New Study Finds Undervaluing Of Black-Led Projects Costs Hollywood $10 Billion Annually

When it comes to diversity, inclusion and representation, Hollywood is far from where it needs to be, but we are seeing progress. However, there are many blind spots that have been overlooked and cracks in the foundation that are growing bigger and bigger each day. If it doesn’t fix them, the industry will have more problems than it can repair — one of them being the undervaluing of Black-led projects.

McKinsey & Company released a study about the film and TV industry that is both not that surprising but is very eye-opening when it comes to the work that needs to be done to achieve equality in front of and behind the camera. The research is the first integrated view of the data and reveals the many barriers that Black talent encounters across the film and TV-production ecosystem. It also shines a light on the economic impact of those inequities and offers solutions to bolster inclusivity.

The company analyzed data on more than 2,000 films and interviewed dozens of industry professionals, including writers, directors, producers, agents, actors, and executives, and collaborated with the BlackLight Collective, a coalition of Black executives and talent in the industry, including Franklin Leonard of The Black List. Data from Variety Business Intelligence was also included in the study.

The research found that media and entertainment make up a bedrock industry with revenues of nearly $150 billion each year. That said, Hollywood has the potential to gain an additional $10 billion in annual revenues — which amounts to nearly 7% more than its baseline — by addressing the racial inequities. Specifically, McKinsey found that Black-led projects have been consistently underfunded and undervalued even though there has been evidence that is clear as day that they outperform other properties when it comes to a return on their investment. This aligns with a report from the UCLA-based Center for Scholars and Storytellers titled “Beyond Checking A Box: A Lack of Authentically Inclusive Representation Has Costs at the Box Office” that was released in October 2020.

In addition, the term “representation matters” continues to ring true on-screen and behind the scenes. Black talent is underrepresented across the industry particularly in off-screen roles such as producer, director and writer. The one caveat here is that there is significant representation in these roles if at least one senior member of the production is Black. Other than that, Black talent behind the camera has not improved over the past 15 years.

Looking at positions of creative control, the research shows that less than 6% of Hollywood films’ writers, directors, and producers are Black.

When it comes to the talent in front of the camera, the study found that up and coming Black actors receive significantly fewer chances to make their mark in leading roles than white actors. In their first 10 years of work, emerging Black actors get an average of 6 leading roles, while their white counterparts get 9.

McKinsey also unpacks the concept of the “Black tax”, a fee that Black professionals in film and TV often need to pay. This “tax” can be considered literal or a metaphor where Black professionals have to fight — or pay out of pocket — for what others can take for granted, or needing to advocate for greater racial equity on their own. This is an unfair burden that falls in the lap of Black talent or creatives who could otherwise be honing their craft and focusing on their own careers.

At the top of the Hollywood food chain, there is a severe underrepresentation of Black people in decision-making and leadership roles. Black professionals hold few executive C-suite roles throughout the industry. For context, the study found that 87% of TV executives and 92% of film executives are white. The film industry, in particular, remains disproportionately white, ranking last among industries and behind sectors such as energy and finance. To add to that, the agents and executive staff at the industry’s top three talent agencies were about 90% white — and the partners at these agencies were 97% white.

In order to drive change, break down hidden barriers that reinforce the racial status quo in the problematic Hollywood ecosystem, McKinsey offered four steps that streaming companies, studios, agencies, and other industry players can take to advance racial equity in entertainment and beyond. For one, companies need to ensure diverse representation — especially among off-screen talent and executives. Secondly, there needs to be an increase in transparency and accountability. Third, these companies need to seek and financially support a wide range of Black stories. And finally, these institutions must collaborate and create an independent advocacy organization to coordinate action across the ecosystem.

To read the full McKinsey study click here.

This article originally appears on on March 10, 2020.

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