MARKETING VIOLENT ENTERTAINMENT TO

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CHILDREN:

A ONE-YEAR FOLLOW-UP REVIEW OF

INDUSTRY PRACTICES IN THE MOTION PICTURE,

MUSIC RECORDING & ELECTRONIC GAME INDUSTRIES

A REPORT TO CONGRESS

FEDERAL TRADE COMMISSION

DECEMBER 2001

TABLE OF CONTENTS

EXECUTIVE SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i

I. INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

A. Commission Reports on Marketing Violent Entertainment to Children . . . . . . . . . . . . . . 1

B. Sources of Information for this Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

II. MOTION PICTURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

A. Marketing to Children: Ad Placement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

1. Industry commitments following the September Report . . . . . . . . . . . . . . . . . . . . . . 3

2. Industry advertising placement since the September Report . . . . . . . . . . . . . . . . . . . 3

a. Television ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

b. Print and radio ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

c. In-theater trailers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

d. Promotions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

e. Internet ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

f. Other steps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

3. Analysis of industry practices since the September Report . . . . . . . . . . . . . . . . . . . . 8

B. Ratings and Reasons for Ratings in Ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

1. Industry commitments following the September Report . . . . . . . . . . . . . . . . . . . . . . 8

2. Industry advertising practices since the September Report . . . . . . . . . . . . . . . . . . . . 9

a. Television ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

b. Print and radio ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

c. Internet advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

(1) Studio Web sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

(2) Theater Web sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

(3) Home video retailer Web sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

d. Other steps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

3. Analysis of industry practices since the September Report . . . . . . . . . . . . . . . . . . . 13

C. Box Office Enforcement of the Rating System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

III.MUSIC RECORDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

A. Marketing to Children: Ad Placement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

1. Industry commitments following the September Report . . . . . . . . . . . . . . . . . . . . . 14

2. Industry advertising placement since the September Report . . . . . . . . . . . . . . . . . . 15

a. Television and radio promotions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

b. Print advertising . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

c. Internet marketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

3. Analysis of industry practices since the September Report . . . . . . . . . . . . . . . . . . . 17

B. Advisory Labels and Reasons for Labels in Ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

1. Industry commitments following the September Report . . . . . . . . . . . . . . . . . . . . . 17

2. Industry advertising practices since the September Report . . . . . . . . . . . . . . . . . . . 18

a. Television ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

b. Print ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

c. Internet ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

(1) Recording company Web sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

(2) Retailer Web sites . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

3. Analysis of industry practices since the September Report . . . . . . . . . . . . . . . . . . . 21

C. Industry Efforts to Enforce the Rating System at Point-of-Sale . . . . . . . . . . . . . . . . . . 22

IV. ELECTRONIC GAMES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

A. Marketing to Children: Ad Placement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

1. Industry commitments since the September Report . . . . . . . . . . . . . . . . . . . . . . . . . 22

2. Industry advertising placements since the September Report . . . . . . . . . . . . . . . . . . 23

a. Television ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

b. Print ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

c. Internet ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

3. Analysis of industry practices since the September Report . . . . . . . . . . . . . . . . . . . 26

B. Ratings and Reasons for Ratings in Ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

1. Industry commitments since the September Report . . . . . . . . . . . . . . . . . . . . . . . . . 27

2. Industry advertising practices since the September Report . . . . . . . . . . . . . . . . . . . 27

a. Television ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

b. Print ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

c. Internet ads . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

(1) Game publishers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

(2) Retailers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

3. Analysis of industry practices since the September Report . . . . . . . . . . . . . . . . . . . 32

C. Industry Efforts to Enforce the Rating System at Point-of-Sale . . . . . . . . . . . . . . . . . . 33

1. Mystery shop . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

2. Online sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33

V. CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

ENDNOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

CONCURRING STATEMENT OF COMMISSIONER ORSON SWINDLE . . . . . . . . . . . . . 61

APPENDIX A: SELF-REGULATORY RATING SYSTEMS . . . . . . . . . . . . . . . . . . . . . . . A-1

APPENDIX B: MYSTERY SHOPPER SURVEY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1

APPENDIX C: DATA COLLECTION METHODOLOGY AND TELEVISION,

INTERNET, AND PRINT DEMOGRAPHICS . . . . . . . . . . . . . . . . . . . . . . C-1

EXECUTIVE SUMMARY

In September 2000, the Federal Trade Commission issued a report requested by the President

and Congress entitled, Marketing Violent Entertainment to Children: A Review of SelfRegulation and Industry Practices in the Motion Picture, Music Recording & Electronic Game

Industries (“September 2000 Report”). That Report found that the three entertainment industries

had engaged in widespread marketing of violent movies, music, and electronic games to children

that was inconsistent with the cautionary messages of their own parental advisories and

undermined parents’ attempts to make informed decisions about their children’s exposure to

violent content.

In January 2001, the Senate Commerce Committee asked the Commission to conduct two

follow-up studies to determine: 1) whether violent R-rated movies, explicit-content labeled

music, and M-rated games continue to be advertised in popular teen media, and 2) whether ratings

or labels and content descriptions are included in the advertising. In its first follow-up report

issued in April, the Commission reported that in the months following the September 2000

Report, the movie and electronic game industries had made some progress – both in limiting

advertising in popular teen media and in providing rating information in advertising – but that the

music industry had done little in either area.

Now, in this second and more comprehensive follow-up study, the Commission finds that the

movie and electronic game industries have made commendable progress in limiting their

advertising to children of R-rated movies and M-rated games and in providing rating information

in advertising. The music industry has continued to advertise explicit content recordings in the

most popular teen venues in all media, although it has made improvements in providing explicitcontent labeling information in advertising.

Movies. For the motion picture industry, the Commission found the industry has made

progress in both restricting advertising in popular teen media and in providing rating information

disclosures. The Commission’s review of studio marketing plans for six violent R-rated and three

violent PG-13-rated films revealed no express targeting of either R-rated films to children under

17, or PG-13-rated films to children under 13. In reviewing marketing practices, the Commission

found no ads for R-rated movies in popular teen magazines and little promotion of R-rated films

in locations popular with teens. Its check of trailers for R-rated movies revealed none shown

before G- and PG-rated feature films.

The one popular teen venue where studios continued to advertise R-rated films was television.

The Motion Picture Association of America has set no specific limits on ad placements. Although

some studios have announced they will not advertise R-rated movies in venues with a 35 percent

or more youth audience share, this threshold permits continued advertising on popular television

programs that attract larger absolute numbers of underage viewers than programs with a 35

percent or more youth audience share.

In its review, the Commission found the movie industry has made real progress in disclosing

rating information in its advertising. It found studios now routinely disclose both ratings and

reasons for ratings in their television, print, radio, outdoor, and online advertisements – a

significant improvement since the September 2000 Report. Although the Commission identified a

number of studios that have done a good job in making their disclosures clear and conspicuous, it

also found that a significant percentage of rating reasons were not readable.

Music. For the music recording industry, the Commission’s review of ad placements revealed

no change in industry practices since the September 2000 Report. Marketing documents for 13

explicit-content labeled recordings included plans for extensive advertising in the most popular

teen venues in television, radio, print, and online media. Just before the issuance of the

September 2000 Report, the Recording Industry Association of America had recommended that

recording companies not advertise explicit-content labeled recordings in media outlets with a

majority under-17 audience. Shortly after release of the September 2000 Report, however, it

withdrew that recommendation. In the music industry’s view, advertising targeted to all ages is

consistent with its parental advisory labeling program which, unlike the rating programs for

movies and electronic games, does not specifically designate an age for which labeled music may

be inappropriate.

The Commission did find progress in the music industry’s disclosure of parental advisory label

information in its advertising. Recording companies increasingly are complying with recently

announced industry-wide guidelines that the parental advisory be included in all advertising of

explicit-content labeled recordings. Although a promising start and a clear improvement since the

September 2000 Report, continued efforts will be needed to achieve widespread compliance.

Because the industry’s labeling program does not call for providing the reasons for the labels,

such information is not part of the labeling or advertising disclosures.

Games. For the electronic game industry, the Commission found continued positive steps to

limit ad placements in popular teen media, including new industry standards limiting ads for Mrated games where children constitute a certain percentage of the audience: 35 percent for

television and radio and 45 percent for print and the Internet. The Commission found little

advertising on popular teen television programs. However, in its review of marketing documents

for 14 violent M-rated games, the Commission found that all planned at least some ad placements

in media venues popular with teens, although only two expressly targeted an under-17 audience.

The Commission also found continued placements of advertising in youth-oriented magazines and

popular teen Web sites. The industry’s new anti-targeting standards should diminish – but likely

not eliminate – such placements.

The Commission found that the game industry has made substantial progress in providing

accurate and prominent rating information in advertising. With a revised game industry code now

in place that strengthens and clarifies disclosure requirements across all media, there remain only a

few key areas where the code and compliance need strengthening.

Undercover Shopper Survey. For this Report, the Commission again conducted an

undercover “mystery” shopper survey, as it had for the September 2000 Report, to determine

whether unaccompanied 13- to 16-year-olds could purchase tickets to R-rated movies, explicitcontent labeled recordings, and M-rated games. The survey was designed to assess any changes

made in response to the Commission’s recommendation in the September 2000 Report that all

three industries improve their self-regulatory efforts by increasing retail level compliance by, for

example, requiring identification or parental permission for sales to children. The results indicate

that, unlike the commendable progress by the movie and electronic game producers in responding

to the Commission’s recommendations of September 2000, retailers have made few changes since

the first survey. Nearly half (48 percent) of the theaters sold tickets to R-rated movies to the

underage moviegoers, while 90 percent of the music retailers sold explicit content recordings to

iii

the underage shoppers. Neither of these results represents a significant change from the practices

documented in the first survey. Electronic game retailers showed modest improvement in

restricting purchase of M-rated games than last year, with 78 percent allowing shoppers to

purchase M-rated games (compared to 85 percent earlier). Increasing retail level enforcement

remains an important challenge, especially for the music industry.

This Report documents genuine improvements by movie and electronic game producers in the

two areas of study: (1) limiting advertising placements for R-rated movies and M-rated games in

popular teen media, and (2) disclosing rating and labeling information in advertising. It also

identifies recent modest steps taken by the music industry to increase the number of explicit

content labeling disclosures in advertising and to communicate the meaning of the label to parents.

The Report offers suggestions for continuing improvements by all three industries in the areas of

study. Because of First Amendment and other issues, the Commission continues to support

private sector initiatives to implement these suggestions. The Commission believes that in

addition to the role that industry self-regulatory programs can play, individual companies can take

the lead in adopting best practices that go beyond those programs. In this Report, the

Commission points to several companies that have done so. It encourages others to follow their

lead. The Commission will continue to monitor the entertainment industry’s marketing practices

as Congress may direct.

I. INTRODUCTION

A. Commission Reports on Marketing Violent Entertainment to Children

In September 2000, the Commission issued its first report on the marketing of violent

entertainment products to children by the motion picture, music recording, and electronic game

industries (“September 2000 Report”). This report responded to a request from President

Clinton1 and similar Congressional requests2 that the Commission undertake a study to answer

two questions: whether these three entertainment industries promote products that they

themselves acknowledge warrant parental caution in venues where children make up a substantial

percentage of the audience, and whether their advertisements are intended to attract children and

teenagers. After a comprehensive study that included internal industry marketing documents,

consumer surveys, and television, print, and Internet advertising, the Commission concluded that

the answer to both questions was “yes.”

The Commission found that although the three industries have self-regulatory systems that

purport to rate or label their products to help parents make choices about their children’s

entertainment, industry members routinely targeted advertising and marketing for entertainment

products with violent content directly to children. The Commission concluded that such

advertising and marketing efforts undermine each industry’s parental advisories and frustrate

parents’ attempts to protect their children from possibly inappropriate material. It called upon the

industries to strengthen their self regulatory programs by: (1) prohibiting target marketing to

children, and imposing sanctions for violations; (2) improving compliance with self-regulatory

programs at the retail level; and (3) increasing parental awareness of the ratings and labels.

Because of First Amendment issues, the Commission concluded that vigilant self-regulation offers

the best approach to helping parents choose what is appropriate for their children.

In January 2001, the Senate Commerce Committee requested that the Commission prepare

follow-up reports in the spring and fall of 2001 to examine whether the entertainment companies

continue to advertise products labeled or rated for violent content in popular teen media, and

whether rating or label information is included in advertisements of these products. The April

2001 Report provided a “snapshot” of industry advertising practices in the months following the

September 2000 Report. It described in some detail new self-regulatory initiatives by the four

industry associations – the Motion Picture Association of America (“MPAA”), the National

Association of Theatre Owners (“NATO”), the Recording Industry Association of America

(“RIAA”); and the Interactive Digital Software Association (“IDSA”).3 The Commission also

reported its findings, based on its review of television and print advertising and industry Internet

Web sites, that while the movie and electronic games industries had made progress, the music

recording industry had done little to respond to the September 2000 Report. The Commission

continued to urge the industries to strengthen their self-regulatory programs.

This is the second follow-up report. It examines the same issues as the April 2001 Report, but

is based on more extensive information, as described below.

B. Sources of Information for this Report

To prepare this Report, the Commission collected information from a variety of sources. As it

had done for the April 2001 Report, it tracked advertising placement in media popular with youth,

and reviewed advertisements in all media – print, television, radio, and the Internet – to determine

if they include clear and prominent rating and labeling information. In addition, the Commission

reviewed internal company documents provided by nine individual industry members, including

marketing plans for certain R-rated movies, explicit-content labeled music, and M-rated games

released since the Commission’s September 2000 Report.4 The company documents describe,

among other things, where advertisements were placed and the target audiences they were

intended to reach, the nature and extent of promotional activities used to generate consumer

awareness and interest in the products, and company research. In addition, the Commission

undertook an undercover shopper survey – as it had done for its September 2000 Report – to

determine if products rated or labeled for violent content were being sold to children without their

parents present.

More specifically, with respect to the motion picture industry, the Commission reviewed the

marketing of six R-rated films and three PG-13-rated films released by three major studios

between October 1, 2000 and April 1, 2001.5 In selecting these films, the Commission chose Rand PG-13-rated movies whose ratings were based, at least in part, on violent content.6

For the music recording industry, the Commission studied the marketing of fifteen explicit2

content labeled recordings7 released by three major recording companies between October 1,

2000 and March 1, 2001.8

For the electronic game industry, the Commission reviewed the marketing of fourteen violent

M-rated games by three of the major companies in the marketplace.9 The Commission selected

M-rated games issued since the September 2000 Report.10

II. MOTION PICTURES

A. Marketing to Children: Ad Placement

1. Industry commitments following the September 2000 Report

In its September 2000 Report, the Commission found that the movie industry engaged in

extensive marketing of violent R-rated films to children under 17.11 It urged the industry to

prohibit the practice,12 and specifically to stop placing advertisements for R-rated movies in

“media or venues with a substantial under-17 audience.”13 Although the Commission did not

define “substantial” or specify an audience size or share that marketers should consider off limits,

it pointed to the industry members’ own marketing documents that identified the media and

venues most effective in reaching teens.

As described more fully in the April 2001 Report, the MPAA responded to the Commission’s

recommendation by promising that each studio would review its marketing practices in order to

further the goal of “not inappropriately specifically targeting children” in its advertising of films

rated R for violence.14 Four of the seven members of the MPAA, plus one non-member studio,

made specific commitments not to market violent R-rated movies to those under 17.15 Three of

those studios announced they would not advertise R-rated movies in media with a substantial

audience of children under 17, defining “substantial” as more than 35% of the audience.16

2. Industry advertising placement since the September 2000 Report

In April, the Commission reported, based on its review of publicly available information, that

studios were continuing to advertise R-rated films on the most popular teen television programs,

but had stopped advertising in youth-oriented publications.17

For this Report, the Commission’s review of the media plans submitted by the three studios,

unlike those submitted for the September 2000 Report, does not indicate that R-rated films were

targeted at children under 17, or that PG-13-rated films were targeted at children under 13.

