Who could ignore a $30 billion opportunity? It seems Hollywood’s key leaders might, according to recent findings.
Since 2021, the consulting firm McKinsey has been releasing reports on the state of diversity and inclusion in the entertainment industry, specifically focusing on groups that have historically been excluded. These reports have calculated the potential economic benefits Hollywood could reap by implementing more inclusive practices: an additional $10 billion annually by addressing the gap in representation for Black individuals, a staggering $12 billion to $18 billion by valuing Latino professionals and consumers appropriately, and, as per the most recent report released today in partnership with Gold House, $2 billion to $4.4 billion by better engaging the Asian and Pacific Islander (API) markets.
This latest figure is derived from U.S. Bureau of Labor Statistics data showing that Asian Americans earn 30 percent more than non-Asian Americans but spend 35 percent less on media. McKinsey’s survey of API consumers indicates that nearly half would increase their spending on films and TV shows that offer more authentic representation (49 percent) and would dedicate more time to such content (47 percent).
Despite significant visibility of Asians and Pacific Islanders in modern media with films like “Everything Everywhere All at Once” and “Parasite,” and TV series like “Beef” and “Squid Game,” there are nuances to this progress. For instance, while API representation in films has jumped from 3 to 20 percent from 2002 to 2022, 85 percent of these roles are in films not made in the U.S., and a similar trend is observed in episodic TV. APIs make up 6.2 percent of the U.S. population but only represent 3.4 percent of lead roles in U.S.-produced films, indicating a significant underrepresentation.
Moreover, there is a tendency for API-led films to gravitate towards the action-adventure genre. For movies grossing over $50 million, 71 percent with API leads fall into this category. The cultural narratives in these films often become less specific to API experiences as they gain a wider distribution — for example, between 2018 and 2022, only 37 percent of wide-release films with API leads were considered culturally specific, compared to 76 percent in limited theatrical releases.
This pattern of cultural dilution does not equally affect all racial groups. For instance, Black-led films were found to be twice as likely to address race-specific themes compared to their race-agnostic counterparts, according to McKinsey’s 2021 report.
The diversity in API representation also tends to blur or completely overlook the Native Hawaiian and Pacific Islander components, often lumped together under the API umbrella. Of the 310 API lead roles in films from 2018 to 2022, half were portrayed by actors of East Asian descent, while the 17 Pasifika leads were played by a small group of actors, predominantly in action films, including Dwayne Johnson and Jason Momoa.
McKinsey’s findings suggest that improving diversity in Hollywood isn’t just a matter of ethical responsibility but also a significant economic opportunity. The firm asserts that the financial rewards of better representation could be transformative for the industry, making a compelling business case for more inclusive storytelling and casting practices.
