If Hollywood were to address racial inequalities in the film and TV industry, annual revenue could rise by 7% or about $ 10 billion, according to a new study by McKinsey.
The research firm’s research found that stories under black leadership are underestimated and undervalued.
“A complex, interdependent value chain filled with dozens of hidden barriers and other pain points reinforces the racial status quo in the industry. Based on our research, we have cataloged nearly 40 specific pain points that Black talent regularly encounters as they pursue their careers, ‘wrote the authors of the report.
Franklin Leonard, the CEO and founder of The Blacklist, which aims to democratize writers’ access to the entertainment industry, and a former McKinsey employee, encouraged the consulting giant to undertake this study last June.
“I reached out to some of my former colleagues and said that Hollywood, if you are interested in studying racial inequality, is Hollywood,” Leonard said. “Especially because economic inequality not only exists within our industry, but that we carry out and reinforce stories around the world, which also have material consequences for the lives of black people and people around the world.”
The management ranks of the film and TV industry are excessively white. Ninety-two percent of all film directors are white, the report said. McKinsey noted that it is more than any other industry, including finance and energy. The TV industry is slightly more diverse than consumer goods, finance and transport / travel, according to 87% white.
And although the U.S. population is about 13.5% black, the report finds that 6% of the writers, directors and producers of the Hollywood film are black, while 8% have at least one black producer.
McKinsey said there are major barriers to entry, including the fact that entry-level entertainment often offers little or no pay. The research highlights that jobs in the industry are often shared among small, overwhelming white elite networks.
Another challenge is prejudice – unconscious and overt.
“We have an exceptionally talented Black community in Hollywood and they do exceptional work,” Leonard said. “One has to ask yourself what they would be capable of and what Hollywood would be capable of if we removed those barriers and allowed everyone to participate at a level commensurate with their ability, and frankly consistent with their ability to return on investment. ”
Leonard said he was “most shocked” by figures on return on investment.
“Black content, despite being underfunded, supported and under-distributed, still delivers a better ROI by about 10%,” he said.
To help level the playing field, the study recommends that studios accept transparency and accountability across their own ranks, and expand recruitment to state schools and historically black colleges and universities. This can be achieved with the help of a third party organization.
Leonard noted that the potential $ 10 billion windfall that can be achieved through diversity efforts is specifically linked to under-representation of black talent and managers. The total opportunity is significantly greater than the case if other under-represented minorities are added as well.