Although the studios continued to advertise R-rated films on television programs popular with

teens, they largely fulfilled their pledges not to advertise on programs with a youth audience share

of 35% or greater. Further, studios did not target youth audiences through promotions in youthoriented venues or in print ads.

The sections below review the studios’ practices in placing advertising in major media

including television, print, radio, and online.

a. Television ads

In its September 2000 Report, the Commission’s review of studio marketing plans revealed

that studios repeatedly advertised R-rated violent films on television programs with substantial

teen audiences.18 Most of the television campaigns for R-rated movies that targeted children

under 17 were aimed at least in part at children aged 12 and above.19

Since then, the film industry has taken some positive steps to reduce target marketing in this

medium. The three studios submitting marketing documents for this Report, for example, have

adopted policies not to advertise violent R-rated films on television programs with an under-17

audience share of 35% or greater, although two of the studios have excepted certain

programming from their policies.20 All the media plans reveal that the studios have tried to honor

their advertising placement policies. For the R-rated films reviewed, each studio considered the

age composition of television program audiences when considering potential buys; based on this

demographic data, each studio declared certain programs or day parts on certain stations off limits

for advertising. For example, these studios stopped advertising violent R-rated films during most

of the programming day on MTV, given the high percentage of youth viewers.21 Moreover, none

of the studios chose programs for advertising R-rated films on the basis of data showing

programs’ popularity with viewers under age 18.

To supplement information from the marketing plans, the Commission independently

monitored motion picture advertising on television programs with substantial youth audiences.22

It found that studios advertised violent R-rated films on some of the most popular programs with

a substantial youth audience that, despite their popularity, do not have a 35% youth audience

share.23 The monitoring, along with data showing when commercials first aired, also indicated

that a number of violent R-rated movies were advertised on programs that likely had youth

audiences over 35%,24 in some instances by studios that had pledged to observe the 35%

threshold. Among the films advertised on these programs were MGM’s Original Sin,

Sony/Columbia Pictures’ Baby Boy and Brother, 20th Century Fox’s Kiss of the Dragon, and

Warner Bros.’ Exit Wounds and Swordfish.25

As the Commission noted in its April 2001 Report,26 the 35% standard would have little effect

if a studio wanted to target teens in advertising R-rated films. This is because many programs that

are very popular with youth – especially network programs, which have the largest audiences, as

compared to cable – have an under-18 audience share less than 35%.27 The top ten daily network

programs all have an under-18 audience smaller than 35%.28 On the other hand, that 35%

audience share includes 17-year-olds, who are permitted to attend R-rated movies with adult

accompaniment.29 Still, even programs geared to the very young do not necessarily meet the 35%

threshold – for example, programs such as Frosty the Snowman (33%), Rudolph the Red-Nosed

Reindeer (31%), Mickey’s Christmas Carol (30%), and Power Rangers (23%) and Digimon

(21%) afternoon specials.30 As one studio document reviewed for this Report explained:

Even NBC’s teen-aimed TNBC Saturday morning block has programs that barely reach

the 35% composition. City Guys at 36% and 32% for its two airings, One World at 35%,

Hangtime at 30% are the only [non-prime-time] network programs not specifically

targeting kids 2-11 or 6-11 that exceed 30%.31

In addition to implementation of the 35% standard, some studios and the networks have taken

additional steps that are likely to discourage targeting youth in advertising R-rated films. Some

networks have decided not to accept advertising for R-rated films in youth-oriented programming,

including some programs that do not garner a 35% youth audience.32 As noted above, in

advertising R-rated films, studios no longer selected programs with the goal of maximizing impact

among viewers under 18.

b. Print and radio ads

In its September 2000 Report, the Commission found ads for R-rated films in youth-oriented

comic books and magazines, including some magazines that were specifically distributed in high

schools.33 For this Report, the Commission reviewed similar publications with a substantial or

majority readership under 17,34 and found much had changed. It found no advertisements for any

R-rated film from any studio.35 Moreover, none of the studios’ media plans reviewed for this

Report called for advertising R-rated films in youth-oriented publications; such publications did

figure in the marketing plans for two of the three PG-13 movies reviewed.

With respect to radio advertising, the picture was more mixed. The media plans showed that

one studio collected audience demographic data for spot radio buys,36 and avoided advertising on

certain parts of the day on particular stations because of teen audience shares over 35%.37 The

other two studios did not appear to collect radio audience demographic data. All three of the

studios, however, in coordinating promotional efforts with radio stations, such as free screening

passes, did inform the radio stations that the promotion should take place during a day part when

the audience was age-appropriate.

c. In-theater trailers

In its September 2000 Report, the Commission found that trailers for R-rated films were

shown to audiences containing substantial numbers of youngsters attending PG-13 films,38 and

that theaters did not always honor their policies that trailers should be for films within one rating

of the feature film. 39 The Commission recommended that the industry prohibit placing advertising

for R-rated movies in venues with a substantial under-17 audience. Since then, industry members

have pledged to improve their trailer placement practices,40 and the Commission has found broad

compliance with those pledges.41

For this Report, the Commission reviewed trailers shown before three films – Princess

Diaries (G), Atlantis (PG), and Tomb Raider (PG-13).42 It found no trailers for R-rated movies

shown before either Princess Diaries or Atlantis,43 and found trailers for four R-rated movies

before Tomb Raider.44 Its review of studio documents showed that, with one exception, studios

had requested that trailers for R-rated films be shown before only features rated PG-13 or R.45

With respect to trailers for films not yet rated, but likely to obtain an R rating, studios

apparently are not showing them before either G- or PG-rated features,46 and the three studios

from which the Commission requested documents have instituted specific policies to treat films

anticipated to obtain an R rating as they would a film that has already been rated R.

d. Promotions

In its September 2000 Report, the Commission found that promotions for R-rated films, such

as free passes to movie screenings and free merchandise related to the film (e.g., t-shirts, miniposters, etc.)47 were distributed at places where teens congregate. Marketing plans reviewed for

this Report revealed no similar practices. The three studios’ promotional activities for R-rated

films were not directed to youth-oriented groups or locations,48 but to coffee shops, nightclubs,

bars, bookstores, arcades that do not admit children under 18, or other locations that are less

likely to attract teens. The Commission did find that flyers and free passes occasionally were

distributed at locations likely to be popular with teens such as roller rinks, comic book stores,

skate and snowboard shops, and even a “laser tag” facility, but that these activities tended to

occur in just one or two cities and were not widespread.49 In addition, studios advised

newspapers that, in promoting films with retail partners, they should take steps to ensure that

those retailers’ products are age-appropriate in view of the rating. Studios also included language

on screening passes and flyers indicating that children under 17 would not be admitted to R-rated

films without a parent or guardian.

e. Internet ads

Internet advertising on third-party sites was a relatively small component of the ad campaigns

for the films reviewed for this Report. Two of the three studios did little advertising online for

their R-rated films, and the Web sites on which they did advertise did not have substantial youth

audiences. The third studio was active in advertising R-rated movies online, and advertised on

some Web sites popular with youth.50

f. Other steps

Documents received from the studios detail a variety of other steps they have taken to avoid

targeting violent R-rated films to children under 17. Each of the studios encouraged third parties,

including theaters, video retailers, and the press, to enforce the rating system or to inform

consumers that children under 17 must be accompanied by a parent or guardian to attend an Rrated film. Studios declined to arrange actors’ appearances to promote R-rated films on television

programs with 35% youth audiences, and did not provide press kits or other publicity materials to

youth-oriented publications. The studios limited licensing of characters from R-rated films for

age-inappropriate products, such as toys or action figures, and did not cross-promote the films

with companies that sell age-inappropriate products. 51 Studios also began to enforce age

restrictions for entry into screenings or previews for R-rated films, which had been overlooked

previously.

The industry also changed its research practices. Studios previously conducted research,

including focus groups, surveys, and trailer tests, on the film preferences of children under 17 for

R-rated films. In response to the September 2000 Report, a major research company, after

consultation with the studios, stopped using children under 17 in test groups for R-rated movie

marketing unless specifically requested by a studio.52 Review of trailer tests and commercial tests

provided to the Commission indicates that the studios did not conduct research for R-rated

movies on children under 17.

3. Analysis of industry practices since the September 2000 Report

It is clear that members of the movie industry have taken a number of significant steps since

the Commission’s September 2000 Report to avoid marketing R-rated films in venues with

substantial youth audiences. The one exception is television advertising. The commitment not to

advertise on programs with youth audiences of 35% or greater, while a positive step, does not

preclude advertising – heavily if desired – on programs with substantial youth audiences. In this

area, the industry has not made the significant changes seen in other areas.

The three studios studied for this Report have largely complied with the MPAA’s 12-point

initiative and their own additional commitments. Each of these studios apparently attempted in

good faith to observe the 35% standard; one, Warner Bros., deserves note for going beyond the

letter of its commitment and avoiding advertising in some media that its commitment technically

would allow.

B. Ratings and Reasons for Ratings in Ads

1. Industry commitments following the September 2000 Report

In its September 2000 Report, the Commission found that while movie advertisements

generally displayed the film’s letter rating, they did not include the reasons for the rating. The

Commission recommended that studios clearly and conspicuously display both the rating and

reasons for ratings in all advertising and product packaging, and encourage the media to include

this information as well. 53

In response, the MPAA agreed to “seek ways to include” rating reasons in print and online

advertising, but did not make a similar commitment with respect to television or radio

advertisements. More specifically, it prescribed that rating reasons for all but G-rated films be

included in print advertising above a certain size, Web sites, and outdoor advertising such as

billboards. Member studios agreed to include the rating reason on packaging for new video and

DVD releases and in the preface to those materials, and to encourage theaters and newspapers to

provide rating reasons. NATO members, too, pledged to seek ways to disseminate rating

reasons.

2. Industry advertising practices since the September 2000 Report

In April, the Commission reported that disclosure of rating reasons in the advertising of Rrated films had improved substantially since the September 2000 Report. It found that studios

routinely included reasons for ratings in both print and television advertisements. However, in

many print ads, the reasons were too small to read or were obscured by graphics, and in television

ads they often disappeared from the screen too quickly to be read and understood.

The sections below review the studios’ disclosures of ratings and rating reasons in the various

advertising media.

a. Television ads

Although the MPAA does not require disclosure of rating reasons in television ads, each of

the studios did provide them. In reviewing the television advertising for the nine films studied for

this Report, the Commission found a range of practices. For example, one studio invariably

included rating reasons in its advertisements, and they were prominent and of sufficient duration

to be read, while another provided the rating reasons, in small print, for only one of its films.

For studios’ television ads as a whole,54 most ads included both the rating and rating reasons.

Notably, the rating was provided both in audio and visual formats. The rating reasons, however,

were usually not displayed long enough for a viewer to read them.

b. Print and radio ads

To determine the extent to which ratings and reasons were disclosed and legible in print

media, the Commission reviewed more than 1300 ads for R-rated films in magazines and

newspapers, including the youth-oriented magazines discussed in the Advertising Placement

section above,55 as well as additional magazines56 and newspapers.57 With very few exceptions,

the Commission found that the ads displayed both the rating and the reasons for the rating.58

Although that the rating reasons were often not clear and conspicuous, the Commission found

improvement since the April 2001 Report,59 with more than half of the disclosures reviewed for

this Report reasonably clear and prominent. The large majority of ads by Disney/Buena Vista,

Dreamworks, MGM, Paramount Pictures, Universal Pictures, and Warner Bros. featured rating

reasons that were of adequate

size, and very few of these

companies’ ads contained rating

reasons that were not readable.

For smaller ads, less than five

inches in height, rating reasons

are not required by the MPAA

and are not included in many

small ads. Nevertheless, some

studios have provided legible

rating reasons in ads as small as

three inches. Two of the studios

indicated they would use letters

next to the rating icon to signal which types of content the film’s rating was based on (e.g., “l” for

“language,” “v” for “violence”). Although this practice exceeds the MPAA’s requirements,

consumers may not understand what the letters signify.

The studios also improved their communication of rating information on ads for home video.

In the print ads reviewed, ratings and rating reasons were usually provided in ads for DVDs or

videocassettes. Although rating reasons were often printed in small type or over ad images that

made them difficult to read, the rating letter was usually provided separately from the box art,

making the rating more prominent.

This limited improvement in disclosure of rating information in studios’ home video did not

extend to retailers’ advertising for home videos. A review of “free-standing inserts” by major

retailers, distributed in newspapers, indicates that these retailers’ advertising for videocassettes

and DVDs, with one exception, did not feature the film rating or rating reason.60

For radio, each of the studios studied for this Report included rating reasons in its radio ads,

although not required to do so by the MPAA. Moreover, each took steps to have radio stations

make clear that promotions such as free passes were limited to those 17 or older and include

information about the film’s rating when announcing the promotion.

c. Internet Advertising

(1) Studio Web sites

For its September 2000 Report, the Commission’s review of official movie Web sites revealed

that nearly all the sites displayed the movie’s rating somewhere on the site, but none displayed the

movie’s rating reasons.61 Information from the studios studied for this Report shows that the

studios have since changed their Web sites to provide rating information and to link to additional

sites with rating information as required by the MPAA. A check of the official sites for the nine

films studied reflects that

each of the sites did provide

the rating and, with one

exception, the rating

reason.62

A review of 34 official

movie Web sites from all

studios showed that more

than three-quarters (27 of

34) displayed the films’

rating, usually on either the

teaser page or home page.63

Almost as many (25 of 34) provided rating reasons.64 The few sites that offered the opportunity

to purchase movie tickets at third parties’ sites displayed the rating and rating reason in close

proximity to the link to the third-party site. Overall, 25 of 34 sites (74%) linked to at least one of

three rating information sites, usually to both filmratings.com and parentalguide.org. 65 These

figures are similar to those reported in April,66 and represent a significant improvement in the

online disclosure of rating information since the September 2000 Report.

(2) Theater Web sites

The Commission reviewed Web sites for 18 major movie theater circuits,67 a larger group than

reviewed for the April 2001 Report. The Commission found that almost all (17 of 18) of the sites

included the movie ratings, although only seven of 18 (39%) displayed rating reasons. Two thirds

(12 of 18) of the sites provided detailed information about the rating system generally. 68 Ten sites

(56%) linked to at least one rating information Web site.69

Twelve sites offered visitors the opportunity to purchase tickets through third-party Web

sites. All three of those third-party sites displayed the rating, and two – Movietickets.com and

Fandango.com – displayed the movies’ rating reasons. 70

Theater Web Site Review Results

Question

NATO Member

Theaters

Non-NATO

Theaters

All Theaters

Was the rating displayed on the site?

14 of 14 100%

3 of 4

75%

17 of 18

94%

Was the rating reason displayed on the site?

6 of 14

43%

1 of 4

25%

7 of 18

39%

Does the site provide information about the

MPAA ratings system?

8 of 14

57%

4 of 4

100%

12 of 18

67%

Does the site link to rating information at

MPAA.org, filmratings.com, or

parentalguide.org?

7 of 14

50%

3 of 4

75%

10 of 18

56%

(3) Home video retailer Web sites

The Commission surveyed rating information practices at the five online movie retailers’ sites

it reviewed for the April 2001 Report.71 Practices have not materially changed. In nearly every

case, the sites provided the movies’ letter rating, but only TowerRecords.com displayed rating

reasons. None of the sites linked to rating information at other sites, nor did any of the sites

provide information on the MPAA ratings.72

d. Other steps

The studios often printed rating information, including the age restriction, on screening passes

and preview invitations. The studios also included rating information on home video packaging,

on the videotape or DVD itself, and on pay-per view and pay-TV.

