Report: Inclusion gap costs Hollywood $10B a year

Hollywood's shortcomings in representing Black voices on and off camera cost the film and television industry $10 billion in annual revenue, according to a new report from consulting giant McKinsey & Co.

The study, released Thursday, examines the persistent gaps in inclusion for Black talent and filmmakers, coming after a year when criticism of the industry's diversity problems were revived by nationwide protests against police brutality and institutional racism. Read the full report here.

McKinsey & Co. based its analysis on existing research by institutions including UCLA, Nielsen and USC's Annenberg Inclusion Initiative and conducted anonymous interviews with 50 Black and non-Black industry participants. It collaborated with the BlackLight Collective, a coalition of Black leaders, artists and executives working in entertainment.

Studios routinely acknowledge that inclusion is good for business. Walt Disney Co. is making a "Black Panther" sequel and a Disney+ series set in the world of Wakanda from Ryan Coogler, for example.

But the industry has strides yet to make, according to the research, and that means it's leaving money on the table.

By addressing racial inequities, the report said, the industry could generate an added $10 billion in revenues a year, up 7% from the baseline of $148 billion generated in sales from global theatrical box office for U.S. films and revenues from U.S. streaming services and cable and broadcasting in 2019. The assessment excludes sports and unscripted programming.

"If anything, executives should aspire for even higher upside, including from diversity across all underrepresented groups, as audiences become more diverse and the growth in demand for diverse content far outstrips supply growth," the report's authors wrote.

While supporting casts for films were 14% Black from 2015 to 2019, just 11% of leads and co-leads were, compared to the 13.4% of the U.S. population.