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Embracing diversity in the workplace boosts creativity, improves leadership, and enhances understanding of consumers. According to a McKinsey report (Dixon-Fyle et al. 2020), firms with gender-diverse executive teams were 25% more likely to have above-average profitability, and firms in the top quartile of ethnically and culturally diverse leadership outperformed those in the fourth quartile by 36% in profitability. Leadership teams that are not diverse can lead to higher polarization and performance penalty. And although gender and race participation is robust in the creative arts—especially in the film industry, where the structure is modular and work is largely entrepreneurial—evidence suggests that the number of movies directed by women and people of color has been declining since 1995 and was less than 5% in 2016.
Biases in the Film Industry
A recent Journal of Marketing Research article studies the performance implications of biases in project assignment and distributional support. The article reports that the average domestic box office revenue (inflation-adjusted) of a film by a woman director was 37% less than that of a male-directed film. Also, the average revenue of a film by a minority director was less than that of a nonminority director by about 42%. The article suggests that the subdued performance is possibly a result of selection bias by Hollywood studios. The authors present evidence that women and POC (people of color) directors are disproportionately chosen to work for movies in lower-grossing categories. The article establishes that most consumers are not aware of the identity of the director and do not have a lower preference toward movies made by minority or women directors.
Women and POC directors are disproportionately chosen to work for movies in lower-grossing categories…most consumers are not aware of the identity of the director and do not have a lower preference toward movies made by minority or women directors.
The article presents evidence that confirms bias against gender and race-diverse movie directors in project assignment, allotted movie budget, and number of screens secured during distribution. The article also suggests that the differences in box office performance disappears when controlling for this selection bias. Directors of international repute and with higher clout (i.e., with history of higher revenues) are less affected by this bias. A matched-sample analysis suggests that movies by women directors have better return on investment, especially because they garner similar revenues at lower budgets.
On the day we reached out to the research team for an interview, it was a wonderful coincidence that the lead author, Kate Karniouchina, was in town for a visit. Kate was so kind and generous to allow Xuan, one of our team members, to meet and interview her in person at a café near the University of California, Irvine campus. Xuan and Kate had a lovely conversation about the article and beyond. As a token of appreciation for Kate’s kindness and the ample doses of laughter she provided, Xuan offered her a walking tour of the Paul Merage School of Business. It was a truly wonderful experience. Check out their conversation below!
Q: What inspired you to research the topic of women and minority film directors in Hollywood?
A: Most of my research focuses on new product development (NPD) and movies. The movie industry provides marketing and NPD scholars with a unique opportunity to observe the launch of a large number of new products where talent, distribution, budget, quality, revenues, and other traditionally hard-to-trace information is readily available at the individual product level. It is also an industry that combines creativity and cutthroat competition, making it extremely fun to study.
This passion of mine goes back many years, all the way back to my dissertation. Steve Carson, one of the co-authors of this paper, actually co-advised my dissertation, and we continue working together in this area to this day. I am also very lucky to be working at Mills College at Northeastern University, a school with a rich legacy of supporting women’s rights and fighting for social justice. Three of my co-authors come from Mills College, an Operations Management Professor, Carol Theokary, and two Economists: Lorien Rice and Siobhan Reilly. So, it is not surprising that we started exploring the issue of underrepresentation in key positions in the movie industry.
Q: Your article focuses on a very important topic: women and minorities in the context of the movie industry. What is so unique about this industry?
A: This is a great question. The prototypicality of the movie industry is well known, most movies can be considered new products, or at least product line extensions (in the case of sequels), which makes this industry particularly attractive to scholars studying new product development. People often focus on similar industries but try to draw generalizations to other domains.
In our article, we make claims about the film industry only, trying not to overreach, but we welcome extensions of this research to other domains. We all know that underrepresentation and discrimination exist in many contexts, but in these other contexts, individual factors are harder to isolate and control. The movie industry allows us to neatly tease out certain things while controlling for others. We can look at resource flow impediments when it comes to distinct areas, e.g., budget allocation or distribution. For example, we ask and answer the following questions: are smaller revenues the result of lower budgets? Or can they be tied to screen allocation decisions?
If you look at the entrepreneurship research, we know that women and minority business owners don’t have businesses that are as successful as the businesses originated by white men. And we know about some causes; for instance, we know that white men have an easier time accessing capital, but we can’t necessarily decouple other important factors leading to discrepancies. For example, we have limited visibility into how successful individual businesses are in securing various types of distribution contracts, shelf space, etc. We simply don’t have the individual-level data for all the salient variables, including competition. We have data points that tell us that women and POC have a hard time raising capital. We know that, but we can’t trace the entire value chain. The film industry allows us to trace resource allocation discrepancies throughout the entire system. Who gets better opportunities? Who gets more funding? Who gets better channel support? All of this while controlling for product quality.
Q: How do you think the findings apply to other industries beyond Hollywood?