Analysis of industry practices since the September 2000 Report

The disclosure of reasons for movie ratings has improved considerably. Since the September

2000 Report, when the Commission found that rating reasons were absent from movie

advertisements, studios now widely include rating reasons in television, print, radio, outdoor, and

online advertising. Their remaining challenge is to make the information clear and conspicuous to

consumers in all media.73

C. Box Office Enforcement of the Rating System

In its September 2000 Report, the Commission reported on its nationwide undercover study

that found almost half of the theaters sold tickets to R-rated movies to unaccompanied children

under 17.74 In response, both NATO and the MPAA exhorted theaters to improve enforcement,75

building on previously announced efforts to strengthen enforcement at the box office.

To determine the effect of these changes, the Commission conducted a second nationwide

undercover study.76 The Commission contracted with a “mystery shopper” company that

recruited 13- to 16-year-olds across the country to visit theaters and attempt to purchase tickets

to R-rated movies. The survey results were consistent with those of the Commission’s first

survey. Slightly more than half of the theaters (52%) refused to sell tickets to an R-rated movie

to the shoppers, and only 39% of the cashiers asked the shopper’s age at point of sale. These

figures are essentially unchanged from the survey conducted in 2000. While both the 2000 and

2001 surveys show that movie theaters are the most strict of the three industries in restricting

sales to children under 17, theaters can be more effective, particularly with younger children.

One-third (33%) of 13-year-olds were able to purchase tickets to R-rated movies.77 As the age of

the shopper increased, so too did the percentage of purchases of R-rated movie tickets.

FTC Mystery Shop Results By Age - Movies

Was the shopper able to make the purchase?

Yes

# of shoppers

III.

13 years old

67%

33%

14 years old

57%

43%

15 years old

47%

53%

16 years old

38%

62%

Total

52%

48%

300

MUSIC RECORDINGS

A. Marketing to Children: Ad Placement

1. Industry commitments following the September 2000 Report

In the September 2000 Report, the Commission found that the music industry engaged in

extensive marketing of explicit-content labeled recordings to children under 17.78 Finding that

such marketing undermines the message inherent in the label that parental review is warranted, the

Commission urged the industry to adopt industry-wide prohibitions on marketing explicit content

recordings in “media or venues with a substantial under-17 audience.”79

The industry’s trade association, the RIAA, notes that the parental advisory labeling program

for music, unlike the age-based rating systems for movies and games, does not designate an age

for which labeled music may be inappropriate. Accordingly, it asserts that marketing explicitcontent labeled music to all ages is consistent with its labeling program:80 it has not changed this

position in response to the Commission’s Report.81

Individual members of the music industry are free to adopt policies on advertising placement,

and two of the three companies contacted for this Report indicated that they consider the

appropriateness of particular media outlets when advertising explicit content recordings.82 It

remains unclear how this consideration affects actual advertising of explicit content recordings.

2. Industry advertising placement since the September 2000 Report

In April, the Commission reported, based on its review of publicly available information, that

the major recording companies were continuing to place advertising for explicit content music on

television programs and in magazines with substantial under-17 audiences.

For this Report, the marketing plans submitted by the companies also indicate marketing of

explicit-content recordings aimed at children under 17. Two plans referred to promoting explicit

recordings at high schools; another referenced promotions in “teen magazines.” Although one

marketing plan identified a specific target audience (18 - 34) that did not include children under

17,83 the marketing documents for the remaining recordings detailed plans to place advertising in

media that would reach an audience with a majority or substantial percentage of children under

17.

a. Television and radio promotions

As noted in earlier reports, explicit-content labeled recordings are promoted extensively on

cable television music programs with substantial teen audiences. Frequently, the marketing

documents reviewed included plans to secure promotions on popular after-school and

early-prime-time cable music programs, such as MTV’s Total Request Live, Direct Effect, and

Sunday Night Heat and BET’s Rap City and 106th and Park.84 These programs have a majority

or substantial youth audience.85

Although the marketing documents indicated less use of network and non-music cable

television advertising, several did include plans to advertise labeled recordings on television

programs with large under-17 audiences, such as WWF Smackdown, Malcolm in the Middle,

Dawson’s Creek, and That 70’s Show.86

To supplement information from the marketing plans, the Commission monitored advertising

for explicit-content labeled recordings during 31 popular teen programs.87 The eight-week review

revealed regular advertising for these products on programming during after-school and early

evening hours. Four recording companies – Universal Music Group, BMG Entertainment, EMI

Recorded Music, and Warner Music Group – ran advertisements for explicit content recordings

on Total Request Live, Direct Effect, WWF Heat, 106th and Park, and/or WWF Smackdown.88 A

review of first-airing data showed that all five major music recording companies advertised their

explicit content recordings on popular teen shows such as Total Request Live, Direct Effect, and

106th and Park.89

Many of the marketing documents the Commission reviewed for this Report also described

plans to promote explicit content recordings on radio stations with a substantial audience of 12to 24-year-olds. These promotional efforts included seeking radio play of edited versions of

singles, placing advertisements, and providing giveaways of labeled albums.

b. Print advertising

Like those plans reviewed for the September 2000 Report,90 the marketing plans reviewed

here revealed that the recording companies routinely used print advertising to promote their

explicit-content labeled recordings to children under 17. Marketing documents for eight out of 14

explicit-content labeled recordings discussed placing ads in magazines with a majority or

substantial teen audience (such as Metal Edge, Right On!, Seventeen, Skateboarding, and

Thrasher),91 as well as obtaining reviews of recordings, magazine covers, and feature stories

about artists who released the recordings in these same publications.92

The Commission reviewed the June through September 2001 issues of eight magazines with a

majority or substantial readership under 18,93 and found that each of the five major recording

companies had placed advertisements for explicit content recordings in at least two of the

following magazines: Metal Edge, Right On!, Teen, Teen People, Thrasher, and YM.94

c. Internet marketing

As the Commission found in its September 2000 Report, Internet advertising is a key feature

of marketing explicit recordings. Eleven of the 14 marketing plans reviewed for this Report

discussed efforts to promote explicit recordings on popular music or general sites with significant

teen audiences, including mtv.com, bet.com, getmusic.com, iturf.com, music.com, launch.com,

teenpeople.com, and seventeen.com.95 These efforts included artist interviews and chats, banner

ads, featured artist pages with audio and video samples, listening parties, merchandise giveaways,

and reviews of labeled recordings.

3. Analysis of industry practices since the September 2000 Report

The Commission’s review reveals no changes in industry practices since the September 2000

Report. The industry members continue to advertise explicit content recordings in the most

popular teen venues in all media – television, radio, print, and online.

B. Advisory Labels and Reasons for Label in Ads

1. Industry commitments following the September 2000 Report

In its September 2000 Report, the Commission found that the music recording companies

rarely included parental advisories in advertising.96 It suggested that industry members clearly and

conspicuously disclose advisories – as well as the reasons for advisories – in all advertising for

labeled recordings. Just before the September 2000 Report’s release, the RIAA had

recommended that by October 2000 recording companies should include clear parental advisories

in print advertising and online retail sites.97 The Commission’s review for the April 2001 Report,

however, revealed that most advertising still did not contain an advisory.98

In the summer of 2001, the RIAA broadened the scope of its disclosure guidelines beyond

print and online advertising. The RIAA recommended that industry members place clear parental

advisories in all television and radio advertising, street marketing samplers, and music

giveaways,99 and that they post, where possible, lyrics of labeled songs on the artist’s Web site or

on songfile.com (an Internet database of over two million songs and their lyrics).100 The RIAA

also announced additional recording industry efforts to increase disclosures in advertising.101 In

particular, the RIAA and the National Association of Recording Merchandisers (“NARM”)

formed a Parental Advisory Implementation Task Force to assist the music companies in meeting

the existing program guidelines. In addition, music industry leaders participated in a “Hip Hop

Summit” to discuss issues associated with rap and hip-hop music, and endorsed the RIAA

parental advisory program guidelines.

Moreover, to increase consumer understanding of the labeling system, the RIAA prepared a

public service announcement and a brochure explaining the labeling system that it placed on its

Web site and is making available to schools, libraries, and other consumer groups.102 The RIAA

did not adopt the policy followed by the movie and electronic game industries of including in

advertising the reasons a recording received the label.

Each of the companies that the Commission contacted for this Report has developed written

policies and procedures to encourage full compliance with the RIAA advertising disclosure

policies.103 All now generally require an advisory to appear in all promotions for explicit content

recordings, including television, print, Internet, and outdoor advertising.104

The companies also have committed to publicizing the parentalguide.org site that contains

information on all of the entertainment rating systems.105 In addition, one company will include

the language “edited version available,” along with the standard RIAA advisory, on all

advertisements for recordings with both an explicit and edited version.106 Moreover, all of the

companies have encouraged disclosure of the advisory in cooperative advertising efforts with

retailers and other third parties.107 One company states that it will require that “retailers include

the PA Notice in co-op ads for labeled product” and will encourage other companies with which it

conducts joint promotions to include an advisory in all promotions.108

2. Industry advertising practices since the September 2000 Report

In reviewing corporate practices for this Report, the Commission notes progress in providing

the parental advisories in the advertising of explicit content recordings. The sections below

review the recording companies’ advertising practices in disclosing parental advisories in media,

including television, print, radio, and online.

a. Television ads

As noted, the RIAA’s policy to include advisories in television advertisements was only

recently announced. Its full impact is therefore difficult to measure. Three sample television

advertisements for explicit-content recordings submitted to the Commission for this Report

included no advisory or other information regarding explicit content. However, a recent

spot-check of television advertisements shows an increase in parental advisories in the ads since

the Commission’s last monitoring efforts in late 2000-early 2001. Nineteen of the 48 ads

reviewed contained the parental advisory label. Most of these advisories appeared unreadable;

ads for only three of the recordings (Devil’s Night, the What’s The Worst That Could Happen

Soundtrack, and First Born Second) were presented in a clear, readable format.

b. Print ads

The Commission’s review of print advertising shows a mixed picture. With a few exceptions,

the sample print advertisements provided for 14 explicit content recordings did not display any

advisory. When the label appeared in advertising, it usually was a black and white blur too small

for consumers to read. Most of this advertising was disseminated in fall and winter 2000, shortly

after the RIAA’s guidelines for print advertising went into effect in October 2000.

To assess more recent print advertising, the Commission reviewed the June through

September 2001 issues of 11 magazines.109 This four-month review uncovered few clear

advisories in advertisements for explicit content recordings: 17 out of 111 ads for labeled

recordings (15%) contained clear and conspicuous disclosures about an album’s explicit

content.110 Most of the ads (80 of 111) did not carry an advisory at all; some advisories (14 of

111) appeared as a black and white blur, too small or inconspicuously placed to be noticed or

read. However, in the most recent magazine issues, 21 out of 37 ads for labeled recordings

contained an advisory, 18 of which were readable, suggesting progress in communicating this

information to the public.111

c. Internet ads

For this Report, as it had done for the April 2001 Report, the Commission surveyed Web sites

to determine whether industry members were providing online disclosures about explicit content.

It surveyed 40 artist/recording company sites and five major music retailer sites.

(1) Recording company Web sites

The review of official music Web sites shows little change from the Commission’s April

survey.112 Over half of the sites provided notice of a recording’s explicit content. Thirty-six sites

showed a picture of the CD cover, with the advisory label appearing on 16 of the 36 (44%)

covers. Only one of these advisories was legible. Many of the sites used other methods to

communicate the explicit nature of a recording. Twenty-two of the sites (55%) provided

consumers with additional information, usually in the form of an enlarged parental advisory placed

somewhere on the site or a text disclosure stating “explicit” placed near the picture of the CD on

the purchase page (e.g., Web sites for Missy Elliott, Nelly, Redman, Uncle Kracker, Sticky

Fingaz, Pastor Troy, Dr. Dre, Big Punisher, Xzibit).113 In addition, 14 of the 40 sites (35%)

provided the lyrics for the explicit content recordings. In the one area of significant change since

the Commission’s earlier survey, ten of the 40 sites linked either to www.riaa.com or to

www.parentalguide.org; previously the Commission had found no links to these sites. 114

Recording Company Web Site Review

YES

90%

10%

Does the advisory appear on the cover art? (of 36)

40%

60%

Is the advisory readable? (of 16)

94%

Is there other clear & conspicuous information

about explicit content?

55%

45%

Is the record offered for sale?

43%

58%

Is there a link to www.parentalguide.org?

25%

75%

Does the site contain album cover art?

(2) Retailer Web sites

The survey of the Web sites of five major music retailers also showed results almost identical

to those found in the Commission’s April survey. In both surveys, the Commission reviewed

Amazon.com, Bestbuy.com, CDNow.com, Samgoody.com, and TowerRecords.com to see how

these sites promoted five top-selling explicit content albums. Four of the five retailers provided

some information, usually in a text disclosure that read “explicit lyrics,” “explicit,” or simply “PA”

(for “parental advisory”). Only Amazon.com continued to be in full compliance with RIAA’s

recommendations that online retailers prominently display the parental advisory logo at all stages

of the purchasing process, from search results to the shopping cart.115 Amazon.com provides

advisories that read “explicit lyrics” and appear in large easy-to-read print, prominently displayed,

throughout the purchasing process. Best Buy, CD Now, and Tower Records continue to provide

a more limited disclosure, such as an “explicit” disclosure at one point on the site or the cryptic

abbreviation “PA.”116 Samgoody.com has continued to use the disclosure “clean” next to the

edited version, providing consumers with no information about the content of the explicit version.

Music Retailer Web Site Review

Sam

Tower

Goody

Records

5 of 5

4 of 5

2 of 5

3 of 5

4 of 5

4 of 4

when

enlarged

0 of 4

0 of 2

0 of 3

0 of 4

5 of 5

0 of 5

5 of 5

“explicit

lyrics”

“parental

advisory”

“explicit”

and

“explicit

version”

only

“clean”

version

noted

“explicit”

Are clear disclosures at every stage

of the purchasing process?

5 of 5

0 of 5

1 of 5

Is there a link to

www.parentalguide.org?

0 of 5

Amazon

Best Buy

CDNow

Does the site contain album cover

art?

5 of 5

Does the advisory appear on the

cover art?

4 of 5

Is the advisory readable?

Is there other clear and

conspicuous information about

explicit content?

3. Analysis of industry practices since the September 2000 Report

Some members of the recording industry are beginning to comply with the RIAA recent

guidelines on including the parental advisory in all advertising of explicit-content labeled

recordings. Still, the Commission’s review of advertising practices for this Report shows a large

percentage of advertising not yet in compliance. Continued effort will be needed by the RIAA,

individual recording companies, and the music retailers if they want to ensure that the policy takes

effect across the industry.

C. Industry Efforts to Enforce the Rating System at Point-of-Sale

In its September 2000 Report, the Commission reported that its nationwide undercover study

had found that 85% of unaccompanied children ages 13-16 were able to buy explicit-content

labeled records at retail stores. 117 A survey of 300 music stores conducted for this Report shows

a similarly high percentage of sales: 90% of the unaccompanied teens, ages 13-16, were able to

buy an explicit content recording.118 Eighty-seven percent of the youngest shoppers – 13-yearolds – were able to buy explicit-content recordings. A breakout by age of the mystery shop

results follows:

FTC Mystery Shop Results By Age - Music

Q. Was the shopper able to make the purchase?

Yes

# of shoppers

13 years old

13%

87%

14 years old

10%

90%

15 years old

91%

16 years old

10%

90%

Total

10%

90%

300

Such high percentages are not surprising, given the recording industry’s emphasis that its selfregulatory system does not limit the sale of explicit-content recordings to children.

This survey also found that only 12% of shoppers noticed information about the parental

advisory system or about the store’s sales policy regarding explicit-content labeled recordings in

the stores.119

IV.

