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00:00So when you take a look at some of these really significant wins at the Academy Awards does that potentially change the perception that casting will producing pictures that involve people of color have not seen a positive return on investment. Because you're saying that your research actually finds the complete opposite of that. Right. And thank you for having me. Great. Great to be here. And I would say a couple of things. First is congratulations. And we should celebrate all the wonderful and talented actors and actresses for their recognition this weekend and you know celebrate them. And we should actually doubly celebrate because we can only imagine the number of dragons they had to slay to make it as far as they did. And you know the next thing would be to wonder how many more of those creatives would we have been able to see had the virus. We find a report that existed. So I would say congratulations celebrate but also wonder well are we missing. You see these buyers are in place. In fact what you were saying in your report that the industry stands to gain an additional 10 billion from annual revenues that they're not getting if they just address racial inequalities. How do they go about doing that in a way that translates to these numbers that you're reporting. Yeah absolutely. And that's the number that got the most attention to be feared. Ten billion dollars. And that number came from what was in effect a suppression of the market for black kid funding in three ways. Number one was our own distribution. So what we found was that although Blackford projects outperformed for country they were distributed in 30 to 40 percent fewer countries versus whites at projects. Number two investment based on return on investment are where principals. We found that black led projects despite earning more per dollar invested in marketing was heavily invested in. So they got anywhere from 10 to 15 percent less in marketing funding. And number one the most important barrier was that only 4 percent of all the projects coming from Hollywood was accounted for by black creatives. Now keep in mind the population average is 13 percent. So again those three source of inefficiencies is what came together to create this 10 billion dollars in lost funding. What exactly do you mean by black led projects are you talking about the actors or the creative forces behind them or anything else. And the other element in that production project I see it as a great complication. So you're ISE husband pretty good progress and you'll see that in the awards shows onscreen behind the cameras where it becomes a lot more problematic. So I'm talking about writers directors producers people TV show runners and others. So it's the folks who decide what stories get told. That's a place where they both substantial bottleneck exist today in terms of representation. How does a film industry compare to other industries. Yeah and that's why I think that the prices coming in to be honest with you when you look at a number of metrics the film industry is actually underperforming most of their counterparts across sectors. So specifically on the representation in the executive suites film is by far the worst performer worse than other traditionally homogenous sectors such as oil and gas. So again surprising and also worrying given the fact that not only is that an issue for folks working in industry but also the impact that Hollywood has in popular culture and perceptions. Sharon when we talk about breaking down these barriers of making change it usually relates to needing complete widespread systemic change right. Is that also the case when it comes to Hollywood. Because how much change how much progress can be made if you're just talking about one groundbreaking production company or one casting agent that's more willing to cast people of color or black black actors. Yeah I would say given the depth and persistence of these problems around racial inequity it will take a broad based solution regardless. More so in Hollywood because Hollywood is an ecosystem. It's not one company. If you think about what a professional has to do in a given week. So working with agents unions guilds studios networks financiers not to mention critics and awards establishments. It is very difficult to be successful in Hollywood unless you're traversing navigating successfully multiple entities. So for batteries is going to be challenging for any one company working within its four walls. So to say to solve this problem is going to take cross company collaboration to make any meaningful change. Is this something that investors are also asking for now. Absolutely. And we've seen it in other sectors too. We are again if you look at lost value ten billion dollars this is a spot where investors will be asking the questions how can we realize this value. And it goes beyond the public markets. IBEX. That's more well-known. But private capital investors are also asking the question how can we make sure we are supporting projects that actually have proven to have demand and can sell in the marketplace.

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McKinsey: Lack of Diversity in Hollywood is Costing the Industry $10B

On this episode of "Bloomberg Equality", Sheldon Lyn, Partner at McKinsey, says Hollywood stands to gain an additional $10 billion in annual revenues, about 7% more than its baseline, from addressing racial inequities. He speaks with Haidi Stroud-Watts and Shery Ahn in "Bloomberg Daybreak: Asia". (Source: Bloomberg)

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