Lack of Black Representation Costs Hollywood an Estimated $10 Billion Each Year

By excluding Black talent and failing to tell stories that represent all parts of society, Hollywood may be losing up to $10 billion a year. 

That finding is just one of the discoveries revealed in an enlightening new report from management consulting firm McKinsey & Company. It’s the first time the group turned its focus to lack of representation in Hollywood.

According to Nicole Sperling of The New York Times, “the consultants examined multiple existing research reports on thousands of film and TV shows including the “Hollywood Diversity Report” conducted annually by the University of California, Los Angeles; Nielsen’s 2020 “Being Seen on Screen: Diverse Representation and Inclusion on TV”; and annual work by the University of Southern California’s Annenberg Inclusion Initiative.”

McKinsey also partnered with BlackLight Collective, a group of more than 90 Black leaders in the film and television business and conducted dozens of anonymous interviews with studio executives, producers, writers, directors and agents. 

“The goal was to both reflect their experiences and identify the ‘pain points’ as they try to create content,” Sperling reported. “Examples of such obstacles include Black talent being ‘forced to sell stories about personal trauma to get ideas optioned’ and white executives’ stereotypical assumptions about target audiences being ‘valued more than lived experiences of creators.’”

Among the issues in Hollywood that contribute to a lack of diversity on the screen, based on the report’s findings:

  • a sometimes-unfair workforce structure centered around low or unpaid apprenticeships, tight-knit networks and small informal work settings
  • a lack of opportunity with Black creatives being the individuals primarily responsible for the limited opportunities offered to people of color
  • a lack of roles for up-and-coming diverse actors
  • a lack of representation among management and executive boards

Compounding these issues, Sperling said the study also found that “the average production budget for films with a Black lead or co-lead is a quarter less than the budget for films with no Black actors.”

“In the same way that collective action is needed to advance racial equity in corporate America, real and lasting change in film and TV will require concerted action and the joint commitment of stakeholders across the industry ecosystem,” said the study’s authors, Jonathan Dunn, Sheldon Lyn, Nony Onyeador and Ammanuel Zegeye.

To combat the problem, McKinsey recommended that studios, networks, streaming services, agencies and production companies publicly commit to specific levels of representation they want to hit and that those levels should be similar to the current demographic for the U.S. They also encouraged companies to expand recruiting efforts outside of New York and L.A., especially focusing on the South where the majority of the Black labor force is concentrated. Finally, they recommended all entertainment industries significantly increase levels of data transparency, which would allow the public to help hold these organizations accountable for their actions.

“By stifling Black talent throughout the film and TV industry ecosystem — and at every step of the content-development process — Hollywood is leaving at least $10 billion in revenue on the table each year,” the study’s authors wrote. “Achieving racial equity will make the film and TV sector more just and more profitable.” 

“Equally as critical, improving racial equity should prove to be a boon for audiences,” they concluded. “When the on-screen and off-screen representation of Black talent matches the share of Black Americans and when the industry succeeds in dismantling the ubiquitous workplace barriers preventing Black creators from telling a range of stories, viewers of all races will gain access to the many different products of Black creative expression. Ultimately, the reshaping of the film and TV ecosystem will play a role in reshaping ideas on race — and the advancement of racial equity — in America and beyond.”


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