ELECTRONIC GAMES

A. Marketing to Children: Ad Placement

1. Industry commitments since the September 2000 Report

In its September 2000 Report, the Commission found widespread marketing of Mature(“M”)rated electronic games to children under 17120 – a practice that violated the anti-targeting

provision of the game industry’s comprehensive self-regulatory code.121 The Commission

recommended that the industry improve compliance with its code and also clarify what constitutes

targeting. Responding to the Commission’s Report, the IDSA adopted standards to limit

advertising placements – the only industry to do so. Specifically, it set limits on the percentage of

the audience under 17 that could be viewing, listening, or watching ads for M-rated games on TV

and radio (35%), print (45%), and the Internet (45%).122 As the Commission noted in the April

2001 Report,123 this is a positive step that forecloses advertising M-rated games in some of the

venues previously used to reach young teens. Nonetheless, the thresholds permit continued ad

placements for M-rated games in many of the youth-oriented magazines, television programs, and

Web sites that industry members had previously included in marketing and media plans that

targeted 12- to 17-year-olds.

In addition, all three industry members contacted for this Report indicated that they are

making efforts to avoid targeting their M-rated games to an under-17 audience. One company

indicated that it will go beyond the industry’s anti-targeting threshold and adopt a 35% threshold

for print publications.124

Finally, the Entertainment Software Rating Board (“ESRB”) recently informed industry

members that, beginning in November 2001, it will levy a substantial fine against companies that

engage in inappropriate target marketing.

2. Industry advertising placements since the September 2000 Report

In April, the Commission reported that its review of print and television advertising uncovered

no advertising of M-rated games on television programs popular with teens, but continued

widespread advertising in game magazines popular with teens.

For this Report, the Commission’s review of marketing plans submitted by three companies

for four M-rated personal computer (“PC”) games and nine M-rated television console games

revealed ad placements for these products in all media venues popular with teens. Although none

of the plans for the four PC games expressly targeted an under-17 audience, plans for two of the

nine M-rated console games did; both plans were from the same company, and both post-dated

the release of the September 2000 Report. Further, 12 of 13 marketing plans specified ad

placements for M-rated game in venues with substantial, and at times majority, audience shares

under 17.

The sections below review the practices of the electronic game industry in placing ads in the

major media, including television, print, radio,125 and online.

a. Television ads

Unlike the marketing plans reviewed for the September 2000 Report, which showed

widespread advertising of M-rated games on popular teen television programs, only two of the 13

marketing plans reviewed for this Report (both console games) mentioned television advertising.

Both, however, did plan placements on shows popular with teens, including MTV’s Jackass,

Total Request Live, and WWF Heat, Titus, Dark Angel, King of the Hill, Simpsons, Malcolm in

the Middle, Mad TV, That 70’s Show, and Xena.126 The Commission confirmed that these

planned ads ran after the release of the September 2000 Report. Some of these ad placements

would have run afoul of the industry’s advertising code’s recently-enacted prohibition against

placing ads for M-rated games on shows with a 35% or greater under-17 audience.127

To supplement information from the marketing plans, the Commission monitored advertising

on network, cable, and syndicated programs popular with teens for an eight-week period

commencing in June 2001. It found little advertising for M-rated games – only three

advertisements for a single M-rated game, Twisted Metal: Black, published by Sony Computer

Entertainment America Inc., which appeared on Titus and MTV’s Jackass and Sunday Night

Heat. A separate review of all first-run ads for M-rated games between January 1, 2001 and

August 20, 2001 revealed that the only other advertisement for an M-rated game was for

Onimusha: Warlords, published by Capcom. The first ad for Onimusha also appeared on MTV.

Thus, for most companies, the improvements in television advertising placements that the

Commission reported in April (suggesting few ads for M-rated games on teen-popular shows)

continue.

b. Print ads

In the September 2000 Report, the Commission found that game companies’ marketing

documents revealed plans to advertise M-rated games repeatedly in magazines with a substantial

percentage of readers under 17. The media plans submitted for this Report show somewhat less,

but still widespread, advertising in print media popular with teens. Although none of the plans for

the PC games targeted teen-popular print media, nine of the plans for console games did target

such media, including publications such as GamePro, Electronic Gaming Monthly, Expert

Gamer, The Official U.S. Playstation Magazine, Playstation Magazine, and Tips & Tricks.128

To monitor industry-wide ad placements, the Commission reviewed advertising during a fourmonth period (June-September 2001) in GamePro and Electronic Gaming Monthly, both with at

least 40% readership under 17. This review showed that the percentage of ads for M-rated games

in these publications has dropped slightly to 10% from the 13% the Commission reported in the

September 2000 Report. A breakout of the magazine ads by rating129 is presented below.

The Commission also conducted a more extensive review of five game enthusiast magazines

with a high teen readership – GamePro, Electronic Gaming Monthly, Expert Gamer, 100%

Independent Playstation Magazine, and Tips & Tricks. This review indicated that nine industry

members placed a total of 51 ads for twelve M-rated games over that four-month period: Capcom

(Onimusha, Resident Evil: Code Veronica), Eidos (Legacy of Kain: Soul Reaver 2), Infogrames

(Alone in the Dark: The New Nightmare, Unreal Tournament), Interplay (Giants: Citizen

Kabuto), Konami (Zone of the Enders), Sierra (Half-Life), Sony Computer Entertainment

America (Twisted Metal: Black, Extermination), Take 2 Interactive (Rune: Viking Warlord), and

THQ (Red Faction).

The four issues of GamePro reviewed contain four M-rated game ads. Although not in effect

until November, the industry’s revised advertising code would likely affect continued placement

of M-rated game ads in GamePro.130 Such ads would still be allowed in Electronic Gaming

Monthly, The Official U.S. Playstation Magazine, 100% Independent Playstation Magazine, and

other publications with a very substantial, but presently less than 45%, readership under 17.131

c. Internet ads

In the September 2000 Report, the Commission found that ten of the 11 game publishers

studied had placed ads for M-rated games on Web sites popular with teens. Marketing

documents reviewed for this Report show that these practices continue. Plans for three of the

four PC games indicated ad placements on Web sites which typically have a higher percentage

(e.g., 33%) of youth visitors than found in the general Internet population (20%). These sites

include avault.com, cdmag.com, gamespot.com, gamespy.com, ign.com, and ugo.com.132 Two of

ten plans for console games also indicated online advertising targeting teen-popular Web sites,

such as ign.com, ugo.com, and gamespot.com. These ads, however, would not appear to violate

the new prohibition in the industry’s advertising code against ads for M-rated games on web sites

with a 45% or greater under-17 audience.133

3. Analysis of industry practices since the September 2000 Report

The Commission’s review of print, television, and Internet ads and of game publisher

marketing plans suggests that the electronic game industry is limiting its advertising on popular

teen television programs, while continuing to advertise in game magazines and Web sites popular

with teens. Although these ad placements reach substantial under-17 audiences, most would

appear to comply with the new advertising code’s anti-targeting requirements. In short, the new

guidelines are having only a limited effect on altering placement practices, particularly for print

and on-line advertisements, in the industry.

B. Ratings and Reasons for Ratings in Ads

1. Industry commitments since the September 2000 Report

At the time of the September 2000 Report, the electronic game industry’s code required the

display of rating icons and, in most cases, content descriptors (e.g., “Realistic Violence,”

“Animated Blood and Gore”) on packaging, in print ads, and online. In television ads it required

a voice-over stating the game’s rating, but not the content descriptor.134 In its report, the

Commission recommended that all advertising contain both the rating and the content descriptors.

Shortly before issuance of the April 2001 Report, the industry revised its code to strengthen

and clarify its disclosure requirements in TV, radio, print, and Internet advertising,135 although it

still did not require content descriptors in television or radio advertising. These revisions

included improving the TV voice-over for 15-second ads,136 specifying that rating information

(rating icon and content descriptors) must be displayed in the lower portion of print ads, and

requiring the disclosure of content descriptors on all publisher Web sites promoting a game even

if the site does not sell games online. The industry also initiated an expanded program of ad

monitoring and, effective October 31, 2001, a sliding scale of warnings, monetary penalties, and

other sanctions based on the seriousness/frequency of violations.

Finally, the IDSA and ESRB continue efforts to increase parent awareness of the rating

system, by, for example, releasing public service announcements and encouraging retailers to

increase store signing explaining the ratings.

2. Industry advertising practices since the September 2000 Report

The Commission’s review for the April 2001 Report showed substantial compliance with the

industry’s code requirements, and considerable improvement over the results reported in

September.137 The sections below review the disclosures of ratings and content descriptors by the

game industry in each of the media.

a. Television ads

In a spot review of TV ads for M-rated and Teen (“T”)-rated games aired during the months

of June and July 2001, the Commission found that all advertisements included the required voiceover of the game’s rating,138 although the voice-over was barely audible in an ad for the M-rated

Twisted Metal: Black, published by Sony Computer Entertainment America. Consistent with the

advertising code, no television ad contained a content descriptor. These results are quite similar

to those reported in April.

Just prior to the completion of this report, the Commission became aware of a new television

ad run in October 2001 for Spy Hunter, a T-rated game, published by Midway Home

Entertainment. Midway goes beyond the requirements of the advertising code, and discloses both

the rating and content descriptor in its TV advertising.

b. Print ads

In April, the Commission reported that its review of print ads showed some improvement in

the disclosure of rating information since the September 2000 Report. Ads nearly always

included the game’s rating icon, i.e., M (“Mature”), T (“Teen”), E (“Everyone”) or RP (“Rating

Pending”) and, in a large majority of instances, content descriptors. They also were largely

readable, although often not in compliance with the code’s size requirements.

For this Report the Commission reviewed print ads in eight popular game enthusiast

magazines, GamePro, PC Gamer, Computer Gaming World, Electronic Gaming Monthly, Expert

Gamer, Tips & Tricks, 100% Independent Playstation Magazine, and Nintendo Power, during a

four-month period (June-September 2001). Nearly a third of the ads reviewed promoted new

games that had not yet been rated. For the games that had been rated, the Commission found

broad compliance with the industry’s advertising disclosure requirements. Only 13% were in

substantial non-compliance either because they failed to display the ratings or descriptors or

because the displayed rating icons or descriptors fell substantially below minimum size

requirements. 139

A breakout of those results appears on the following page.

Nearly all of the major advertisers complied fully or substantially140 with industry

requirements. 141 Of the 19 who placed four or more ads for T- or M-rated games during the time

period of the Commission’s review, four (Capcom, Infogrames, Sierra Studios, and Take 2

Interactive) did an especially good job of prominently disclosing rating information, by frequently

using icons and descriptors larger than currently required by the industry’s advertising code.142

Three companies (Activision, Sega, and Take 2 Interactive) placed poster inserts in the magazines

that featured scenes from games but failed to contain a rating icon or a descriptor.143

Of the168 ads promoting games that had not yet been rated, 90 (53%) failed to comply with

the advertising code’s new requirement that there be descriptor boxes in the ads prominently

displaying the Web address and telephone number of the ESRB where parents can get up-to-date

rating information. 144 Although this requirement took effect in March 2001, the ESRB gave

companies until November 1, 2001 before beginning to penalize publishers for non-compliance.

Although retailers are not subject to the same self-regulatory requirements as game publishers,

they have been encouraged to follow the ESRB rating system. 145 Therefore, the Commission also

reviewed retailer ads (from Best Buy, Electronics Boutique, Wal-Mart, Toys ‘R’ Us, Hollywood

Video, Target, Chips & Bits, and Amazon.com) in these same magazines. Generally, these ads

promote several game titles with various ratings. With the exception of Chips & Bits and

Amazon.com,146 each of the retailers displayed the rating icon, usually on the clip art showing the

games’ package cover. In addition, the Commission reviewed retailer ads in free-standing inserts

in the Washington Post Sunday edition over a six-week period. Although virtually all of the ads

included the rating on the clip art for the game promoted, the rating was often hard to find and

read. The one consistent exception was Best Buy, which displayed a larger icon for M-rated

games and added the words “Mature rating” next to the clip art for each M-rated game it featured

in its Sunday inserts.147 None of the retailer ads discussed above included content descriptors.

c. Internet ads

(1) Game publishers

The advertising code requires a number of specific disclosures for game publishers’ Web sites.

For example, if the publisher is selling the game online, both the rating icon and content

descriptors must appear on the page where game information, such as price, is provided.148 For

game “demos” and trailers, the site must display the rating icon on the Web page where the demo

and/or trailer is accessed.149

For this Report, the Commission reviewed 30 game publisher sites for M-rated games and

found little change in some areas since the April 2001 Report, and improvements in others. 150

Consistent with the April 2001 Report, 83% of the sites displayed a rating, mostly on the home

page or a teaser page.151 Forty percent of the icons were not clear and conspicuous either because

the rating was too blurry to read or its location not obvious, i.e., a location requiring the viewer

to scroll down the screen, without notice that scrolling was required.152 Although 60% of the

sites displayed content descriptors somewhere on the site (a significant improvement from prior

reports), only 39% of the descriptors were clear and conspicuous. 153 On many sites, visitors could

view the descriptors only by moving the mouse over the rating icon, but no indication was given

that this step was needed to reveal the descriptors.154

At the 15 sites offering a demo or trailer, rating information appeared prior to downloading or

viewing 40% of the time – another significant improvement since the April 2001 Report.155 Some

sites went beyond disclosing rating information and restricted access based on age. For example,

the Electronic Arts sites for Alice and Clive Barker’s Undying asked visitors to disclose their age

before downloading trailers or demos and denied access to those entering an age under 17.156 On

the 21 sites where games could be purchased, 90% of the time the rating icon was clear and

conspicuous and appeared on a page that the visitor must click through to purchase the game.157

Somewhat less often (71% of the time) were the content descriptors displayed on these pages,158

and seldom were they clear and conspicuous (27% of the time).

Five game sites warned that they contained subject matter that might not be suitable for

children under the age of 17 or 18.159 Fourteen percent of the sites restricted the purchase of the

games to persons over age 16.160

Electronic Game Publisher Web Site Review

Summaries by Sites

Percentage Yes

Yes

83%

60%

39%

Rating icon at point of download or

viewing of a game clip?

40%

ESRB rating icon displayed during

purchase process?

91%

89%

71%

27%

ESRB rating icon displayed on site?

Clear and conspicuous?

ESRB content descriptors displayed on

site?

Clear and conspicuous?

ESRB content descriptors displayed

during purchase process?

Clear and conspicuous?

(2) Retailers

As noted above, retailers have been encouraged to follow the ESRB rating system. For this

Report,161 the Commission reviewed the marketing of five M-rated games on five retailer sites

(Amazon.com, BestBuy.com, EBGames.com, GameStop.com, and ToysRUs.com162). Only one

retailer (EBGames.com) attempted to provide content descriptors during the purchase process.

On the positive side, all but one retailer uniformly displayed the correct rating icon during the

purchase process.163 The rating icon usually was clear and conspicuous, with the “Mature” icon

clearly visible on the page describing the game and listing its price.164

All of the sites, except BestBuy.com, had pages with extensive ESRB rating information.

Most of the sites placed a “Mature” rating icon on the product-specific page that – if the viewer

knew to click on the icon – linked to pages with ESRB information or the ESRB web site.165

GameStop.com and EBGames.com allowed the visitor to browse for games by the ESRB rating.

Electronic Game Retailer Web Site Review

Amazon

Is rating icon displayed during

purchase process?

Clear and conspicuous?

Best

Buy

EBGames

Gamestop

Toys ‘R’ Us

5 of 5

4 of 5

5 of 5

4 of 4

5 of 5

0 of 5

3 of 5

0 of 5

0 of 0

3 of 3

0 of 0

5 of 5

0 of 5

5 of 5

0 of 5

0 of 0

0 of 5

Are the content descriptors

displayed during the purchase

process?

Clear and conspicuous?

Is there a link to ESRB info. or

ESRB.org?

Clear and conspicuous?

