A few years ago, a division specifically catered to black audiences was created under the Lions Gate Entertainment Corp. (NYSE: LGF.B). Formerly called Codeblack, it is a business department devoted to creating movies with black audiences in mind, from initial development to theaters. Business models such as these prove to be significant, given that the demand for diversity in movies is only growing. In fact, movies that boast a diverse cast often bring in a diverse viewership that in turn brings in impressive revenue. According to the talent firm Creative Artists Agency, films that draw in diverse audiences (due to a multi-racial cast) have a three times turn out.
In the past few months alone, Hollywood has seen the undeniable advantages of creating movies with a diverse cast. Most recently, the film Girls Trip, a comedy that stars four Black women, had a revenue of $30.4 million on its opening day and later went on to finish first at the box office. The film made about 50% more in revenue than the telecommunications conglomerate Comcast (NASDAQ: CMCSA) projected for the film, an estimate of $20 million on opening day. Likewise, All Eyez On Me, the biographical drama of the late African-American rapper Tupac made a revenue of $26.4 million in spite of the industry's projections of only $21.8 million. Other examples of movies with a diverse cast, such as the thriller Get Out, was estimated to make $20-25 million during its opening weekend. Instead, the film opened at $33.4 million and subsequently finished first at the box office.
Christy Haubegger, Head of the Multicultural Business Development for Creative Artists Agency, remarked that the biggest sign of a film's future success with non-white audiences is directly tied to the diversity of the cast, going on to note that the fact "is not a niche at all." Given that moviegoers of color bought 49% of movie tickets in 2016 alone, up from 45% in the previous year, the rising presence of movies with diverse casts is bringing in revenue for Hollywood.
In addition to the growing appeal to black audiences, movies with diverse casts bring in additional revenue from non-Black audiences: the audience for the movie Girls Trip had a 59% black audience, 19% white audience, 17% Hispanic audience and 3% Asian audience. The Girls Trip producer Will Packer expanded on such a success, stating "I love the fact that if this film works, it's going to be a tremendous opportunity for other African American female actresses." He continued, saying "Because people in boardrooms around Hollywood will go, 'Wow they can open a movie, audiences will go see them. This makes economic sense for us.' And of course we all know that's the true driver in Hollywood."
Above all, it's important that Hollywood stays attentive to the desires of its viewers. Recently, Codeblack told fans they would produce a heist, action movie starring the singer Rihanna and the actress Lupita Nyong'o based off a highly retweeted twitter post that had been circulating around the web for three years. Given that black audiences, and non-Black audiences are paying for more movies that reflect diversity, Hollywood might finally see a new wave of diverse movies dominating the box office.