If Hollywood resolved racial inequalities in the film and TV industry, annual revenue could increase 7%, or about $ 10 billion, according to the findings of a new McKinsey study.
The consulting firm’s research found that stories led by blacks are underfunded and underestimated.
“A complex and interdependent value chain full of dozens of hidden barriers and other weaknesses reinforces the racial status quo in the industry. Based on our research, we have cataloged some 40 specific pain points that black talent regularly encounters when trying to build 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, led the consulting giant to undergo this study last June.
“I spoke to some of my former colleagues and said that if you are interested in studying racial inequality, one place where you can do that is Hollywood,” said Leonard. “Mainly because not only does this economic inequality exist within our industry, but we also export and expand stories around the world, which also have material effects on the lives of blacks and people around the world.”
Administrative staff in the film and TV industry are disproportionately white. Ninety-two percent of all film executives 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 transportation / travel, with 87% whites, according to the report.
And while the population of the United States is about 13.5% black, the report concludes that 6% of Hollywood film writers, directors and producers are black, while 8% have at least one black producer.
McKinsey said there are important barriers to entry, including the fact that entry-level entertainment jobs often offer low or no pay. The survey points out that jobs in industry tend to be shared among small, predominantly white, elite networks.
Another challenge is prejudice – both unconscious and evident.
“We have an extraordinarily talented black community in Hollywood and they are doing an extraordinary job,” said Leonard. “You have to imagine what they would be capable of and what Hollywood would be capable of if we really removed these obstacles and allowed everyone to participate at a level compatible with their ability and, frankly, compatible with their ability to generate a return on investment.”
Leonard said he was “more shocked” by the figures for return on investment.
“Black content, despite being underfunded, under-supported and under-distributed, still offers a better ROI of around 10%,” he said.
To help level the playing field, the study recommends that studios adopt transparency and accountability in their own ranks and expand recruitment to state schools and historically black colleges and universities. This can be done with the help of a third party organization.
Leonard noted that the potential $ 10 billion in revenue that could be derived from diversity efforts is specifically linked to under-representation of black talent and executives. The total opportunity is significantly greater than if other underrepresented minorities are also added.