3. Analysis of industry practices since the September 2000 Report

With a comprehensive self-regulatory system in place, the electronic game industry continues

to make substantial progress in providing accurate and prominent rating information to the

public.166

C. Industry Efforts to Enforce the Rating System at Point-of-Sale

1. Mystery shop

In its first nationwide undercover survey, the Commission found that unaccompanied children

ages 13-16 were able to buy M-rated games at 85% of the video game retailers. A similar survey

conducted for this Report shows only slight improvement. Seventy-eight percent of the children

still were able to purchase M-rated games, and as many as 66% of the youngest shoppers – 13year-olds – were able to buy an M-rated game. A breakout by age of the mystery shop results

follows:

FTC Mystery Shop Results By Age - Electronic Games

Q. Was the shopper able to make the purchase?

Yes

# of shoppers

13 years old

34%

66%

14 years old

30%

70%

15 years old

10%

90%

16 years old

15%

85%

Total

22%

78%

300

Even among several of those stores with programs in place to restrict sales,167 73% of the

unaccompanied children were able to buy violent M-rated games.168

2. Online sales

In its survey of 30 game publisher Web sites for this Report, the Commission found that of the

21 games that could be purchased online, 15 could be purchased only by credit card, a practice

that may necessitate parental involvement in sales to children. In addition, three of the sites that

sold games expressly prohibited the sale of M-rated games to children under 17. Sites for two

games (Onimusha Warlords and Heavy Metal: Geomatrix), both from Capcom, warned

purchasers that they “[m]ust be 18 or older to purchase products from the Capcom Online Store.”

The third site (for Blizzard Entertainment’s Diablo II) advised purchasers that by submitting the

purchase request for an M-rated game they “are representing that [they] are either over the age of

seventeen (17) or have obtained [their] parent or guardian’s permission to do so.”

Although none of the five retailer Web sites reviewed for this Report expressly prohibited

sales of M-rated games to children under 17, two of the retailers (EBGames and GameStop)

required a credit card to order the game online.169 In addition, the product-specific pages for

Amazon.com and ToysRUs.com stated, “Content suitable for ages 17 or older,” and at

ToysRUs.com, visitors interested in video games initially were presented only with games

contained in a “Kid-Safe Zone” – games rated “Everyone” and “Early Childhood.” Visitors to

ToysRUs.com were informed that for Teen and Mature games, they could click a hyperlink

leading to the general computer and video games store.170

V. CONCLUSION

Responding to the request of the Senate Commerce Committee, the Commission focused its

study on the practices of the motion picture, music recording, and electronic game industries in

two areas: advertising placements in popular teen media and disclosure of rating and labeling

information in advertising. The Commission found that practices adopted in the movie and

electronic game industries since the September 2000 Report go a long way toward addressing

some of the previously identified shortcomings in these areas. Both industries have taken steps to

better communicate rating information to parents, and the game industry and a number of movie

studios have placed some specific limits on ad placements to avoid targeting youth. The music

industry is now beginning to include the parental advisory in advertising, but has not taken steps

to limit advertising to children.

Although there has been real progress in some areas, as documented in this Report, the

Commission concludes, in response to the Commerce Committee’s first inquiry, that all three

industries do continue to advertise violent R-rated movies and M-rated games and explicit-content

labeled recordings in media popular with teens.171 Although R-rated movies and M-rated games

are less likely to be advertised in media with a large percentage of teens in the audience, they

continue to be advertised in programs with a large number of teens in the audience.

In response to the Committee’s second inquiry, the Commission can report nearly universal

disclosure of product ratings in advertisements for movies and games, and increasing, but not yet

widespread, disclosure of the parental advisory label in advertisements for explicit content music

recordings. Disclosures of the reasons for movie and game ratings, while not universal, are now

widespread, although still not clear and prominent in many instances. For music, the labeling

program requires no reason for labels so none appears in any advertisements. There are steps the

industries could take to improve in both areas:

To make further progress in limiting the use of popular teen media to advertise violent

entertainment products, the industries could adopt industry-wide standards to limit ad

placements that take into account a range of factors that help identify those venues most

popular with teens. Such factors could include, among other things, the percentage of the

audience under 17; the total number of children reached; whether the content is youthoriented; and the popularity with children and apparent ages of the characters or performers.

For particular media, other factors – such as the time of day an ad airs on radio or television –

also could be relevant.

To further improve the disclosure of rating and labeling information in advertisements, the

industries could focus on ensuring that both the rating or label and the reasons for the rating

or label are effectively – and clearly – communicated to parents in advertising. This would

entail adoption of industry standards for disclosures of such information in all media, as well

as stepped-up monitoring or sampling by the self-regulatory associations to assure that

disclosures are clear and conspicuous across all media. The electronic games industry, for

example, has just instituted a program to sanction industry members for non-compliance with

its code.

Improvement in both these areas also could be enhanced by programs to impose meaningful

sanctions for non-compliance with code provisions, such as the one recently instituted by the

electronic game industry.

For the motion picture and electronic game industries, some of these steps already have been

taken, or involve practices already followed by some companies that could be standardized for the

entire industry. For the music industry, however, taking these steps would require fundamental

changes in its labeling program, to which it is not yet committed. These would include modifying

the labeling program to require reasons for labels and the disclosure of those reasons in

advertisements. It would also require the industry to adopt the underlying premise that some

labeled recordings should not be advertised in popular teen venues.

Finally, on the related issue of whether retailers have adopted effective sales policies that

discourage sales of restricted or labeled products to children, the Commission must report that

there has been almost no progress by any of the three industries in improving their self-regulatory

efforts to increase retail level compliance by, for example, requiring identification or parental

permission for sales to children.

In this area, industries could:

Encourage third-party retailers to check age or require parental permission before selling or

renting R-rated/M-rated/advisory-labeled products.

Because of First Amendment and other issues, the Commission continues to support private

sector initiatives to implement these steps. It believes that in addition to the role that industry

self-regulatory programs play in this area, individual companies also can play an important role in

adopting best practices that go beyond those programs. In this Report, the Commission points to

a number of companies that have done so. It encourages others to follow their lead. The

Commission will continue to monitor the entertainment industry’s marketing practices as

Congress may direct.

ENDNOTES

1. See Letter from William J. Clinton, President of the United States, to Janet Reno, Attorney

General of the United States, and Robert Pitofsky, Chairman, Federal Trade Commission (June 1,

1999) (on file with the Commission).

2. Legislation calling for the FTC and the Justice Department to conduct such a study was

introduced in both houses of Congress following the Columbine incident. See Amendment No.

329 by Senator Brownback et al. to the Violent and Repeat Juvenile Offender Accountability and

Rehabilitation Act of 1999, S. 254, 106th Cong. § 511 (1999); H.R. 2157, 106th Cong. (1999);

145 Cong. Rec. S5171 (1999).

3. The April 2001 Report described the following industry-wide initiatives:

C The MPAA’s 12-point initiative promised: to avoid running trailers for violent R-rated films

before G-rated feature films; to review policies regarding marketing violent R-rated movies to

children; to avoid using children in research for R-rated films; to install compliance officers to

review their marketing practices; to encourage movie theaters to enforce the R-rating

restriction; and to take steps to include the reasons for ratings in print advertisements, on Web

sites, and in home videos. The MPAA member studios – the Walt Disney Company, MetroGoldwyn-Mayer, Paramount Pictures, Sony Pictures Entertainment, Twentieth Century Fox

Film Corp., Universal City Studios, and Warner Bros. – plus Dreamworks SKG, which is not

an MPAA member, signed on to the initiative. See Motion Picture Association of America, A

Response to the FTC Report (Sept. 26, 2000).

NATO’s 12-point initiative: reaffirmed its ID-check policy for R and NC-17 films; promised

not to show trailers advertising R films before any G or PG film, and only before PG-13 films

if consistent in tone and content with the feature film; and committed to appoint an executive

compliance officer and seek additional ways to disseminate rating information. See National

Association of Theatre Owners, Response of the National Association of Theatre Owners to

the Report and Recommendations of the Federal Trade Commission (Nov. 2, 2000) (on file

with the Commission).

The RIAA’s revised parental advisory labeling system recommended the use of: broad

standards for making the explicit-content labeling decisions; and guidelines for placing the

advisory in print advertising and on retail Web sites. In July 2001, the RIAA announced that

its members supported placing the advisory label in all advertising for explicit content

recordings, as well as increasing efforts to provide parents with information about the labeling

system. See Testimony of Hilary B. Rosen, President and CEO, Recording Industry

Association of America, House Subcommittee on Telecommunications and the Internet, July

20, 2001.

The IDSA’s revised Advertising Code of Conduct (“AdCode”) limited ad placements in

magazines, television shows and Internet sites popular with teens. The Entertainment

Software Rating Board (“ESRB”) stepped up its enforcement of the AdCode, and began to

develop additional sanctions for repeat violators of its provisions. See Testimony of Douglas

Lowenstein, President, Interactive Digital Software Association, House Subcommittee on

Telecommunications and the Internet, July 20, 2001.

4. This Report, while more inclusive than the April 2001 Report, is not as comprehensive as the

September 2000 Report. The number of companies, as well as the number of entertainment

products studied, is significantly smaller than the number studied for the September 2000 Report.

For the most part, therefore, the results of this study are not directly comparable to the results of

the previous studies. Also, the findings in this Report do not purport to be statistically projectable

to industry practices as a whole.

5. The Commission sent requests to Miramax Film Corp., Paramount Pictures, and Warner Bros.

These studios were selected because, during the period of review, they had released the most

films rated R based, at least in part, on violent content. Each studio cooperated in supplying its

marketing materials.

For a description of the MPAA rating system for motion pictures, see Appendix A.

6. These films were selected after taking into account factors such as the extent of the marketing

of the film during the review period, the number of theaters where it was released, and the amount

it grossed.

7. Because the recording companies do not keep track of which recordings received the parental

advisory label due to violent content, as opposed to some other explicit content, the Commission

requested materials for recordings labeled for any reason due to their “explicit” content (which

could include strong language and/or depictions of sex, violence, or substance use). The

Commission did not attempt to evaluate which recordings contained violent lyrics. Albums were

selected based on their appearance as a top selling recording on the Billboard 200 chart of

February 3, 2001, and on marketing information collected for the April 2001 Report.

For a description of the RIAA labeling system for music, see Appendix A.

8. The Commission sent requests to EMI Recorded Music, N.A., Sony Music Entertainment, Inc.,

and UMG Recordings, Inc. The companies were selected on the basis of industry data showing

that they were the largest distributors of explicit-content labeled music during the review period.

Each company cooperated in supplying materials.

9. The Commission sent requests to Activision, Inc., Capcom Entertainment, Inc., and Eidos

Interactive, Inc. The companies were selected on the basis of their size and the extent of

marketing of M-rated games during the review period. Each company cooperated in supplying its

marketing materials.

For a description of the ESRB rating system for electronic games, see Appendix A.

10. The Commission selected all the games rated M for violence that were marketed in the review

period and not previously reviewed by the Commission.

11. September 2000 Report at 13-14. A high percentage of the companies’ internal marketing

documents showed explicit target marketing to children; others, while not explicit, appeared to

target children. Id.

12. Id. at 54.

13. Id.

14. Motion Picture Association of America, A Response to the FTC Report, Sept. 26, 2000. See

also Marketing Violence to Children II: Hearing Before the Senate Comm. on Commerce,

Science and Transp., 106th Cong. (Sept. 27, 2000) (statement of Mel Harris, President and Chief

Operating Officer of Sony Pictures Entertainment) (presenting MPAA initiatives), available at

2000 WL 1530870. The MPAA meets with the studio compliance officers periodically to review

compliance, but does not independently monitor studios’ advertising placement and does not have

a system of sanctions to penalize any studios that “inappropriately specifically” target children.

Although the “not inappropriately specifically target” language gives the studios latitude to

specifically target a youth audience for an R-rated film in circumstances where the studio deems

such targeting to be appropriate, some studios – including Disney, Dreamworks, Fox, and Warner

Bros. – committed not to market R-rated films to youth. See Marketing Violence to Children II:

Hearing Before the Senate Comm. on Commerce, Science and Transp., 106th Cong. (Sept. 27,

2000).

Not every studio is an MPAA member. Apart from Dreamworks, independent studios –

including Artisan (maker of Blair Witch Project) and USA Films (maker of Traffic) – have not

signed on to these initiatives. Independent studios that want their film to be rated must provide

their advertising materials to the MPAA for compliance review, regardless of whether the studios

are MPAA members, but need not abide by other MPAA policies such as the commitment to

review marketing to avoid inappropriately specifically targeting those under age 17.

15. Marketing Violence to Children II: Hearing Before the Senate Comm. on Commerce,

Science and Transp., 106th Cong. (Sept. 27, 2000), Fed. News Serv., LEXIS, Legis Library,

Hearng [sic] File.

16. Id.

17. April 2001 Report at 14. The Commission’s independent monitoring of television advertising

placement for the April 2001 Report revealed that “studios continue to advertise R-rated movies

at the times and on the programs that are most effective in delivering those ads to teen viewers.”

Id. at 6.

18. September 2000 Report at 14.

19. Id.

20. One of the studios, Warner Bros., publicly committed not to advertise on any program with a

35% under-17 audience. Both of the other studios, without announcing the policy formally,

internally committed to respect the 35% threshold, but excepted certain programming from the

35% standard, e.g., they may advertise on programs with an audience share greater than 35% that

air after 9 p.m. or on certain programming formats such as sports. Additional studios, as noted

above, have announced that they have adopted a 35% standard, but others have not. Because the

three studios that submitted documents to the Commission used demographic data for audience

share under age 18 (as opposed to age 17) in determining whether programs had a 35% youth

audience share, the actual threshold they applied was somewhat less than 35%. Unless otherwise

noted, television audience data cited in this report and in Appendix C indicate the programs’

under-18 audience share. Nielsen television audience data are divided into age groups between

ages 17 and 18, rather than between ages 16 and 17.

The 9 p.m. cutoff is one hour earlier than the 10 p.m. cutoff used by the Federal

Communications Commission to limit the time that “indecent” programming may be broadcast on

television. The FCC presumes children are in the audience between 6 a.m. and 10 p.m. and

therefore prohibits “indecent” programming during that time. 47 C.F.R. § 73.3999. Five of the

top ten cable shows and two of the top ten network shows in terms of audience size among 1217-year-olds started at 9 p.m. or later.

21. This is in sharp contrast with the past, when studios heavily advertised R-rated films on MTV.

According to one article, “MTV is the holy grail in marketing [motion pictures] to the 12-to-24

demo....” Tim Swanson, MTV’s Ad-vantage [sic]: Teen-targeting cabler plugs summer pics,

Daily Variety (July 18, 2001). Six of the top 10 cable programs for teens age 12-17 aired on

MTV.

22. The Commission monitored 19 network and cable programs for eight weeks in June and July

2001. See Appendix C, Table A for a list of the programs. The Commission also reviewed

syndicated programming airing on five channels in New York City and Los Angeles for two to

three hours daily during June and July 2001. See Appendix C, Table B for a list of the programs.

23. Commercials for violent R-rated films airing on programs with substantial youth audiences

included, for example, Columbia’s Baby Boy on Grounded for Life, Jackass, Jamie Foxx,

Livewire, Sister Sister, Sunday Night Heat, and WWF Smackdown; Fox’s Kiss of the Dragon on

Jackass, Moesha, Sister Sister, and The Simpsons; MGM’s Original Sin on Jackass and WWF

Smackdown; Sony Pictures’ Brother on Jackass, Sunday Night Heat, and 106th & Park; and

Warner Bros.’ Swordfish on Dawson’s Creek, Grounded for Life, and Jamie Foxx.

