By Gary Symons
TLL Editor in Chief
The Entertainment and Character sector drives more sales of licensed products and services than any other, so the characters you see depicted form a critical part of the licensing mix.
According to recent research, however, both the entertainment and licensing industries are missing out on sales due to a lack of diversity in the mix of both characters and creators.
The good news on that front is that the lack of diversity has been recognized in Hollywood and other major centres of TV and film production. In fact, the theme of the mega-hit Barbie: The Movie addressed exactly this point—that a lack of decision-makers and creators at the top echelons of licensing and entertainment is hurting revenues, as well as maintaining divisions in the wider society.
The World Economic Forum and Accenture jointly released a major report on the issue in 2021, called Reflecting Society: The State of Diverse Representation in Media and Entertainment, which looked at diversity and representation in a number of sectors, including film and television, gaming, news and publishing, sports, and sports media. The white paper specifically looked at five identity attributes: race and ethnicity; gender; sexual orientation and identity; disability; and age.
The Reflecting Society report found that representing diverse groups in story telling is a critical ingredient in getting higher ratings, higher revenue, and more positive attitudes toward both the film or series, and also products based on those productions.
The paper also says film and television have made more progress than other sectors of the entertainment economy, but that all sectors would gain by increasing the range of representation both in the content, and in the creatives who produce that content.
“Progress starts by acknowledging that diverse societies deserve diverse and inclusive media and entertainment,” the paper says. “But progress cannot rely on new corporate roles that “own” the DE&I issue. It requires changes in culture and a recognition that audiences want, demand and will pay for diversity in content and creative production. In a survey commissioned by Facebook, 59% of consumers polled said they are more loyal to brands that stand for DE&I in online advertising (and) new analysis by Accenture shows that more diverse movies make more money, and diverse audiences can be higher-value audiences.”
To help analyze that data, Accenture examined three of the most used rating measures (IMDb, Rotten Tomatoes Critic and Rotten Tomatoes Audience), and found that films with above-average diversity scores (as measured by Mediaversity) received higher ratings, regardless of production size.
Despite gains over the past two decades, women, racial minorities and LGBTQ+ characters are still under-represented in film and television, leaving large swaths of the population a bit cold when it comes to identifying the stories and people they see on the screen.
More recently, USC Annenberg released a major report by a team under Professor Stacy L. Smith as part of the Annenberg Inclusion Initiative. It updates the organization’s ongoing analysis of top-grossing movies. The investigation now covers the 1,700 top films from 2007 to 2023, and provides a specific look at the 100 top movies of 2023.
Importantly, the study doesn’t just show the level of inclusion in film and television, but also the attitudes toward programming among different groups that would be considered under-represented in the industry. The report looks at 75,328 speaking characters that were evaluated across 17 years of study, finding some reasons to celebrate, and other reasons to work harder.
For example, Smith says 2023 was not a great year for women involved in either television or film productions, because fewer women filled leading roles than in 2022. In fact, the figure plunged to 30% of leading roles, which is a 14% decline from 2022. You have to go back to 2010 to find a comparable figure.
As well, only 32% of speaking characters in 2023 were female, compared to 30% in 2007, and only 11% of stories were gender balanced, defined as between 45 to 54.9% of all speaking roles.
““No matter how you examine the data, 2023 was not the ‘Year of the Woman.’ We continue to report the same trends for girls and women on screen, year in and year out,” said Smith. “It is clear that there is either a dismissal of women as an audience for more than one or two films per year, a refusal to find ways to create meaningful change, or both. If the industry wants to survive its current moment, it must examine its failure to employ half the population on screen.”
Film and Television Show More Racial Diversity since 2007
The Annenberg study did find some encouraging trends in terms of racial diversity in the top films of 2023, and also as a general trend since 2007, although the authors did describe the pace of change as “lethargic.”
“There was a significant increase among protagonists,” the report reveals. “Thirty-seven movies, compared to 31 in 2022, featured an individual from an underrepresented racial/ethnic group in a lead/co-lead role.
“However, while this is progress since 2007 (13 films) it is barely higher than the previous benchmark reached in 2021 (35 films).
Smith did find that the mix of racial and ethnic groups in film has shifted, and casting is more diverse.
