Netflix released a first-of-its-kind diversity study Friday to analyze the makeup of Netflix's on-screen talent, as well as the behind-the-camera creators, producers, writers and directors.
The report shows that the company has made progress, but still has more work to do to close diversity gaps. The company says it's committing to an "inclusion lens" to its work, which co-CEO Ted Sarandos says means asking questions like, "Whose voice is missing? Is this portrayal authentic? Who is excluded?"
The company also announced the creation of the Netflix Fund for Creative Equity, which will invest $100 million over the next five years in organizations that help underrepresented communities train and find jobs in TV and film. Netflix also committed to releasing an update on this study every two years through 2026.
"I think it's important that the content reflects the people that are watching it," Sarandos told CNBC's "Squawk Alley" in an interview Friday. "I think the way people can connect with content, with a great movie or a great series, is that they see something of themselves in that, either that it's very relatable, that it might look like them, or it reflects a life experience that they've also experienced."
The study was conducted, at Netflix's request, by Stacy Smith, who has a PhD in communications and human development and is the founder and director of the USC Annenberg Inclusion Initiative. The USC Annenberg Inclusion Initiative produces regular reports on diversity in film and television. Smith's team examined all of the films and series Netflix commissioned between 2018 and 2019. Of the 22 inclusion indicators (such as racial identities, LGBTQ+ and disabilities), 19 showed improvement over the two-year period.
Netflix's strengths in diversity are around women. The study found gender equality in leading roles across films and TV series. Smith also found that Netflix is outpacing the industry in hiring women and people of color as directors. Netflix was also found to exceed proportional representation of Black leads and main cast.
But the report also found that other racial and ethnic groups were underrepresented relative to the U.S. population. LatinX characters were just 4% of leads, despite being 12% of the population, and just 3% of creators and producers were LatinX.
The study also found that LGBTQ+ characters were rare: just 4% of leads in film and 1% in TV series. And while the study says that 27% of the U.S. population identifies as having a disability, fewer than 1% of series leads, and just 5% of series main cast were characters with disabilities.
"Dr. Smith's years of research — including this new study — confirm that inclusion behind the
camera exponentially increases inclusion in front of the camera, and that both depend on ensuring that the Netflix executives commissioning these stories are also diverse," Sarandos wrote in a blog post about the report. "Doing better means establishing even more opportunities for people from underrepresented communities to have their voices heard, and purposefully closing capacity and skill gaps with training programs where they are needed."
Friday's news and the company's fund is the latest in a series of commitments to diversity.
In January, the company released its first Inclusion Report about Netflix's employee ranks. And in June, Netflix made a $100 million commitment to support Black communities by putting 2% of its cash holdings into Black financial institutions serving low- and moderate-income communities.
Netflix founder and co-CEO Reed Hastings has also made a personal commitment to diversity. In June, Hastings and his wife donated $120 million to historically Black colleges and universities.