last year. The goal is simple: help users discover video podcasts, trending shows, and movies through quick, bite-sized vertical snippets.

Upgrading recommendations and buying AI studios

Finding something to watch has long been a chore on streaming platforms. Following last year's rollout of a ChatGPT-powered search, Netflix is revamping its entire recommendation architecture.

Co-CEO Gregory Peters noted during the Q1 earnings call that while Netflix has refined personalization for two decades, new AI model architectures allow the system to iterate faster and support new media formats far more efficiently.

Meanwhile, Netflix is taking AI straight to the director's chair. Last month, it acquired InterPositive, an AI filmmaking company founded by Ben Affleck.

Co-CEO Ted Sarandos emphasized that InterPositive builds proprietary tech specifically for professional filmmakers rather than generic video generation. He argued that great art still requires great artists, but generative tools will help those creators realize their vision much faster.

Big ad targets and a founder's exit

Short-form video is also central to Netflix's growing ad business. The company plans to use AI to build customizable ad formats, targeting $3 billion in ad revenue this year.

Financially, Netflix is on a tear. Q1 2026 revenue hit $12.25 billion, up 16.2% year-over-year, while quarterly profit surged 83% to $5.28 billion. The company wrapped up 2025 with 325 million paying subscribers and implemented a U.S. subscription price hike late last month.

Amid the record numbers, an era is ending: co-founder and chairman Reed Hastings will officially step down from the board this summer.

Why it matters

For viewers, this could finally eliminate endless homepage scrolling. Quick vertical clips let you sample tone and pacing within seconds before committing to a two-hour movie, turning passive browsing into immediate discovery.

For the streaming industry, Netflix is aggressively fighting back against the attention-draining pull of TikTok and YouTube Shorts. Instead of letting third-party platforms capture the discovery phase through unauthorized clips, Netflix is internalizing the funnel. That direct line to 325 million subscribers gives them massive leverage over ad dollars.

We think acquiring InterPositive is a smart PR and technical move. By partnering with industry insiders like Ben Affleck, Netflix signals to Hollywood that it views AI as a creative partner rather than a replacement. The risk, however, lies in brand dilution. If users open Netflix for prestige television and get overwhelmed by noisy vertical feeds and personalized ads, the premium experience could easily feel degraded.