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Hollywood’s failure to engage with diverse audiences has proven to be a costly mistake. Over the last four years, McKinsey & Company has produced three separate reports revealing the staggering financial toll of this oversight—an estimated annual loss of $30 billion. This loss stems from the inability of Hollywood to effectively connect with Black, Latinx, and Asian-American/Pacific Islander communities.
McKinsey & Company state in its report: “As our research and analysis have demonstrated, executives don’t need to act out of altruism. The reward for getting it right could create real impact for the industry—and the prize will only grow. Progress may not be easy, but when the enhanced richness of storytelling is accompanied by a multi-billion-dollar opportunity, the business case is clear.”
According to McKinsey’s research, the lack of representation has cost the film industry $10 billion for not engaging Black audiences. It’s an even larger gap for Latinx communities, with the gap ranging from $12 to $18 billion per year. Meanwhile, lack of Asian-American/Pacific Islander representation cost Hollywood $2 to $4.4 billion.
The disparities in representation are stark, as highlighted by The Hollywood Reporter. While Asian-American actors receive some attention, Native Hawaiians and Pacific Islanders are vastly underrepresented, often reduced to just a handful of notable figures such as Jason Momoa and Dwayne “The Rock” Johnson.
McKinsey’s reports delve deeper into the systemic issues that perpetuate this lack of diversity. In 2021, their findings revealed sparse representation of Black talent in off-camera roles, with former studio executives turned independent producers expressing the inequities.
A Black writer shared with McKinsey, “Even though I was staff writing on a popular, well-received show, it was still tough to find an agent. Your average agent is a 50-year-old white guy…who never had to stretch to see [himself] in other people or spaces.”
Similarly, Latinx representation suffers from a lack of support in Hollywood as well. According to a Latinx producer, there is no shortage of Latinx actors and writers, the industry struggles to effectively market content created by Latinx creators. “The broken part is the business side: they don’t know how to support or market content made by Latinos.”
Both Black and Latinx off-screen talent often find themselves in positions where they are tasked with providing opportunities for others from their communities.
The authors also added: “As with Black representation in film and television, Latinos who rise to prominence in the industry play an outsize role in providing opportunities to other Latino talent: the likelihood of a Latino producer, writer, or lead signing on to a project is an average of 15-fold higher if the director or showrunner is Latino. Given that only five percent of films have Latino directors and 1 to 5 percent of TV and streaming shows have Latino showrunners, Latinos’ ceiling of opportunity is low.”
In essence, Hollywood’s failure to prioritize diversity is not just a moral issue — it’s a financial one. The industry’s reluctance to embrace diverse perspectives not only alienates audiences but also leaves billions of dollars on the table.
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