A: While there may be some differences in individual industries, I expect to see commonalities in the barriers facing women and minorities. Budget allocation findings are likely to be relevant across different settings that share the modular structure of the movie industry, whether it be project-based, entrepreneurial, or within large companies carrying out multiple projects. We expect our results to also hold across various types of companies. This includes matrixed organizations where individuals work across teams as projects as well as within their own department, and where the impact is harder to track. This would present an interesting measurement and modelling change.
Differences in effort and funding for projects managed by women and minority managers, as well as the visibility of these projects, may exist in various industries. The exact nature of the unfair distribution of resources may differ, but the overall story is likely the same. Women and minority managers do not receive equal support and are less likely to be assigned promising projects. Yet, when they are given the same opportunities, women and POC create films (or products more generally speaking) that generate similar revenues to films from male, nonminority directors.
Q: Now that we know that women and people of color are being discriminated against in the film industry, how do you think this will impact the types of movies that are made and the stories that are being told?
A: When a single lens is used to interpret all stories, the resulting view of the world is partial. When representation from certain parts of society is limited, experiences are heavily curated. The only way to see the full picture is by obtaining perspectives from diverse voices, which we currently lack. When dominant and privileged voices exclusively tell other people’s stories, stereotyping or complete misunderstanding of cultural phenomena can occur. Attempting to portray people of subjugated identities on their behalf is less productive than centering the community and elevating their own voices.
Unfortunately, we have not reached that point yet. What gives me hope is the success of women- and minority-led blockbusters: Wonder Woman, Black Panther, The Woman King. These movies still lag in international markets (based on proportion of revenues coming from international markets compared to other blockbusters), but domestic markets show very favorable reception. There is still a lot of work that needs to be done, domestically and around the world. Our study attempts to move the needle in this arena. We hope that our results will encourage Hollywood studios to release more projects led by female and minority directors since this will allow them to expand their audience base and provide a richer tapestry of projects.
Q: It was surprising and disappointing to see that the number of movies with women and minority directors is dropping in mass releases, but at least the number is increasing in smaller scale, indie movies. What are your thoughts on this trend?
A: Anecdotal evidence suggests that studios may go through a “checklist” approach, where they believe they are off the hook for producing a women’s or minority movie once they have already made one. It is possible that the increased number of niche and smaller indie projects handled by major studios is responsible for the drop in widely released women and minority projects.
This is a weird situation where one problem is being addressed, but another is being created. At the same time, I am happy to see that streaming companies are doing a better job at retaining diverse talent compared to traditional studios. If you look at the best director nominations from last year, they are from streaming companies or from abroad, where representation is better. Amazon and Netflix, for example, have tapped into more diverse pools of talent compared to traditional studios.
Q: Would you mind sharing how you obtained access to this cool dataset? Was it public data? Researchers struggle to capture interesting data, and this has been worsened by COVID-19. Do you have any general advice on data collection approaches for doctoral students?
A: Different parts of the dataset are public, some require a fee, but it is reasonable. Being creative is crucial when it comes to research and obtaining datasets and access. There are various scraping tools for collecting secondary data and ways to crowdsource primary coding. A combination of search and scraping tools were used in our study to quantify and automate the collection of movie star and director media mentions over specific periods of time. Identifying and coding someone’s race and gender is difficult, but text mining can be used to search PR releases and news archives for pronouns and make inferences, while M-Turk can be used for race-related coding (we didn’t do that, but other researchers show some very compelling examples). It is important to explore new tools, but also to stay on track and be mindful of timetables. Developing coding skills and utilizing AI for coding can also be helpful.
In conclusion, Kate’s passion for studying new product development and movies fueled her inspiration to research the topic of underrepresentation of women and minorities in key positions in the movie industry. The team conducted research on this topic within the context of the film industry because it provides a unique opportunity to observe the launch of a large number of new products with readily available, traditionally hard-to-trace information. The study’s findings are expected to hold true across various types of companies and industries, revealing the barriers facing women and minorities in these industries.
The team’s research has exposed the troubling reality of discrimination and underrepresentation of women and people of color in the film industry. This inequality has negative consequences for the types of movies produced and the stories told. The only way to achieve a comprehensive understanding and gather diverse perspectives is by centering the community and elevating their voices. There is still much work to be done domestically and globally to improve representation and combat discrimination. Ultimately, this research project has the potential to shift the status quo and initiate change in an industry that wields significant influence in shaping culture and society.
Read the Full Study for Complete Details
Read the full article:
Ekaterina V. Karniouchina, Stephen J. Carson, Carol Theokary, Lorien Rice, and Siobhan Reilly (2022), “Women and Minority Film Directors in Hollywood: Performance Implications of Product Development and Distribution Biases,” Journal of Marketing Research, 60 (1), 25–51. doi:10.1177/00222437221100217
Sundiatu Dixon-Fyle, Kevin Dolan, Dame Vivian Hunt, and Sara Prince (2020), “Diversity Wins: How Inclusion Matters,” McKinsey & Company (May 19), https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-wins-how-inclusion-matters.