- The percentage of white characters has dropped, from 78% in 2007, to 62% in 2022, and then to just 56% in 2023.
- The percentage of Asian characters rose from only 3% in 2007 to 18% in 2023.
Overall, the percentage of underrepresented characters, at 44%, is similar to the 41.1% of the US population that identifies as an under-represented racial or ethnic group.
The news is decidedly less positive for the LGBTQ+ community and for people with disabilities, who have not seen any major increase in visibility in the top films of 2023, or even in films over the past decade.
Lion Forge: The Studio Forging More Diverse Programming in Animation
The Annenberg report found that, “A mere 1.2% of speaking characters in the top films of 2023 were identified as members of the LGBTQ+ community.
“There has been no meaningful change in this figure since 2014. No transgender characters appeared across the 100 top films of 2023.
“Of the 60 LGBTQ+ characters included in 2023’s top movies, 20 were lesbian, 31 were gay, 8 were bisexual, and 1 was identified with another sexuality. There were 76 films in 2023 that did not feature even one LGBTQ+ character, similar to the 72 in 2022 without any LGBTQ+ representation.”
That’s a problem for the film and television industry, because younger generations increasingly feel like they are not well represented on-screen, when compared to social media like TikTok or YouTube.
In March, 2024, the Deloitte Centre for Technology, Media and Telecommunications released its Digital Media Trends report, which found that audience expectations are changing, and are not necessarily being met.
“The profile of the average American audience is changing, and so too are consumer expectations for M&E content more broadly, including TV shows, movies, and social media videos,” Deloitte says. “Data from our 2024 Digital Media Trends study suggests that consumers from diverse groups value inclusive representation in entertainment content, expect it, and actively seek it out.
“Given that younger generations are more diverse, it’s reasonable to assume that such expectations will only increase in audiences over time.”
A great example of diversity in storytelling is the hit Marvel film Black Panther, which was not only one of the franchise’s top-selling films of all time, but also one of the highest rated by critics and audiences alike. Part of that is due to the fact the film was very well done, but it’s also due to the fact the story and the characters presented an entirely new world and culture that was new to many people, but familiar to many black viewers.
That need for diversity also goes well beyond race and gender, particularly with younger people.
In general, the Deloitte research showed that Gen Z (those born between 1997 and 2010) and millennials (born between 1983 and 1996) are more diverse in a variety of ways than those in older generations.
Changing demographics in the US and many other Western nations mean that younger audiences are more diverse racially and ethnically, but as well, they are more likely to identify as members of the LGBTQ+ community, as well as being neurodiverse.
While just as many older people might have been neurodiverse without a diagnosis, younger people are more likely to have been diagnosed with a ADHD, autism, or a learning disability. However, according to the Annenberg study, those types of characters don’t really show up in film and television, despite being very important to younger audience members.
DESPITE PROGRESS, LACK OF DIVERSITY A THREAT TO FILM AND TELEVISION REVENUES
Inclusivity and representation is something the industry has addressed, but remains a challenge in media and entertainment. Deloitte’s survey data showed that:
- A stunning 75% of consumers say they don’t currently feel represented in media and entertainment.
- More than 40% find social media videos more diverse than TV shows and movies, rising to 60% for Gen Z consumers and over 50% for Black, multiracial, Hispanic and Latinx, and LGBTQIA+ consumers.
Deloitte also found that social media platforms have a competitive advantage in perceived diversity due to algorithms that connect audiences with specific content. This builds a sense of community and belonging. That kind of targeting of content to audience has resonated with audiences who don’t see themselves in film and television productions, and are causing them to ‘switch the channel’. For example:
- 46% of Black consumers are more likely to follow creators who look like them compared to 24% overall.
- Approximately 60% of Black, multiracial, Hispanic and Latino, and LGBTQIA+ people follow creators who share their values, versus 47% overall.
- Nearly 40% of surveyed consumers follow creators to learn about different cultures, increasing to 50% or more for Black, multiracial, Hispanic and Latino, and LGBTQ+ individuals.
The impact on the film and television industry can be seen in the consumer consumer churn in subscription video-on-demand (SVOD) services, which is highest among diverse groups. Since minority groups now have the ability to see themselves reflected in various social media platforms, they are more likely to cancel streaming services that fail to do the same.
