1 Marketing Violent Entertainment to Children The FTC’s Reports on Self-Regulation and Industry Practices in the Motion Picture, Music Recording & Electronic Game Industries National Media Education Conference June 29, 2003 Mary K. Engle, Federal Trade Commission

2 Why Is the FTC Involved? Four years ago, President Clinton asked the FTC to study the motion picture, music recording, and video and computer game industries. In particular, we looked at these industries’ self-regulatory rating and labeling systems, and their marketing practices.

3 Whether the movie, music and video game industries marketed to children products that they: designated as unsuitable for children, or as requiring parental accompaniment or a parental advisory, due to the products’ violent content. For all three industries, the answer was “yes.” What We Asked

4 What We Did Contacted trade groups regarding their self- regulatory rating and labeling systems. Asked companies to give us their marketing plans. Did an undercover shop to see if children could buy age-restricted or parental-advisory labeled products. Surveyed parents and children regarding their use and understanding of the rating and labeling systems. Issued a report in September 2000

5 What We Found 80% of the R-rated movies selected for the study were targeted to kids under % of the explicit-content labeled CDs studied were targeted to kids under % of the Mature-rated video games studied were targeted to kids under 17.

6 Undercover Shopper Survey The FTC contracted for an undercover shopper survey of nearly 1200 theaters and stores across the U.S.: Kids aged went to theaters and stores Without their parents And tried to buy tickets to R-rated movies, explicit-content labeled CDs, and M-rated video games.

7 Undercover Shopper Survey Results Movies: 46% of the time, the children were able to buy tickets to R-rated movies. Music: 85% of the time, the children were able to buy explicit-content labeled CDs. Video Games: 85% of the time, the children were able to buy M-rated video games.

8 Survey of Parents and Kids The FTC contracted for a telephone survey of parents and children on their use and understanding of the movie, music, and video game rating and labeling systems. Most parents say they restrict what movies their kids watch, music their kids listen to, and video games their kids play But, except as to movies, most parents don’t use the rating systems to do so.

9 What We Recommended Because of First Amendment protections given to movies, music, and video games, the FTC did not recommend legislation or government regulation. Instead, the FTC encouraged increased industry self-regulation.

10 Why Self-Regulation? Movies, music, and video games are considered speech or expression under the First Amendment, so there is a very limited role for government regulation. Given past Supreme Court and recent Court of Appeals decisions, government attempts to restrict marketing to kids, or kids’ access to these products, would face very difficult challenges. Therefore, it’s better and faster to encourage stepped-up self-regulation by industry.

11 Recommended Self-Regulatory Changes Stop targeting kids. Establish or expand codes that prohibit target marketing to kids and impose sanctions for violations. Improve self-regulatory compliance at retail stores and theaters, by checking I.D. or requiring parental permission before selling. Increase parental awareness of the ratings and labels, especially by including the reasons for the rating/label in all ads.

12 Can Self-Regulation Work? Yes, if there is continued scrutiny by parents’ and children’s advocacy groups, and the U.S. Congress. FTC has continued its efforts and has released three follow-up reports. Some good news -- the industry has changed.

13 FTC Follow-Up Reports The FTC has issued three follow-up reports -- in April and December of 2001, and June of focused principally on: Whether the entertainment industries continue to advertise R-rated movies, explicit-content labeled music, and M-rated games in popular teen media, and Whether they include rating information in advertising.

14 Follow-Up Reports -- Key Findings The video game and movie industries have made progress in limiting advertising in popular teen media and in providing rating information in ads. The music recording industry has not changed its ad placement practices but is increasingly including explicit content advisories in advertising. Retailers have not changed their sales practices.

15 Movies -- Some Good News Compliance w/industry promises not to place ads on TV shows where under-17 audience is more than 35% Compliance with industry promises not to run trailers for R movies before G and PG films. No ads for R-rated movies in teen magazines. Reasons for ratings now in advertising. Nearly all web sites included rating, some displayed reasons for rating and linked to sites for more information on the rating system.

16 Movies Still room for improvement: Ads for R-rated movies still appeared on TV programs popular with teens Reasons for ratings in ads were often small, fleeting, or inconspicuously placed

17 Music -- Only a Little Change Ads for explicit music routinely appeared on popular teen TV shows and in magazines with substantial under-17 audiences. On a more positive note: Increasing number of ads now include the parental advisory label. BMG instituted policy of adding reasons for the advisory on the label and in advertising.

18 Music On the flip side: Except for BMG artist ads, reasons for the parental advisory label were never provided. Most artist web sites did not include the recording’s lyrics.

19 Video Games – Many Efforts Widespread compliance with industry guidelines on ad placement (under-17 audience must be less than 35% for TV ads, 45% for print and Internet). Few ads for M-rated games on popular teen TV shows. Print ads nearly always included the rating and content descriptors (rating reasons). TV ads had both audio and video disclosure of game’s rating. Game maker web sites gave game’s rating. More consumer education in print ads and in stores.

20 Video Games Still room for improvement: M-rated games ads still appeared in gaming magazines with a substantial under-17 audience. Content descriptors did not appear in most TV ads and on some web sites.

21 Follow-Up Undercover Shopper Survey Results (Dec. 2001) Little change from 2000: Movies: children able to buy tickets to R-rated movies 48% of the time. Music: children able to buy explicit- content labeled CDs 90% of the time. Video Games: children able to buy M- rated video games 78% of the time. (versus 85% in 2000).

22 More to Come... Continued monitoring of industry ad placements and disclosure of rating information. Assess new technological developments. Another undercover shop. A workshop in the fall on retailer and industry practices. Another Report.

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