24. In most cases, the Commission does not have audience data for the precise time the studios

considered placing ads or for the precise dates that the ads were aired. Therefore, ad placements

that appear to violate a studio’s commitment may have been based on projected youth audiences

under 35%. Indeed, studio documents that provided both actual and estimated audience

demographics indicate that some ads aired on programs with actual audiences over 35% that had

been projected to have audiences under 35%. Although it is not possible to predict the

composition of the actual audience that will view a program, when studios advertise on programs

with an estimated youth audience approaching 35%, it is likely that they will exceed that threshold

from time to time.

It is also possible that audience data for some of these programs on the precise dates ads aired

would indicate youth audience shares below 35%. At least some of the programs, such as

Jackass, Road Home, and 106th & Park, would very likely have been projected to have youth

audiences above 35%, however, because the programs and/or the day part and channel on which

they are aired perennially reach an audience over 35%. See note 25, infra.

25. The Commission’s television monitoring suggests that at least five movies were advertised on

programs with a youth audience of 35% or greater. For example, ads for MGM’s Original Sin

appeared on Jackass, WWF Smackdown, and Drew Carey; Sony’s Brother on 106th & Park,

Jackass, and Sunday Night Heat; Sony’s Baby Boy (repeatedly) on Jamie Foxx, WWF

Smackdown, and Sunday Night Heat; 20th Century Fox’s Kiss of the Dragon on The Simpsons

(repeatedly), Fresh Prince, Moesha, Jamie Foxx, Jackass, Home Improvement, and Drew Carey;

and Warner Bros.’ Swordfish on Jamie Foxx.

Data identifying the programs on which each ad for violent R-rated films first aired – or “first

airing” data – showed ads for two films on programs likely to have had an over 35% youth

audience. Ads for Baby Boy first aired on Jackass (38% youth audience according to Nielsen)

and Sister Sister (40%). Sony/Columbia Pictures did not commit to advertise only on programs

with youth audiences under 35%, so this advertising does not necessarily violate any specific

commitment. Sony did commit, however, to review its advertising practices to avoid

inappropriately specifically targeting children. Also, an ad for Exit Wounds first appeared on

MTV’s Road Home, at a time of day that had a 50% youth audience according to Nielsen data.

Warner Bros. did commit to avoid advertising on programs with a 35% youth audience. It is not

clear whether this placement was a result of a mistake by a Warner Bros. ad buyer or by MTV, or

whether the ad was intentionally aired at that time.

Note that the audience data provided here for syndicated programs are for the particular

“spot” markets where those programs were aired. Therefore, these data do not correspond to the

Nielsen data reported in Appendix C, which reflect the audience nationwide.

26. See April 2001 Report, Appendix A.

27. One studio analysis indicated that there were eight prime-time network programs – all on one

of two networks – with a 35% youth share in the fourth quarter of 2000; in syndication, there

were only six programs over 35%. There were no programs over 35% during late night network

television, and only children’s programming (such as Saturday morning programs) exceeded that

percentage during the networks’ early morning day part. Data are for shows airing more than

once in the same time period.

28. These were the top ten Nielsen-ranked programs in terms of the number of viewers 2-17 years

old. Of the top ten syndicated weekday programs based on the number of viewers 2-17 years old,

only three have a youth audience share over 35%.

29. As noted in n.20, supra, the three studios that submitted documents to the Commission for

this report used television demographic data for people 18 and above. Teens age 17 make up

approximately 1.4% of the U.S. population, see Resident Population Estimates of the United

States by Age and Sex: April 1, 1990 to July 1, 1999, with Short-Term Projection to November

1, 2000 (Population Estimates Program, Population Division, U.S. Census Bureau), and make up

a slightly larger percentage of the television viewing audience. A program with a 35% under-18

audience would have a lower percentage of under-17 viewers. The size of the difference would

vary depending on the particular program.

30. These programs aired in December 2000. It is likely that parents watching these programs

with their children make up a portion of the audience for these programs, reducing the percentage

of children in the measured audience.

31. These programs were identified in another studio’s media plan, for a PG-13 film, as “Teens”

programs.

Even studio marketing plans that expressly target teens advertise on programs with youth

audience shares below 35%. This was evident from the media plans examined by the Commission

for the September 2000 Report which found that youth-targeted films were primarily advertised

on programs with a youth audience share below 35%, and even shows with 22% age 6-17

audiences were characterized in media plans as “youth-targeted.” It was also evident from the

media plans examined for this Report for the two PG-13 films that expressly targeted teens. Only

20 of 125 programs on which these PG-13-rated movies were advertised had a youth audience of

35%.

32. It is possible for studios to evade these requirements, if they choose to do so, by making

“spot” buys in local markets instead of nationwide buys directly from the network. See

September 2000 Report at n.86.

33. September 2000 Report at 17-18.

34. June to September 2001 issues of the following 17 comic books and magazines – all with a

substantial youth audience – were reviewed to assess ad placement: 100% Independent

PlayStation; CosmoGirl; DC Comics; Electronic Gaming Monthly; Game Pro; Marvel Comics;

Metal Edge; Nintendo Power, Right On!; Seventeen; Teen; Teen Movieline; Teen People;

Thrasher; Tips & Tricks; WWF; and YM. See Appendix C for additional details.

35. In April, the Commission also reported it found no ads for R-rated films in youth-oriented

publications. April 2001 Report at 6.

36. Demographic data are not available on radio audiences for children under age 12.

Nevertheless, some stations have audiences with 35% of the listeners in the 12-17 age group, and

in some cases almost 50% of the audience in that age group.

37. Although that studio apparently did in fact advertise during restricted day parts on some

occasions, its compliance with that policy in general suggests that those placements were made

mistakenly. On other occasions, when the studio’s tracking indicated that some radio buys were

proposed for restricted times, those buys were not made.

38. Some of these PG-13 films were targeted at audiences as young as six years old. September

2000 Report at 15.

39. September 2000 Report at 16.

40. All but one MPAA member, plus Dreamworks, agreed that they would request that theaters

not show trailers for R-rated violent movies before G- or PG-rated films. See Marketing Violence

to Children II: Hearing Before the Senate Comm. on Commerce, Science and Transp., 106th

Cong. (Sept. 27, 2000), Fed. News Serv., LEXIS, Legis Library, Hearng [sic] File. Paramount

Pictures, while not adopting the industry policy with respect to trailers before PG-rated films, did

agree to request theaters not to show trailers for violent R-rated films before G-rated films.

NATO pledged that each member theater would not show such trailers before any G or PG film,

and only before PG-13 films if the trailers are consistent in tone and content with the feature film.

41. The few violations of the pledge not to run trailers for R-rated films before G- or PG-rated

feature films appeared to be the result of decisions by individual theater operators. A few NATO

member theaters showed trailers for R films before PG-13 films that were arguably inconsistent in

tone and content with the feature film.

42. The Commission contracted with TES, a commercial trailer checking service. It checked 125

theaters across the country showing Tomb Raider, 128 showing Atlantis, and 85 showing

Princess Diaries. The check took place June 15-17 and August 3-5, 2001. Princess Diaries was

the only major G-rated movie release during summer 2001.

43. The Commission checked more theaters and more screens than had been tested previously. It

found trailers for five PG-13-rated films shown before the G-rated Princess Diaries; most of these

films’ trailers were shown in only a few theaters. These trailer placements do not violate either

the MPAA’s or NATO’s commitments. It should be noted that incompatibility of trailers with

feature films – whether trailers for R-rated films before PG-13 features or trailers for PG-13 rated

films before PG- or G-rated features – does give rise to complaints from parents. See, e.g., Cindy

Richards, Terror in the Trailers, Chicago Sun-Times (July 25, 2001) at 37 (suggesting that

exhibition of trailer for PG-13-rated Planet of the Apes before PG-rated Shrek was inappropriate).

44. Showing trailers for R-rated films before PG-13-rated features does not violate MPAA

commitments, and only violates NATO’s pledge if the two films’ tone and content are

inconsistent. Theaters frequently preview R-rated movies before PG-13 films.

45. One studio requested that a trailer for an R-rated film be shown before one PG-rated feature.

46. The NATO and MPAA initiatives do not forbid the exhibition of trailers for films likely to

garner an R-rating – but not yet rated – before G or PG films. Yet, only one trailer for an unrated

film that was later rated R was shown before a G- or PG-rated movie – a trailer for Universal’s

then-unrated American Pie 2 was shown before PG-rated Atlantis at one theater. American Pie 2

was not rated R on the basis of violent content, however.

47. September 2000 Report at 17. The Commission found that street marketing teams distributed

items at places popular with teens, such as malls, teen clothing stores, sports events, high schools,

youth organizations, and arcades. The Commission did not review promotional activities in its

Spring Report.

48. In one instance, free passes to an R-rated film were distributed to students through a high

school.

49. PG-13-rated film promotions continued to be targeted to high school groups and youth

organizations, but there is no evidence that the promotions were directed to children under age

13.

50. The Commission reviewed Nielsen//NetRatings demographic data on 28 Web sites on which

the studio advertised. Of these 28 Web sites, five had youth audiences over 35%, and two more

had youth audiences over 30%.

51. One exception was a third party’s promotional campaign for one product related to an R-rated

film. The product’s marketing was directed in part to snowboard shops, and street teams were

sent out to hype the product at World Wrestling Federation tours. Ads were featured in MTV

radio, MTV.com, wrestling programs, and MTV. The third party assured the studio that the

“marketing campaign will focus on outlets which appeal to all age groups, such as MTV and the

[WWF].” As noted above, MTV is a key outlet for marketing to youth on television. See supra

note 21. Further, wrestling programs attract substantial youth audiences. See Appendix C at A2.

52. No such special requests were made for any of the six films that the Commission reviewed.

53. September 2000 Report at 55.

54. The Commission reviewed ads for violent R-rated movies from seven studios.

55. See supra note 34.

56. In addition to the 17 magazines with a substantial youth audience that were reviewed to assess

ad placement, the following seven publications (June to September 2001 editions) were reviewed

to assess whether ratings and rating reasons were provided: Computer Gaming World; Expert

Gamer; PC Gamer; Rolling Stone; Spin; Vibe; and Wizard.

57. The Commission reviewed ads in the following newspapers with a general circulation (not

targeted to children): Atlanta Journal-Constitution, Boston Globe, Chicago Sun-Times, Chicago

Tribune, The [Cleveland] Plain Dealer, Dallas Morning News, Los Angeles Times, [New York]

Newsday, New York Post, New York Times, San Francisco Chronicle, San Jose Mercury News,

Seattle Times, Seattle Post-Intelligencer, and Washington Post. See Appendix C, Table H.

58. Fourteen ads did not include the rating reasons.

59. In its review for the April 2001 Report, the Commission found more than 30% of the ads

unreadable; for this review it found less than 20% unreadable. Of 1322 ads reviewed, 699 were

clearly readable, 339 were small but marginally readable, and 270 were unreadable.

60. The Commission reviewed inserts from Best Buy, Circuit City, Kmart, Toys ‘R’ Us,

CompUSA, Target, Staples, and Amazon.com. Best Buy clearly disclosed the film ratings. No

retailer provided rating reasons. It is possible that the rating information was not included in key

art provided to the retailers by the studios.

61. See September 2000 Report, Appendix H.

62. The site that did not provide the rating reason did link to rating information at another site.

63. The Commission examined the following 34 motion picture Web sites in July 2001: 3000

Miles to Graceland, Along Came a Spider, Amores Perros, Angel Eyes, Apocalypse Now Redux,

Baby Boy, Bones, Brother, Captain Corelli’s Mandolin, Collateral Damage, Crimson Rivers,

The Deep End, Deuces Wild, Exit Wounds, The Forsaken, Frailty, Ghosts of Mars, The Heist,

Impostor, Jeepers Creepers, Joy Ride, Kiss of the Dragon, Knockaround Guys, Memento,

Novocaine, One Night at McCool’s, O, The Salton Sea, Session 9, Sexy Beast, Swordfish, Tailor

of Panama, Weight of Water, and With a Friend Like Harry. Some of these films were released

by studios that are not MPAA members.

64. There were exceptions. In some cases, rating information was absent altogether. For

example, Commission staff could not find any rating on the sites for three movies from Lions Gate

(Amores Perros, Frailty, and The Weight of Water). Newmarket’s Memento site did not include

rating information; furthermore, when browsing the site, a visitor could view a picture of a dead

body with a bloody, nearly decapitated head. The sites for Warner Bros.’ 3000 Miles to

Graceland and USA Films’ Session 9 required the visitor to navigate through the site in order to

find the rating. To view the rating for Session 9, it was necessary to click on an unmarked link to

another screen where a small, blurry rating could be found at the bottom of the page.

65. Warner Bros. had very clear and visible links to these three sites on its movie sites.

66. In the review for the April 2001 Report, 30 of the 35 sites checked (86%) displayed the film’s

rating and 25 of 35 (71%) provided the film’s rating reason.

67. The Commission examined the following motion picture theater Web sites: AMC, Carmike,

Century Theatres, Cinemark, Clearview Cinemas, Edwards Theatres Circuit, General Cinemas,

GKC Theatres, Goodrich Quality Theatres, Hoyt’s Cinemas, Kerasotes Theatres, Loews

Cineplex, Marcus Theatres, National Amusement, Pacific Theatres, Regal Cinemas, Silver

Cinemas/Landmark Theatres, United Artist, and Wallace Theater Corp. and reviewed practices

pertaining to the following motion pictures: Baby Boy, Brother, Kiss of the Dragon, Made,

Memento, Scary Movie 2, Sexy Beast, and Swordfish.

68. Several of the chains, including Century Theatres, Cinemark, General Cinemas, and Regal

Cinemas, provided especially extensive rating information. National Amusement had an excellent

feature for providing rating information: the site displayed a small rating guide on nearly every

page that linked to more extensive information. The sites for AMC, Century Theatres, Edwards

Theatres Circuit, and Wallace Theater Corp. had clear warnings that children under 17 would not

be admitted to R-rated features at their theaters without a parent or guardian.

69. All of these sites provided a link to the MPAA web site, while three also linked to

filmratings.com. National Amusement linked to both of those sites, as well as to

parentalguide.org.

70. Movietickets.com had a warning that: “Children under 17 will not be admitted without an

adult.” The third ticket seller, Moviefone.com, set up the ticketing process so that one could not

purchase only a “child” ticket to an R-rated movie. None of the sites required purchasers to

provide age to purchase a ticket to an R-rated movie.

71. The retailers were Amazon.com, BestBuy.com, Reel.com, SamGoody.com, and

TowerRecords.com. Commission staff reviewed practices pertaining to the following movies:

The Claim, The Gift, The Pledge, Proof of Life, Snatch, and Wes Craven’s Dracula 2000.

72. Amazon.com stated that R-rated videos were “[n]ot for sale to persons under age 18.”

73. Theaters and video retailers also could improve their practices by disclosing rating reasons in

their Web sites.

74. The 2000 survey found that slightly more than half (54%) of the theaters enforced the

MPAA’s restriction that children under age 17 must be accompanied by an adult to see R-rated

movies. Almost half (48%) of the cashiers asked the shopper’s age at point of sale. See

September 2000 Report, Appendix F.

75. See supra note 3.

76. See Appendix B for a discussion of the survey methodology and results.

77. See id., Table I.

78. In the September 2000 Report, the Commission, as it has done for the other reports, applied

the age limit (17) of the movie and electronic game industries’ self-regulatory programs to its

analysis of ad placements for music recordings. Its review of marketing plans for 55 recordings

revealed detailed plans to market the recordings in media that would reach a majority or a

substantial percentage of teens. The plans for 15 of the 55 explicit content recordings expressly

identified teenagers as part of their target audience. See September 2000 Report, Section V.

79. September 2000 Report at 54.

80. In recent testimony, Hilary Rosen stated the industry’s position:

[T]he FTC repeatedly criticizes us [the music recording industry] for

marketing inappropriate content to teens. Put simply, the RIAA Parental

Advisory Program is not an age-based rating system. Therefore, all of the

criticisms of the FTC that we “are marketing material we have already

determined is inappropriate for children, to children,” is simply unfounded.

