Originally Published May 7, 2024.
Updated June 13, 2024
Will Smith continues his reign of summer box office hits with the release of Bad Boys: Ride Or Die. The movie is the fourth in the Bad Boys franchise led by Smith and Martin Lawrence. It premiered June 7, grossing $104 million worldwide, according to Variety. CNBC reported on the evolution of the film industry. The rise of streaming networksand actor strikes has changed the landscape of film and television. As a result, Black film and TV is one of the places where Hollywood is cutting back.
Recently Issa Rae, actress, producer and director, spoke to the declining landscape.“You’re seeing very clearly now that our stories are less of a priority,” reports Net-A-Porter.Smith’s success shows that the “lack of priority” is short-sighted, there is a market for Black stories and fans will support quality content. Earlier this year, BLACK ENTERPRISE reported on Hollywood’s blind-spot and how it is affecting the bottom line.
A new analysis suggests that Hollywood sacrificed $49.4 billion over roughly a decade by not engaging the Black American community more on industry projects.
According to a fresh report by Creative Investment Research, the calculation measures what Tinseltown gives up by undervaluing projects geared toward diverse audiences. The finding also surmises the film industry loses $15.3 billion annually by not partnering more with Black filmmakers, studios, and their audiences.
The discoveries come after consulting firm McKinsey & Co. recently indicated Hollywood foregoes $30 billion annually by not banding with Black, Latinx, and Asian-American/Pacific Islander communities through assorted ways. It reported that $10 billion a year could be gained by ending the Black inequity gap alone.
William Michael Cunningham, an economist and owner of Creative Investment Research, told BLACK ENTERPRISE his firm’s report suggests that Hollywood’s economic performance is intrinsically linked to its ability to diversify and include more representative content and creators.
“By addressing current disparities, the industry not only stands to gain economically but also to secure a more sustainable and innovative future.”
Cunningham declares that his firm’s analysis broke down several identified areas to quantify the revenue impact of increased diversity in Hollywood. They include audience expansion, global market reach, ancillary products, risk mitigation, longevity and loyalty, and brand value enhancement.
He proclaims that the largest impact could come from risk mitigation through diversity. Cunningham stressed that the industry could benefit substantially by avoiding box office flops through more consistent audience engagement with diverse content.
“A conservative estimate of a 10% reduction in losses from flops would equate to $2 billion in saved costs annually, contributing $20 billion over a decade.”
Cunningham shared that more substantial social impact and brand value could be game-changing. He projected that enhanced stock value, attracting better talent, and securing more favorable deals could help boost the valuation of major studios by $6 billion. He says that’s based on those studios’ current market cap of around $200 billion.
He is also upbeat about the prospect of global market reach. Films with diverse casts and culturally resonant stories, like “Black Panther,” have shown the ability to increase box office receipts significantly.
“Assuming diverse films capture an additional 2% of the global box office market, approximately $42 billion in pre-pandemic years, this could mean an extra $840 million annually. Given a sustained effort over 10 years, this could contribute about $8.4 billion.”
Further, he claims expanded audience engagement and increased consumer spending on ancillary products in the overall U.S. merchandising and entertainment markets might add $6 billion in revenue.
Another area Cunningham cites is the longevity and loyalty of diverse content. He projected syndication, reruns, and streaming rights can add significantly to a film’s lifetime revenue.
“If diverse content extends the average revenue-generating lifespan by even 20% and considering the U.S. film and TV industry’s revenue from these sources is about $25 billion annually, this could generate an additional $5 billion over a decade.”