Hollywood is losing out on $10 billion in revenue every year by underfunding work by Black creators

• A McKinsey study found that Hollywood is losing out on $10 billion because of racial biases.
• Black-led projected often receive less funding, but earn "higher relative returns."
• The study found from 2015-2019, 11% of leads/co-leads in films were portrayed by a Black person.
• See more stories on Insider's business page.

A recent study conducted by the consulting firm McKinsey found that Hollywood could see a boost in annual revenue by $10 billion, bringing revenues to more than $150 billion every year, if the industry addresses the racial inequalities that persist in film and television.

The McKinsey study found that "fewer Black-led stories get told, and when they are, these projects have been consistently underfunded and undervalued, despite often earning higher relative returns than other properties."

For many black creatives in Hollywood there is an ongoing struggle that persists when it comes to being equally represented on-screen and behind the camera. The McKinsey study found that from 2015-2019 only 11% of leads/co-leads in movies were portrayed by Black people. In comparison to 89% of those roles portrayed by other races.

There are "financial and social barriers, as well as racial bias" that contribute to the ongoing disparities, McKinsey found, with economic inequality being one of the main reasons for less Black representation in Hollywood.

For Black families in the US, they typically earn $150,000 less than the median income for white families, according to McKinsey. "The result: low or no pay excludes many Black Americans from Hollywood from the start," the study said.

Those biases and inequalities affect Black people seeking management and leadership roles within the TV and film industry, not just those on screen or behind the camera.

"I was one of few women and definitely few Black women there period, let alone in leadership, so there was no one to look up to," one Black agent told McKinsey. "You learn to try not to take up too much space and speak only when you have something important to say. But then peers and others behind you get promoted ahead of you even when you are bringing more in."

Black creatives within the TV and film industry have shifted their talents in recent years from traditional network television to streaming services such as Netflix and Hulu. Producer Shonda Rhimes reportedly ended her $10 million deal with ABC in 2018 to sign a four-year deal with Netflix, worth an estimated $150 million. Filmmaker Ava DuVernay signed a deal with Netflix that same year for an estimated $100 million, The Guardian reported.

Despite the influx of Black creators, Netflix still struggles with diversity on and off screen, though it has made some progress. In Netflix's first diversity and inclusion study, released in February, the company revealed that the percentage of underrepresented leads/co leads overall increased from 26.4% in 2018 to 37.3% in 2019. The study also found that Black women represented just 6.2% of the 23.6% of women directors in the company's projects.

And the lack of diversity goes beyond production companies. Ahead of this year's Golden Globe Awards, the Los Angeles Times published a damning report about the diversity of the Hollywood Foreign Press Association, the body that determines the show's nominees. In addition to the HFPA's lack of diversity, the awards also came under intense scrutiny for overlooking successful Black-led films and television projects, such as Michaela Cole's "I May Destroy You," the Amazon Original film "One Night In Miami," and "Judas and The Black Messiah."

The Netflix original "Emily in Paris," which was largely panned by critics, earned two Golden Globe nominations. The Times reported that members of the HFPA were flown to Paris by the show's producers ahead of it being considered for nomination.