With DEI Rollbacks, the Business of Hollywood May Take a Hit

Today, America is more diverse than it’s ever been, with people of color representing 43% of the total U.S. population as of 2021 — a 34% jump from 2010. The same goes for women, the disabled and LGTBQ+ communities, with rapid growth among historically marginalized groups.

Yet despite that growth and an audience demand for more inclusive stories, Hollywood studios have scaled back their inclusion efforts to mollify President Donald Trump and his supporters at the possible cost of alienating a large and growing group of consumers.

“It’s a horrible business decision and certainly not the right thing to do,” Darnell Hunt, UCLA’s executive vice chancellor and provost, told TheWrap.

“It’s very unfortunate, and of course it is a reflection of what the current administration is trying to do, rolling back decades of progress we made on the inclusion and diversity front for Hollywood in particular,” Hunt, who co-founded the university’s annual Hollywood Diversity Report, continued. “The majority of babies born in America today are babies of color, and the population is moving towards minority majority status in a couple decades. So not to have diversity in an industry that’s producing stories that need to appeal to diverse audiences is a devastating mistake.”

“What’s happening in Hollywood isn’t necessarily too different from what’s happening in other sectors,” Portia Allen-Kyle, interim executive director of the activist group Color of Change, told TheWrap in an interview.

“We see corporations who are primarily motivated by profit and power capitulating and seeking to fall in line with an administration that has made very clear and transparent that they are not on board with diversity, equity and inclusion,” she added.

Changes to Hollywood’s DEI initiatives have been real and immediate. Since Trump’s inauguration, major conglomerates including Disney, Amazon, Paramount Global and Warner Bros. have cut out or adjusted their diversity, equity and inclusion programs, a decision experts and advocates say will ultimately leave a hole in their bottom line. But as TheWrap has reported for nearly two years, DEI programs were already being rolled back, even before the election of Trump.

The communities being marginalized by these rollbacks are Hollywood’s bread and butter. Not only are minority groups quickly becoming the majority, they also consume more media. Black audiences, despite making up only 14.4% of the country’s population, take the lead, spending an average of 3.55 hours per day watching TV, according to a 2024 Nielsen report. The Hispanic/Latino community, the second-largest racial or ethnic group in the U.S. at 19.1%, accounts for 24% of box office ticket sales and 24% of streaming subscribers.

In addition, U.S. Latinos see films an average of 3.3 times a year, per capita, compared to Asian Americans (2.9) and white Americans (2.3). However, they only make up less than 5% of the leading on-screen, off-screen and executive leadership roles in U.S. media. 

In 2021, McKinsey and Company released a report that showed Hollywood loses out on nearly $10 billion a year when it undervalues TV and film projects by Black creators. In 2023, the same year hit films “Barbie,” “The Hunger Games: The Ballad of Songbirds & Snakes” and “Creed III” premiered, UCLA released a study showing that films with casts that were 31% to 40% people of color earned the highest median global box office receipts, while films featuring casts with 11% people of color performed the poorest. That year, female moviegoers bought the majority of opening weekend domestic tickets for three of the top films. 

“One of the things our report has shown is that audiences want to see diverse content, that as shows look to American society and become more diverse, they make more money, they get higher ratings on TV and more box office on film,” Hunt said. “So these rollbacks by the studios and getting rid of shows that obviously reach out to broader audiences are going to hurt their bottom line in the long run.”

Hollywood’s recent retreat on DEI is one America has seen before. Between the small boost in diverse narratives and representation following the #OscarsSoWhite outcry in 2015 and racial reckoning that took place after the murder of George Floyd, Hollywood has long teetered along the lines of standing firm on its promise for equality in show business. 

Other activists TheWrap spoke to said while Hollywood’s DEI rollbacks are  disappointing, it comes as no surprise given that the promises to improve in those areas were already lackluster by their estimates.

“We’ve been dealing with a lack of representation and a lot of tokenization for a long time, and I think that a lot of DEI efforts in Hollywood were kind of hollow anyway — at least with disability and where it’s concerned,” Dom Evans, co-founder of FilmDis, a media organization that consults on disability in media, told TheWrap. Similarly, LGBTQ+ and plus-sized characters combined only make up a total of 10% of roles in the highest-grossing U.S. films, per a 2024 study from the Geena Davis Institute. 

Kyle Bowser, the senior vice president of the NAACP’s Hollywood bureau, said Hollywood is merely playing the same record it’s had on repeat for years, adding that the NAACP is mostly concerned with how Hollywood will profit off Black culture.

“What we’re most concerned about is the extent to which our culture will continue to be exploited and often even appropriated without the remuneration aid back to our community for that contribution,” Bowser said. “Our culture is often on the screen even when we’re not, and that’s been going on for decades.”

Evans added that one of the issues the disabled community faces as it relates to accurate and fair representation on screen is inauthentic and/or performative DEI practices. He recalled a time when a major studio ignored his constructive notes on a film as it pertained to its depiction of disabled people.   

“I found out that I was one of five [consultants]. They had five different disabled people tell them, ‘Don’t make this project. It’s horrible. You need to rewrite it. You need more consultants that are specifically from these disabled communities.’ All of us were ignored, all five of us,” Evans shared. “I don’t think they were looking for consultants, I think they were looking for yes men, yes women or yes people. They wanted the disabled person who would be most palatable to them, and we weren’t, because we want better.” 

Color of Change’s Allen-Kyle highlighted how Hollywood’s DEI reversal mirrors the changes being made in other industries, specifically as it relates to what appears to be a shared belief system that opposes a need for equity and inclusion. 

“Unfortunately what we’re seeing is a number of companies and their willingness to be complicit in this moment that is kind of a characterizing of the response to this very blatant anti-civil rights, anti-progress, anti-inclusion agenda — what we’ve been calling the neo-segregationist agenda of this current administration.”

The origins of DEI trace back to the Civil Rights movement and came about as a way to provide marginalized communities with the same opportunities that have been historically afforded to white people. From in-house diversity training, to diverse hiring initiatives, to pipeline programs that help fill the gaps left behind by segregation, racism and sexism in the workplace, DEI has been around for decades. And ironically, white women have been its primary beneficiary.

“When white women really understand their progress is tied to the expansion and the requirements for folks to look outside of the white, old boys network that they’ve benefited from … it actually benefits everybody when inclusion is policy,” Allen-Kyle said.

Even with the implementation of DEI, disenfranchised communities have continued to face inequality in Hollywood. While some gains have been made, Black filmmakers still receive 40% less financial support compared to films by non-Black filmmakers, only 1.5 out of 10 theatrical film directors are women and white writers still make up the largest share of TV employment (63%). 

The issue now is how to respond. While Hunt questioned the likelihood of a protest in Hollywood, Evans suggested one way for creatives to resist is by being more sharp-witted when making business deals. 

“I think that we’re going to have to be much more savvy and find ways to make our own stuff together,” Evans said.

What about a boycott? For Hunt, the possibility of a movement similar to the ongoing boycotts against Fortune 500 companies really depends on how clearly audiences correlate the content they view with companies behind them and the policies they have in place. 

“I think audiences maybe don’t make the connection between what they’re watching, their favorite show and their favorite star that they identify with,” Hunt explained. “Unless, of course, those favorite on screen personalities that they can relate to actually come out front and take a stand and encourage them to boycott – that rarely happens. Not to say that it wouldn’t happen in this case. It’s hard to predict the future.”

Tess Patton contributed to this report.

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