Statement of Hilary B. Rosen, President and CEO, Recording Industry Association of America,

House Subcommittee on Telecommunications and the Internet, July 20, 2001.

81. Prior to release of the September 2000 Report, the RIAA had recommended to its members

that advertising for explicit content recordings not appear in venues where the primary market

demographic was under 17, i.e., venues where 50% or more of the audience was 16 years of age

or younger. However, as described more fully in the April 2001 Report, the industry withdrew

this recommendation shortly after the September 2000 Report’s release. See April 2001 Report at

13.

In explaining the withdrawal of its proposal, the RIAA informed the Commission that its

adoption would increase the likelihood of law enforcement actions against its members and would

“discourage participation in the successful parental advisory program.” See Letter from Mitch

Glazier, Senior V.P., Recording Industry Ass’n of America, to FTC staff (undated but faxed Mar.

28, 2001) [hereinafter RIAA March 2001 Letter].

82. One company explained that if a recording bears the parental advisory label, the advertising

for the recording is consistent with that decision: “The judgment as to whether a particular

medium is appropriate for advertising or promoting a stickered recording is based on a variety of

factors, including, among others, the audience for such medium. [The company] vests discretion

in the heads of its labels to make decisions as to the media in which to advertise to promote such

label’s products, and such determinations are made by each label head on a case-by-case basis.”

Another company explained that each label considers “the appropriateness of each publication and

other media for advertising and marketing of a particular release in light of the content of that

release” and “whether to purchase television spots before 9 p.m. for stickered recordings for

which an edited version is not available.”

One company’s “Parental Advisory Guidelines Implementation Policy,” dated June 2001,

which reaffirms its commitment to the labeling system, provides that: (1) the head of each

recording label should take personal responsibility for overseeing the process; (2) each recording

label should be held accountable for implementing the company-wide labeling policy; (3)

determinations as to whether a particular recording should be labeled are to be made on a

case-by-case basis, taking into account the language and content of the particular recording in

context; (4) consumer advertisements for labeled recordings should include the parental advisory

label; (5) the recording companies should consider whether a recording is labeled in selecting the

appropriate media in which to advertise or promote that particular recording; and (6) that a

position should be created and filled by a senior officer with responsibility for overseeing

compliance with the policy.

This company also explained that:

inflexible policies cannot take into account the wide demographic range of many of the

media in which [it] may promote to advertise its recordings. Some media that

predominantly appeal to college-aged people, for example, may also be attractive to a

broad range of children and young adults.

83. Although the marketing materials for this recording focused less than the materials for other

recordings on advertising in media with a substantial teen audience, they still indicated planned

advertisements in Skateboarding magazine, an appearance on Total Request Live, and a review in

Seventeen magazine. See Appendix C for demographic data for popular teen television programs

and magazines.

84. These promotions usually involve advertisements, airplay of music videos, and appearances by

the artists. Because almost all the marketing materials for explicit-labeled recordings emphasized

the importance of placing music videos on these channels, the music videos, even if edited to

remove some explicit content, continue to play a key role in promoting the sale of explicit

recordings to an under-17 audience. As Hilary Rosen stated recently, “MTV has completely

changed the relationship between the artist, the image, and marketing to the music fan. It created

a new, and now completely necessary, component to artist development.” Billboard, July 28,

2001, p. 68. Videos do not indicate when they are based on explicit-content labeled albums.

85. See Appendix C. In addition, an MTV advertisement stated that for three years MTV has

“been the #1 cable network for 12-24 year olds.” See Advertising Age, May 22, 2000, at 49; see

also Advertising Age, Apr. 3, 2000, at 25. Similarly, an advertisement for The Box stated that it

is the “#1 cable network for teens 12-17 VPVH [viewers per viewing hour] in Monday-Sunday

prime.” The Hollywood Reporter Movies & the Media Special Issue, May 16-20, 2000, at S-21.

Other demographic data provided to the Commission by two of the companies for the September

2000 Report indicated that 42% of MTV’s audience is between the ages of 12 and 17, and that

83% of the audience of The Box is between the ages of 12 and 34. See also Jeffrey D. Stanger &

Natalia Gridina, Media in the Home 1999: The Fourth Annual Survey of Parents and Children,

at 11 (Annenberg Pub. Policy Ctr. U. Pennsylvania) (2000) (indicating that over 50% of children

ages 10-17 watched MTV each year from 1996 through 1999)); Viacom Form 10-K for the year

ending Dec. 31, 1999 at I-3 (“MTV targets viewers from the ages of 12 to 34” and “The Box

Network targets viewers from the ages of 12 to 34”). According to an interview with Curtis

Gadson, Senior VP of Entertainment Programming for BET, the core BET audience is viewers

between 12-34 and this group is its primary target. Barry Garron, Novel Ideas,

Billboard/Hollywood Reporter, Apr. 25, 2000, S-10, at S-11.

86. See Appendix C.

87. See Appendix C, Tables A and B for a list of the programs monitored.

88. The Commission’s television monitoring data show that 47 ads for explicit content recordings

ran during the eight weeks of these MTV programs. UMG ran 32 ads for What’s the Worst That

Could Happen Soundtrack, Baby Boy Soundtrack, Rush Hour 2 Soundtrack, Return of the

Dragon, Take Off Your Pants and Jacket, Devil’s Night, Concrete Law, First Born Second, The

Reason, and Broken Silence on: Total Request Live, Jackass, Direct Effect, 106th and Park, and

WWF Smackdown. BMG ran 10 ads for The Violator Album 2.0, The Saga Continues, and

Horrorscope on: 106th and Park, Total Request Live, and Sunday Night Heat. WEA ran five ads

for This Ain’t A Game on: Total Request Live and 106th and Park. EMI ran two ads for Tha

Last Meal on 106th and Park.

89. The Commission’s television monitoring data for the first airing of advertisements for explicit

content recordings showed that BMG ran ads for explicit content recordings on Daria and 106th

and Park; EMI ran ads for explicit content recordings on Direct Effect and 106th and Park; Sony

Music ran ads for explicit content recordings on Total Request Live and 106th and Park; UMG ran

ads for explicit content recordings on Total Request Live and 106th and Park; and WEA ran ads

for explicit content recordings on 106th and Park. See Appendix C, Section B.

90. See September 2000 Report, Section V.

91. The marketing documents submitted to the Commission discussed placing ads in numerous

magazines that have a majority or substantial percentage of readers under 18, including: Big

Brother, Black Beat, Heckler, Hit Parader, Metal Edge, Right On!, Seventeen, Teen People,

Thrasher, TransWorld Skateboarding, and Word Up. See Appendix C, Tables G and I, for

demographics for youth-oriented magazines.

92. See Appendix C, Table G, for a list of the publications.

93. The Commission examined advertisements for recordings placed in CosmoGirl, Metal Edge,

Right On!, Seventeen, Teen, Teen People, Thrasher, and YM.

94. No ads for explicit content recordings were found in the issues of CosmoGirl or Seventeen.

BMG ran ads in Metal Edge and Right On! EMI ran ads in Right On! and Thrasher. Sony Music

ran ads in Metal Edge and Thrasher. UMG ran ads in Metal Edge, Right On!, Teen, Teen

People, and Thrasher. WEA ran ads in Metal Edge, Right On!, and YM.

95. See Appendix C, Section III for demographic information from Nielsen//NetRatings.

96. September 2000 Report at 29.

97. www.riaa.com/Parents-Advisory-5.cfm.

98. See April 2001 Report at 5-18. In February 2001, the RIAA informed the Commission that

its members were focusing on compliance with the requirement that parental advisories appear in

print and Internet advertising, but that because print advertising must be reserved far in advance,

the complying print disclosures could take several months to appear. In March, the RIAA stated

it was considering a recommendation that all advertising for explicit content recordings (e.g.,

television, radio, and artist Internet sites) provide an advisory. See Letter from Mitch Glazier,

Senior V.P., Recording Industry Ass’n of America, to FTC staff (undated but faxed Mar. 28,

2001) [hereinafter RIAA March 2001 Letter], at 4. In addition, the National Association of

Recording Merchandisers (“NARM”) supported formulating a recommendation for the inclusion

of a standardized parental advisory in radio advertising for explicit content recordings. See Letter

from Pamela Horovitz, President, NARM, to FTC staff (Mar. 21, 2001) at 2.

99. RIAA June 28, 2001 Memo on Parental Advisory Implementation Efforts (on file with the

Commission). See also Statement of Hilary B. Rosen, President and CEO, Recording Industry

Association of America, Senate Committee on Governmental Affairs, July 25, 2001.

100. Id.

101. Id.

102. See www.riaa.com.

103. All of the companies held meetings with their senior personnel from the music labels, as well

as with the RIAA, in their efforts to implement the Revised Guidelines. Two of the companies

have appointed employees in charge of compliance for the company. One company has prepared

a “Parental Advisory Marketing Compliance Worksheet,” a checklist to ensure that advertising for

explicit content recordings complies with the RIAA and company-approved guidelines; another

company has issued a Parental Guidelines Implementation Policy that provides standardized,

detailed guidelines to assist compliance efforts. All companies have participated in meetings with

the RIAA to consider how the voluntary Guidelines might be expanded to provide parents with

further information about music.

One company pointed out that “while there may be some unavoidable lag time before the

fruits of these efforts can be seen (due to the fact that the marketing plans and promotion of

current albums have long been in place),” this does not diminish the company’s commitment to

compliance.

104. All of the companies require that television spots for labeled albums contain the parental

advisory label or text regarding the explicit content. One company requires radio ads for labeled

albums to contain a clear tagline “Parental Advisory, Explicit Content. Edited Version also

available” (if in fact an edited version is available); another company is considering a similar

disclosure: “Parental Advisory – Contains Explicit Content” for inclusion in its radio ads.

The companies also have developed written procedures for the clear and consistent use of a

parental advisory in print advertising for explicit content recordings. One company specifies that

the advisory must be “clear and conspicuous” in print ads. The other two companies adopted

specific size requirements for the parental advisory label or advisory text in their print advertising.

All the companies require the advisory label or advisory text to appear in all outdoor or “street”

advertising (e.g., billboards, bus shelters, and smaller posters) that mention a labeled album or

utilize its artwork. Two companies require an advisory at point of purchase and other retail

marketing materials.

The companies also require clear advisories in online promotions. One company stated that

artist Web sites that it owns or controls will include a parental advisory on pages that include

cover art images or sound samples.

105. One company requires placing a link to the parentalguide.org Web site on the home page of

all recording label Web sites that it owns or controls and requires the statement “To learn more

about parental advisory program, go to www.parentalguide.org” in print advertising of a certain

size. Another company has placed a link to parentalguide.org on the footer of each page, linking

it to the RIAA’s Web site. The third company requires “all label sites are to include a link to

parentalguide.org which is the website explaining the parental advisory program.”

106. Unit sales information provided to the Commission for twelve labeled recordings indicate

that the recording studios did not produce edited versions for two of the recordings. For nine of

the ten recordings sold in both explicit and edited formats, the explicit version accounted for 85%

or more of the sales. Unit sales information provided to the Commission for the September 2000

Report also indicated that explicit versions accounted for the vast majority of sales, ranging from

a high of 99.5% to a low of 78% of sales as compared to the edited versions. For 19 of the 25

recordings (78%) for which the Commission had unit sales information, sales of the explicit

version accounted for 90% or more of total unit sales. See September 2000 Report at note 139.

107. One company will notify its retail partners of all current labeled releases to enable retailer

web site compliance and in the future will only send to retailers artwork that displays an advisory.

One company also has enhanced its Web site for business partners where explicit content is

flagged and an advisory made available.

108. This policy states that retailers will not be eligible for reimbursement for ads that do not

display the advisory.

109. CosmoGirl, Metal Edge, Right On, Rolling Stone, Spin, Seventeen, Teen, Teen People,

Thrasher, Vibe, and YM.

110. BMG ran 17 ads for explicit content recordings: 12 with no advisory, three with an

unreadable advisory, and two with a clear advisory. EMI ran six ads for explicit content

recordings: four with no advisory, one with an unreadable advisory, and one with a clear

advisory. Sony Music ran three ads for explicit content recordings: all with clear advisories.

UMG ran 37 ads for explicit content recordings: 32 with no advisory and five with a clear

advisory. WEA ran 13 ads for explicit content recordings: ten with no advisory and three with a

clear advisory. Independent recording labels ran 19 ads for explicit content recordings: 16 with

no advisory and three with an unreadable advisory. Music retailers ran 16 ads for different

explicit content recordings: six with no advisory, seven with an unreadable advisory, and three

with a clear advisory.

111. Advertisements for the following recordings contained clear and conspicuous disclosures:

One Twelve Part III, Instructions (video), The Saga Continues, Thug On Da Line, Project

English, The Very Best of DAS EFX, Break The Cycle (retailer ad), Greatest Fits, Iowa,

Tweekend, God Hates Us All, Strictly 4 Da Streets, What’s The Worst That Could Happen

Soundtrack (retailer ad), Miss E ... So Addictive (retailer ad), This Ain’t A Game, Wu Chronicles

Chapter II.

112. The Commission selected the Web sites based on a listing of the top 200 albums as ranked

by Billboard on June 16, 2001. The official site was the artist, band, recording label, or recording

company site.

113. The RIAA states that it has clarified to its members that “the parental advisory logo and any

accompanying language indicating that an edited version is available used in consumer print

advertising should be ‘clear and conspicuous.’” RIAA March 2001 Letter at 3.

114. Although several recording company sites provide an advisory, many of the online advisories

are still provided by retail sites. Many of the recording sites reviewed allowed a consumer to

purchase an album by linking directly to a specific page on a retail site. It is these retail Web sites

that often contain the improved disclosures.

115. See www.riaa.com/Parents-Advisory-5.cfm.

116. Best Buy provided the disclosure “parental advisory” near the picture of the cover art, but

not throughout the purchasing process. CDNow at times used the terms “explicit” and “edited”

next to the album cover art, but in other cases either provided no information regarding an

album’s explicit content or provided this information buried several screens down, after the

consumer could purchase, read about, and listen to clips from the album. Tower Records would

at times use the disclosure “explicit” but more often provided the cryptic abbreviation “PA”

throughout the purchasing process.

117. See September 2000 Report at 36.

118. See Appendix B.

119. Id. The survey collected data on whether the shoppers saw any sign, poster, or other

information about the labeling system or the retailer’s enforcement policy, not whether such

information was actually posted. The NARM recently told the Commission that music retailers

are renewing efforts to ensure that information about the advisory is posted in stores.

120. September 2000 Report at 45.

121. The industry’s Advertising Code of Conduct (“AdCode”) (on file with the Commission)

prohibits the marketing of games to children under the age designated in the rating. The AdCode

recently was revised, and some of the revised provisions became effective March 14, 2001. Other

provisions, such as the guidelines for marketing M-rated games in television, print, and Internet

media, became effective in November 2001. In this report, citations to “AdCode” refer to the

unrevised AdCode provisions that were in effect at the time the Commission compiled information

for this report. Where relevant, the revised AdCode provisions are referred to and cited as

“Revised AdCode.”

122. IDSA explained the different percentages used for print and television advertising as follows:

The distinction between the 45% under 17 audience allowed for print publications and the

35% under 17 audience allowed for TV advertising recognizes that the most effective and

in some cases the only cost-effective way to reach adult game enthusiasts is through

magazines that have a substantial adult readership along with some younger readers. The

35% demographic for TV advertising is utilized because TV is a mass medium and does

not present the same issues when seeking to reach an adult audience.

See Guidelines Addressing Marketing of Mature Rated Games to Persons Under 17, attached to

Letter from Douglas Lowenstein, President, IDSA, to FTC staff (Mar. 28, 2001) [hereinafter MRated Game Ad Guides] (on file with the Commission) (emphasis in original).

