It should be clarified that "The Wiz" was not made only to appeal to black people. "The Wiz" had been a significant success on Broadway with audiences of all types in 1975, and the film was made with the same intent in mind (at the time, it was the most expensive musical ever made).
"The Wiz" worked - quite well - on Broadway. It didn't work well at all on film, especially since the plot and tone were significantly altered to allow a 30-something Diana Ross to play Dorothy.
Exactly. The problems with the film version of The Wiz had to do with the director (Sidney Lumet) and the star (Diana Ross). Lumet, a great director in his own right, didn't have the right touch for a musical and Ross was miscast. If Stephanie Mills had been cast, it might have been better.