In any industry, losing $30 billion annually in revenue is a serious problem. So, how did that happen in Hollywood? Well, starting in 2021, consulting firm McKinsey began publishing reports that peel away the entertainment industry’s historical problems concerning the representation and inclusion of diverse groups. With all the DEI arguments circulating in mainstream media and on the internet, this seems like an ideal time to dive in. McKinsey compiled three reports and determined the opportunity cost of the ongoing diminishment of Black, Latino, and Asian Pacific Islander colleagues, performers, and audiences is a whopping $30 billion annually. Who is responsible for such a massive missed opportunity? Some of that blame apparently rests on the top decision-makers and gatekeepers. The Hollywood Reporter looked at the McKinsey analysis, and the reports are alarming.
The other way you can look at this is during the reporting, McKinney’s analysts, who tallied this number, added up the potential revenue that Hollywood (film and television) could gain if they focused more on culturally inclusive business models. The breakdown went like this: $10 billion per year by addressing the inequitable gap among Black audiences, $12 billion -18 billion from identifying the value of Latino professionals and consumers, and from the last reporting that dropped today in conjunction with Gold House from $2 billion to $4.4 billion if Hollywood placed a greater focus on Asian and Pacific Islander market, respectively. McKinsey took a survey of API (Asian Pacific Islander) consumers. The report found that nearly half of the respondents would be inclined to spend more money (49 percent) and more time (47 percent) on film and television content if there was added authentic representation. This says that Asian Americans are in a position to spend a portion of their money and valuable time if the content features more of their diverse community. Successful films like “Everything Everywhere All at Once,” “Parasite” and high profile TV series to the likes of “Beef” and “Squid Game” all took home multiple awards and drew in diverse audiences. So why not spend more money here? Or on Black content or Latino content? This issue is real. The missed revenue is eye-opening. But is Hollywood listening?
“As our research and analysis have demonstrated, executives don’t need to act out of altruism,” in a statement from authors of the McKinsey report regarding reasons to improve representation, both on- and offscreen. “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 multibillion-dollar opportunity, the business case is clear.” Time will tell if changes are made but one thing is certain. Investing in diversity is profitable, like $30 billion in profits, not just the right thing to do.
The post Hollywood is Missing Out on Up to $30 Billion Every Year Because of Racial Inequity first appeared on The Source.
The post Hollywood is Missing Out on Up to $30 Billion Every Year Because of Racial Inequity appeared first on The Source.