Hollywood embracing diversity could boost revenue by $10 billion

Black-led projects have been un­derfunded and undervalued, despite often providing a better return on investment, McKinsey & Co said in a report on Thursday

Black talent is underrepresented across the film and television industry, and it’s costing Hollywood billions.

So says McKinsey & Co, which found consumers might spend as much as $10 billion more, or an additional 7 per cent, if film and TV projects were more racially diverse. Black-led projects have been un­derfunded and undervalued, despite often providing a better return on investment, it said in a report on Thursday.

“Executives should aspire for even higher upside as audi­e­n­ces become more diverse and the growth in demand for diverse content far outstrips supply growth,” said the report.

Hollywood studios have for years produced films and shows that disproportionately cast White men. Netflix, the world’s biggest streaming service, is making some headway at diversifying Hollywood, but it’s still got a ways to go, particularly behind the camera. And the Hollywood Foreign Press Association, which puts on the TV awards show the Golden Globes, has been criticised for its lack of diversity.

Some progress has been made across Hollywood in recent years in terms of diversity in on-screen talent. But the prominence of some high-profile films and TV shows with Black leads doesn’t change the fact that Black talent is still largely underrepresented, according to the research.

Films with two or more Bla­ck professionals in off-screen creative roles — like producer or director — receive budgets that are over 40 per cent lower than others, McKinsey found. But those pr­o­jects make 10 per cent more in box-office revenue per dollar invested in distributing and ad­vertising than films with one or no Black crea­tive professionals.