Deloitte says that puts an important emphasis on the need for these services to cater to inclusivity expectations.
DIVERSITY STILL LACKING IN THE VIDEO GAME INDUSTRY
The video game industry has been a great success story, generating more revenues than film, television and music combined. It is also increasingly a source of characters and stories that lend themselves to licensing.
However, while the market penetration of the gaming industry is impressive, it too suffers from a lack of diversity that could limit sales for game releases that fail to pay attention to the changing market.
Put in a more positive light, game developers that do address diversity will be able to attract a broader market. That’s most obvious with the changes being made at various game studios to address the lack of women in various games.
A great example is the work being done by Electronic Arts and 2K to include women in their popular and highly lucrative sports games.
Most recently, EA Sports inked a licensing deal with the PWHL that brought players from all six teams into its NHL 25 game. NBA 2K introduced WNBA teams into its game in 2019, and the EA’s globally successful EA FC series has included female football/soccer teams and players since 2015.
Nevertheless, the gaming industry still struggles with diversity both in its content and its workforce, as historically under-represented groups remain marginalized in gaming characters and stories. As some examples, the WEF report found that:
- Women characters feature in only 18% of games launched in 2020, despite a 189% increase in their representation over the previous decade.
- Just 4.2% of games prominently display a woman character on the cover.
- Only 3% of award-nominated games from 2003-2018 had a primary character of color, and 60% defaulted to white characters.
Ironically, while research has shown that LGBTQ+ consumers actually spend more per person on video gaming, that segment of the population is not well represented in the games they play. According the WEF-Accenture Study, only 11% of award-nominated games include significant LGBTQ+ storylines, but LGBTQ+ gamers are more likely to own gaming systems (54% vs. 44%) and spend more monthly on games ($13 vs. $10).
Some of the issues around diversity in characters likely comes from the hiring mix in the industry, the study suggests. For example, at the same time that the percentage of female gamers is rapidly increasing, the number of female gaming employees remains very low.
According to a report by the Entertainment Software Association (ESA) in 2021, women made up 45% of the 227 million US gamers in 2021, as opposed to just 38% in 2006. The same report published survey results that showed women believe there is a major gender gap in the industry, due to the influence of traditional gender expectations, a male-focused community, violence and aggression as focal points of video games, and lower identification with male avatars.
And while the female gaming community grows, workforce diversity is lagging. Women account for only 16% of gaming executives and 24% of non-executive roles, while Black and Hispanic developers make up only 2% and 7% of the game development workforce.
RESISTING THE URGE TO DECREASE DIVERSITY IN CASTING AND HIRING
The evidence shows that Diversity, Inclusion, and Equity (DIE) initiatives are a good investment in the entertainment industry, and that diverse characters and casting will often result in better ratings and higher sales.
Unfortunately, the political environment for diversity initiatives in the West, and in the US in particular, has become increasingly hostile.
DIE programs have recently faced significant political backlash in the United States. Critics of DIE argue these initiatives promote divisiveness, reverse discrimination, and ideological conformity. Several states have enacted legislation restricting DIE training in schools, workplaces, and government institutions.
However, while there may be a backlash against diversity programs, entertainment companies of all types have to keep in mind that the demographics of the United States and other Western nations continues to change. The reality is that programming for diversity is becoming more important all the time, because failing to address the issue is likely to cause a significant proportion of consumers to opt out of what the entertainment industry is selling.
Put in the most simple terms, people prefer to see programming or games that reflect who they are. If there are few black female characters in our entertainment options, it should come as no surprise that black female consumers will be less likely to pay for a movie, a streaming subscription, or a video game.
As well, it’s TLL’s view that this is a problem that will get worse, not better, if it’s not addressed.
The World Economic Forum’s 2021 report points out that over the next 25 years, the population of people of color in the US will increase from the current minority of 40% in 2020 to a majority, so media and entertainment companies must address these trends to retain relevance with their core audience.
Key actions would include ensuring inclusivity in storytelling, hiring diverse talent, and incorporating diversity throughout the content development life cycle. As the U.S. population diversifies, meeting these expectations will be crucial for success in a competitive ecosystem of entertainment options that is becoming increasingly global.