The Guidelines also set a 45% under-17 audience limit for advertising on Internet sites, and

oblicate game publishers who license third parties to sell action figures and other products based

on their M-rated games to require that packaging for the products include the following

statement: “This [state item] is based on a Mature rated video game.” Id.

As noted previously, television audience demographic data cited in this report and Appendix

C indicate the programs’ under-18 audience share. The ESRB’s self-regulatory rating system

only addresses the suitability of content of M-rated games for persons under-17. Because the

ESRB’s advertising placement guidelines for television are just coming into effect, it is not clear

the industry will use demographic data showing programs’ under-17 audience share or the under18 audience share.

123. See April 2001 Report at 21.

124. The revised AdCode calls for a 45% threshold for print advertising. Revised AdCode, supra

note 121, at 28.

125. The marketing plans for five games indicated that radio promotions had been planned. The

Commission was not provided with sufficient information – namely, radio stations and daypart

advertising times – to determine whether these promotions were targeted to a substantial under17 audience.

126. The media plan for one of these games went through numerous iterations. The first version

indicated “M12-17” as the primary target and listed teen-popular programming such as That 70’s

Show, Malcolm in the Middle, Simpsons, Titus, Smackdown, Xena, and programming on MTV.

The fifth version, which post-dated the Commission’s September 2000 Report, still listed M12-17

as the primary target, but shows like Malcolm in the Middle, Simpsons, King of the Hill, and

Titus no longer appeared on the plan. The seventh version listed the primary target as “M18-34,”

with no mention of M12-17. However, with the exception of XFL Football and the Fox show

Freakylinks, the shows listed on the plan were identical to the shows on the previous plans which

had listed M12-17 as the primary target.

127. Revised AdCode, supra note 121, at 17.

128. Although plans for four of these console games predate the September 2000 Report, the

Commission confirmed that ads for all of these games ran in the media outlined in the marketing

plans.

129. In preparing the chart, Rating Pending (“RP”) ads were included in the rating category that

the game later received. The IDSA’s AdCode provides that if “a title has a ‘Rating Pending’

status, companies must use their best efforts to place ads for that title only in publications or

outlets whose audiences would be appropriate for the content portrayed in the title.” Revised

AdCode, supra note 121, at 15. “Such efforts should be based on the companies’ good faith

expectations regarding the likely rating.” Id. The chart does not include 24 ads for games that as

of October 2001 had not yet received their final rating.

130. A readership study commissioned by GamePro revealed that more than 45% of GamePro

subscribers are under age 17, but that less than 45% of GamePro newsstand purchasers are under

age 17. GamePro informed the Commission that when these subscribership and newsstand

demographics were combined, less than 45% of all GamePro readers were under age 17. In

response, GamePro will create two distinct versions of its magazine – one for subscribers that has

no ads for M-rated games, and one for the newsstand that contains M-rated game ads.

131. The April issue of Electronic Gaming Monthly carried four advertisements for M-rated

games. The Preamble to the new M-rated Game Ad Guides, which have not yet gone into full

effect, expressly notes that industry members are free to adopt stricter guidelines for their own

marketing practices. See M-Rated Game Ad Guides, supra note 122.

132. The Commission examined Internet audience statistics over a three month period, May

through July 2001. According to Nielsen//NetRatings data, 2- to 17-year-olds comprised about

20% of the general Internet population during this time period. In the chart below, percentages

indicate the portion of the Web site’s audience between age two and 17, unless a different age

range is indicated in parentheses.

Web Site

May 2001 (2-17)

June 2001

July 2001

avault.com

28%

26% (12-17)

20% (12-17)

cdmag.com

32%

N/A

gamespot.com

33%

31%

38%

gamespy.com

32%

36%

31%

ign.com

43%

46%

47%

ugo.com

23%

39%

33%

A plan for a T-rated game, which was targeted to boys 12 to 17, specifically noted that ign.com

provides “[s]trong delivery” against that target audience.

133. Revised AdCode, supra note 121, at 28.

134. AdCode, supra note 121, at VII.A.

135. The Revised AdCode was effective as of March 14, 2001. Revised AdCode, supra note

121, at 5.

136. For M-rated games, the required voice-over is now “rated Mature,” in place of “rated M.”

137. The Commission’s limited April review found that most print ads contained the ratings and

the content descriptors as specified by the ESRB, although a small percent (15%) failed to display

the required disclosures. A spot review of television programs showed broad compliance with the

voice-over requirement. In contrast, the September 2000 Report found numerous examples of

ads without any rating information.

138. Revised AdCode, supra note 121, at 17-18. The required voice-over, “Rated M for

Mature,” applies to television spots longer than 15 seconds. Id. For spots 15 seconds or less, the

required voice-over is shortened to “Rated Mature.” Id. ESRB requires the rating icon to be 22

scan lines in size. Id.

139. These ads either: a) displayed no rating icon at all; b) displayed no descriptors; c) left off a

descriptor assigned to the game; d) changed the wording of the descriptor in a way that

understates the level of violence, sex, or bad language in the game; e) for RP ads, left off the

ESRB-required box containing the phone number and Web site address for the ESRB to check if

the game had subsequently received a rating; or f) used rating icons that were substantially smaller

than the size required by ESRB regulations. These regulations do not require advertisements for

multiple titles to include descriptors (although the Commission recommended that all ads display

both the rating and the descriptors). Those multiple title ads were counted as compliant if a

properly sized rating icon, e.g., E-T, appeared in the ad.

140. A company was considered in substantial compliance where the ad used a rating icon that

was slightly smaller than the size required by ESRB regulations. Even with the smaller size, these

icons were clear and easily noticed and read.

141. Two exceptions were Eidos (with several ads for two T-rated games that omitted the

descriptors and used rating icons 40% smaller than required by the AdCode) and Konami (with

several ads that used rating icons 40% smaller than required by the AdCode). It should be noted

that Eidos ads in the August and September issues displayed the descriptors and used properly

sized rating icons.

142. In July of 2001, ESRB notified publishers of an increase in the size of the rating icon for

print ads, that must be used by the February 2002 issues of print publications. Memoranda from

Lisa Schnapp to ESRB Participating Companies, Revisions to Advertising Code of Conduct (July

26, 2001) (on file with the Commission).

143. Take 2's poster did display the game’s rating, but the others failed to provide any rating

information. It is not clear why these companies failed to treat the posters as ads requiring

rating and content descriptors. Arguably they fall into the category of “promotional ‘giveaways’” (key chains, T-shirts, hats, etc.) that are not subject to the disclosure requirements of the

AdCode, although posters, unlike these other items, can easily display the rating information.

144. Instead, these advertisers almost always used the old RP icon that includes that information

under the RP designation, but in very small, almost unreadable, print.

145. According to the Interactive Entertainment Merchants Association (“IEMA”), which

represents 19 of the top 20 retail companies in the video and computer gaming sector (K-B Toys

is not a member), all member companies are required to make their best efforts to display

educational information about the ESRB system, and are “encouraged” to enforce the rating

system. The IDSA and the ESRB also have asked retailers to adopt programs that restrict

children’s access to M-rated games. A number of the major retailers have done so, including

Toys ‘R’ Us, Kmart, Wal-Mart, Target, Circuit City, Staples and CompUSA.

146. Chips & Bits mail-order ads feature dozens of games. No rating information is provided for

most of the games listed in these ads. For a few games, the ads display the games’ cover art,

which usually shows the ESRB rating icon.

147. CompUSA also appears to be increasing the size of the rating icon on the clip art for Mrated games featured in its Sunday inserts.

148. AdCode at VII.B, D. The provision for online sales can be difficult to apply because there

may be several Web pages where game information, such as price, is provided. For purposes of

this Report, the Commission counted a site as compliant as long as rating information appeared

on a Web page at some point during the purchase process. The Revised AdCode, which will be

fully enforced in November 2001, states that the icon and descriptors must appear “[o]n any page

where a game product can be purchased.” Revised AdCode, supra note 121, at 29. Because a

game often can be purchased from several different pages, the Revised AdCode would appear to

require multiple disclosures.

149. AdCode at VIII.C. The Revised AdCode requires the display of both the rating icon and

content descriptors prior to download of the demo. Revised AdCode, supra note 121, at 29.

150. In the April 2001 Report, the Commission commended and criticized a number of sites for

the manner in which they displayed rating information. The good practices appear to be

continuing, but the poor practices either remain unchanged or have worsened.

With regard to good practices:

II The sites for Tecmo’s Deception III: Dark Delusion, Capcom’s Onimusha Warlords, and

Acclaim’s Turok 3: Shadow of Oblivion continue to display large rating icons.

II Since the April 2001 Report, the sites for Sierra’s Gunman Chronicles and Infogrames’

Koudelka have made the ESRB rating icon clear and conspicuous. The icon on the Gunman site

also links directly to the ESRB site.

With regard to poor practices:

II The Turok 3 Web site remained unchanged since the April 2001 Report. It still

simultaneously warns visitors that they must be 17 or older to view game clips and entices them to

view the clips by clicking a hyperlink labeled “Take me to the Gore.”

II The April 2001 Report noted that content descriptors on two sites were unlikely to be

seen by viewers – Sony’s site for Syphon Filter 2, which had placed the descriptors below the

screen break, and Electronic Arts’ Undying site, which required the visitor to place the cursor

over the rating icon to view the descriptors while on the site’s homepage. Neither site has

improved in this respect, although, as noted below, the Undying site also demonstrated several

good practices, including the prominent display of descriptors during the purchase process. In

fact, the content descriptors appear to have been removed from the Syphon Filter 2 site

altogether.

151. Three of the five game sites that did not display a “Mature” rating were foreign. Silent Hill

2 and Illbleed both have Japanese Web sites, and Typing of the Dead is published by Empire

Interactive Europe Ltd.

152. In the context of online disclosures, the Commission has advised against Web page formats

that discourage scrolling, such as several inches of blank space between the end of the text and

the bottom of the screen or putting a lot of unrelated information – either words or graphics –

between a claim and a disclosure. See Federal Trade Commission Business Education

Publication, Dot Com Disclosures: Information about Online Advertising (May 2000), at 7.

153. Take 2 Interactive’s Green Berets site had very prominent descriptors, displayed in large

black letters inside a white box that is larger than, and next to, the rating icon.

154. In the context of hyperlink disclosures, the Commission has recommended that the hyperlink

be labeled to convey the importance, nature, and relevance of the information to which it links. A

hyperlink should give consumers a reason to click on it. See Dot Com Disclosures, supra note

152, at 8. In a similar vein, consumers should be given a reason to roll the mouse over the rating

icon – i.e., they should be provided a prominent textual cue that this action leads to the content

descriptors.

155. Eight of the 15 sites had both a trailer and demo available. Seven sites had just the trailer,

and one site had just the demo. Two of the sites – Alice and Clive Barker’s Undying – provided

no rating icon or content descriptors, but did state the demo and trailer were “suitable for mature

viewers” or words to that effect, and therefore were counted as compliant for purposes of this

Report. The site for one of the games contained a blurry rating icon; this site for the game,

Fallout Tactics, also was counted as compliant. Although the Revised AdCode is not yet fully

effective, the site for one game, Gunmen Chronicles, provided the rating icon and content

descriptors before the demo or trailer could be downloaded or viewed.

156. This age-screening device is by no means fool-proof. Visitors need only hit the “back”

button on their browsers and input a different age to access the demo.

157. For purposes of the summary chart of AdCode Issues presented in the text, a site was

deemed to have provided rating information where game information, such as price, was provided

so long as a visitor to the site would encounter the rating information at some point in the

purchase process. For example, the sites reviewed for this Report often provided rating

information on a product specific page which usually described the game, stated a price, and

invited the visitor to purchase the game by clicking on a hyperlink labeled “buy it” or “buy it

now.” Upon clicking the hyperlink, the visitor would be taken through a series of purchase and

checkout pages that would not necessarily provide rating information. Because the visitor would

have encountered rating information at the initial phase of the purchase process, such sites were

deemed to have provided rating information on the appropriate Web page.

158. Sites for games published by Electronic Arts (including Quake III, Alice, and Clive Barker’s

Undying) consistently displayed prominent rating icons and content descriptors on the pages

through which visitors navigate when making an online purchase. At the initial purchase page, the

“Mature” rating icon was large and served as a link to the ESRB Web page that defined the

ratings. In contrast, the site for Valusoft games (including CIA Operative, Vietnam 2, and WWII:

Normandy) gave no indication of the rating or content descriptors during the purchase process.

159. These five games were Rockstar Games’ Max Payne, Sony’s Syphon Filter 2 and

Extermination, and Electronic Arts’ Alice and Clive Barker’s Undying. The warnings preceding

the two Sony sites were particularly prominent, featuring a large rating icon and box with content

descriptors and requiring visitors to certify that they are 17 or older before entering the sites.

160. These games were Capcom’s Onimusha: Warlords and Heavy Metal: Geomatrix and

Blizzard Entertainment’s Diablo II.

161. For the September 2000 Report, the Commission’s spot-check of five online retailers’ Web

sites revealed that the sites generally indicated that the product had a Mature rating in a place the

user would likely see it, either by displaying the “M” icon or the word “Mature.” Only one game

retailer provided content descriptors. For the April 2001 Report, the Commission’s spot-check of

six online electronic games retailers’ sites found that most displayed a game’s rating on the

product specific page, but only a few provided descriptors for the games surveyed.

162. Amazon.com and ToysRUs.com use the same Amazon.com site. For the purpose of this

report, they will be referred to separately.

163. This percentage could be lower, depending on how a visitor locates a game on a retail site.

If, instead of searching a site for a particular game title, a visitor searches for a list of all games

sold for a particular game system (e.g., PC, Playstation 2) and classified under a particular genre

(e.g., Action/Adventure, Shooter), the visitor usually is taken to a “browsing” page that displays a

list of game titles. In the review conducted for this Report, none of the retailers displayed ratings

on their checkout pages, while all of the retailers allowed visitors to go directly from the browsing

pages to the checkout pages, bypassing the product-specific pages where rating information

usually was provided. Thus, a visitor to a retail site like BestBuy.com searching for a game by

category – as opposed to by the specific title – could purchase a game without ever having to

view a game rating.

164. BestBuy.com was the only retailer that did not use the ESRB rating icon, instead displaying

the words “ESRB Rating: M = Mature” in the text next to the cover art for the game.

165. Amazon.com and ToysRUs.com had links to rating information from their browsing pages as

well. None of the sites imposed an age-based restriction on purchasers of M-rated games.

166. However, the industry could improve its practices by requiring the disclosure of content

descriptors in television advertising (now done routinely by advertisers of motion pictures), by

requiring that descriptors be more clearly disclosed on industry Web sites, and by increasing

compliance with new disclosure requirements when games are not yet rated.

167. See supra note 145.

168. This also suggests some improvement since the Commission’s September 2000 Report,

where the Commission found that 81% of the underaged shoppers were able to purchase an Mrated game at the four retailers that had adopted the “Commitment to Parents” program at the

time of the Commission’s shop.

169. In addition to permitting credit card purchases, one other retailer permitted purchases by gift

card, and two other retailers permitted purchases by gift card, personal check, or money order,

potentially making it easier for children under 17 to make an online purchase of an M-rated game.

170. Although closely connected with the ToysRUs.com Web site, Amazon.com did not offer this

intermediate stop in the “Kid-Safe Zone.”

171. See Appendix C (identifying programs monitored by the Commission). The monitored

programs had a substantial percentage of young viewers, or had a large number of youth viewers.

CONCURRING STATEMENT OF COMMISSIONER ORSON SWINDLE

CONCERNING THE FEDERAL TRADE COMMISSION’S SECOND FOLLOW-UP

REPORT TO THE CONGRESS ON THE

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