Hollywood's diversity issues have plagued the industry for decades, reinforced by a lack of representation — both in front of and behind the camera.
But one startup, Jumpcut, is looking to create a more inclusive era of global film and TV, using data science to discover stories created by underrepresented groups.
Jumpcut CEO and Founder Kartik Hosanagar, an AI for Business Professor at University of Pennsylvania's Wharton School, came up with the idea after pitching a screenplay to producers. Despite praising the work, he found they were unwilling to take a risk on a new writer.
"It's no secret that Hollywood is an old boys club for the most part," Hosanagar told Yahoo Finance in a recent interview.
Using data, his startup aims to "reimagine the way films and TV shows are developed, specifically with the goal of elevating fresh voices and stories," he added. Hosanagar explained how the company's curated algorithm scours internet sites like YouTube (GOOGL) and Reddit to find storytellers with new perspectives and high engagement.
"It doesn't matter what their race is or what their gender is, but the point is that we're looking for stories that are resonating with audiences," the CEO said. He added that the data is meant to "stimulate conversations" and help creators "be more effective."
After a storyteller is discovered though the algorithm, the project is then further tested on over 100,000 potential viewers to add data-backed proof that the idea can sell.
Following the testing phase, the creator is invited to a six-week incubator program before partnering with potential producers and buyers.
'Wakanda or poverty, with no in between'
So far, Jumpcut has 12 TV and film projects in the pipeline with partners from "Good Will Hunting's" Lawrence Bender to Emmy-winning producer Shelby Stone. These Hollywood voices "complement the data driven approach and provide mentorship to our creators," Hosanagar said.
Hollywood loses out on $10 billon annually due to a lack of diversity, a recent McKinsey study found. In addition, studio producers often look at Black content as "Wakanda or poverty, with no in between,” the report noted.
Meanwhile, researchers at UCLA’s Center for Scholars & Storytellers discovered that films lacking in diversity often suffer a financial hit at the box office — with potential losses amounting to a whopping $130 million.
"I think we're at a phase in Hollywood where awareness for the need of inclusion and awareness for the business opportunity around inclusion is clear," Hosanagar said.
"The problem is that diversity is still the biggest risk. In Hollywood, you want to know that there is an audience on the other side when you invest in a fresh, new voice. And that's where our data comes in," he added.
Time for Hollywood 'to catch up' to audiences
This past Oscar season saw women and diversity at the forefront — with a particular focus on international stories amid increased audience demand.
"Nomadland's" Chloe Zhao made history as the first woman of color to win Best Director — and only the second woman ever to win the coveted award. Overall, 9 actors of color were nominated — the most diverse acting slate in the Academy's history. Still, only 2 of the nonwhite nominees took home statuettes.
"Minari's" Yuh-jung Youn snagged Best Supporting Actress, becoming the first Korean woman to win in the ultra-competitive category, whereas "Judas and the Black Messiah's" Daniel Kaluuya walked away with Best Supporting Actor.
And it's not just the movie business.
"Bridgerton" — Netflix's (NFLX) breakout success that features a mixed-race cast, including a Black lead —is the platform's most-watched series premiere, with 63 million households projected to have seen at least a portion of the show in its first four weeks, according to the company. (Caveat: Netflix counts a ‘viewer’ as someone who watches at least 2 minutes of a piece of content.)
"Audiences are more diverse than ever before, they're more global than ever before, and the way they are consuming content has changed," Hosanagar said, explaining that it's the "supply side that hasn't evolved" as Hollywood remains "risk averse" over fears of failing on risky bets.
"We are here to change the game because we can provide them the data, and the comfort that this is not a risky bet," Hosanagar said.
"It's time for the Hollywood executives to catch up to where the audiences are," he concluded.
Alexandra is a Producer & Entertainment Correspondent at Yahoo Finance. Follow her on Twitter @alliecanal8193