If Hollywood tackled racial inequality in the film and TV industry, annual revenues could rise 7%, or about $ 10 billion, according to the findings of a new study from McKinsey.
The consulting firm’s research found that Black-led stories are underfunded and valued.
“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 cataloged nearly 40 points. a particular pain that Black talent constantly encounters as they try to build their careers, ”the report’s authors wrote.
Franklin Leonard, CEO and founder of The Blacklist, which aims to democratize writers’ access to the entertainment industry, and a former McKinsey employee, led the consulting giant to undergo this review last June.
“I reached out to some of my old colleagues and said that if you’re interested in exploring racial inequality, Hollywood is one place you can do it,” Leonard said. unique in that not only does that economic inequality exist within our industry, but we spread and extend stories around the world, that also has an impact important to the lives of black people and people all over the world. “
The regulatory standards of the white film and TV industry are uneven. Eighty-two percent of filmmakers are white, the report said. McKinsey noted that this is more than any other industry, including finance and energy. The TV industry is slightly more diverse than consumer goods, finance and transport / travel, at 87% white, according to the report.
And while the U.S. population is around 13.5% Black, the report finds that 6% of Hollywood film writers, directors and producers are black, and 8% have at least one Black producer. .
McKinsey said there are key barriers to entry, including that entry-level entertainment jobs often offer low or no pay. The research confirms that business operations are often shared among small white-collar networks.
Another challenge is bias – both unconscious and open-minded.
“We have a very talented black community in Hollywood and they’re doing an amazing job,” Leonard said. “We need to think about what their potential would be and what Hollywood would be capable of if we really took off. these barriers and allow everyone to participate at a level commensurate with their potential, and in reality equal to their ability to deliver a return on their investment. ”
Leonard said he was very surprised by the numbers in terms of investment returns.
“Black content, despite being underfunded, underpinned, undercirculated, still delivers a better ROI by around 10%,” he said.
To help level the field, the study recommends that studios adopt transparency and accountability about their own standards, and extend recruitment to state schools and historically black colleges and universities. This could be achieved with the help of a third party organization.
Leonard noted that the potential $ 10 billion windfall from diversification efforts is tied primarily to an underrepresentation of Black talent and executives. The overall opportunity is much greater if under-represented minorities are also added.