```

[House Hearing, 107 Congress]
[From the U.S. Government Publishing Office]

    AN EXAMINATION OF THE ENTERTAINMENT INDUSTRY'S EFFORTS TO CURB 
                 CHILDREN'S EXPOSURE TO VIOLENT CONTENT

=======================================================================

                                HEARING

                               before the

          SUBCOMMITTEE ON TELECOMMUNICATIONS AND THE INTERNET

                                 of the

                    COMMITTEE ON ENERGY AND COMMERCE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED SEVENTH CONGRESS

                             FIRST SESSION

                               __________

                             JULY 20, 2001

                               __________

                           Serial No. 107-60

                               __________

       Printed for the use of the Committee on Energy and Commerce

 Available via the World Wide Web: http://www.access.gpo.gov/congress/
                                 house

                               __________

                  U.S. GOVERNMENT PRINTING OFFICE
74-844                     WASHINGTON : 2001

____________________________________________________________________________
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                    ------------------------------  

                    COMMITTEE ON ENERGY AND COMMERCE

               W.J. ``BILLY'' TAUZIN, Louisiana, Chairman

MICHAEL BILIRAKIS, Florida           JOHN D. DINGELL, Michigan
JOE BARTON, Texas                    HENRY A. WAXMAN, California
FRED UPTON, Michigan                 EDWARD J. MARKEY, Massachusetts
CLIFF STEARNS, Florida               RALPH M. HALL, Texas
PAUL E. GILLMOR, Ohio                RICK BOUCHER, Virginia
JAMES C. GREENWOOD, Pennsylvania     EDOLPHUS TOWNS, New York
CHRISTOPHER COX, California          FRANK PALLONE, Jr., New Jersey
NATHAN DEAL, Georgia                 SHERROD BROWN, Ohio
STEVE LARGENT, Oklahoma              BART GORDON, Tennessee
RICHARD BURR, North Carolina         PETER DEUTSCH, Florida
ED WHITFIELD, Kentucky               BOBBY L. RUSH, Illinois
GREG GANSKE, Iowa                    ANNA G. ESHOO, California
CHARLIE NORWOOD, Georgia             BART STUPAK, Michigan
BARBARA CUBIN, Wyoming               ELIOT L. ENGEL, New York
JOHN SHIMKUS, Illinois               TOM SAWYER, Ohio
HEATHER WILSON, New Mexico           ALBERT R. WYNN, Maryland
JOHN B. SHADEGG, Arizona             GENE GREEN, Texas
CHARLES ``CHIP'' PICKERING,          KAREN McCARTHY, Missouri
Mississippi                          TED STRICKLAND, Ohio
VITO FOSSELLA, New York              DIANA DeGETTE, Colorado
ROY BLUNT, Missouri                  THOMAS M. BARRETT, Wisconsin
TOM DAVIS, Virginia                  BILL LUTHER, Minnesota
ED BRYANT, Tennessee                 LOIS CAPPS, California
ROBERT L. EHRLICH, Jr., Maryland     MICHAEL F. DOYLE, Pennsylvania
STEVE BUYER, Indiana                 CHRISTOPHER JOHN, Louisiana
GEORGE RADANOVICH, California        JANE HARMAN, California
CHARLES F. BASS, New Hampshire
JOSEPH R. PITTS, Pennsylvania
MARY BONO, California
GREG WALDEN, Oregon
LEE TERRY, Nebraska

                  David V. Marventano, Staff Director

                   James D. Barnette, General Counsel

      Reid P.F. Stuntz, Minority Staff Director and Chief Counsel

                                 ______

          Subcommittee on Telecommunications and the Internet

                     FRED UPTON, Michigan, Chairman

MICHAEL BILIRAKIS, Florida           EDWARD J. MARKEY, Massachusetts
JOE BARTON, Texas                    BART GORDON, Tennessee
CLIFF STEARNS, Florida               BOBBY L. RUSH, Illinois
  Vice Chairman                      ANNA G. ESHOO, California
PAUL E. GILLMOR, Ohio                ELIOT L. ENGEL, New York
CHRISTOPHER COX, California          GENE GREEN, Texas
NATHAN DEAL, Georgia                 KAREN McCARTHY, Missouri
STEVE LARGENT, Oklahoma              BILL LUTHER, Minnesota
BARBARA CUBIN, Wyoming               BART STUPAK, Michigan
JOHN SHIMKUS, Illinois               DIANA DeGETTE, Colorado
HEATHER WILSON, New Mexico           JANE HARMAN, California
CHARLES ``CHIP'' PICKERING,          RICK BOUCHER, Virginia
Mississippi                          SHERROD BROWN, Ohio
VITO FOSSELLA, New York              TOM SAWYER, Ohio
TOM DAVIS, Virginia                  JOHN D. DINGELL, Michigan,
ROY BLUNT, Missouri                    (Ex Officio)
ROBERT L. EHRLICH, Jr., Maryland
LEE TERRY, Nebraska
W.J. ``BILLY'' TAUZIN, Louisiana
  (Ex Officio)

                                  (ii)

                            C O N T E N T S

                               __________
                                                                   Page

Testimony of:
    Lowenstein, Douglas, President, Interactive Digital Software 
      Association................................................    25
    McMillon, Doug, Senior Vice President and General Merchandise 
      Manager, Wal-Mart Stores, Inc..............................    38
    Peeler, C. Lee, Associate Director of Advertising Practices, 
      Federal Trade Commission...................................    18
    Rosen, Hilary B., President and Chief Executive Officer, 
      Recording Industry Association of America..................    34
    Valenti, Jack, President and Chief Executive Officer, Motion 
      Picture Association of America.............................    31
    White, Daphne, Executive Director, The Lion and Lamb Project.    41
Material submitted for the record by:
    Video Software Dealers Association, prepared statement of....    75

                                 (iii)

  

 
    AN EXAMINATION OF THE ENTERTAINMENT INDUSTRY'S EFFORTS TO CURB 
                 CHILDREN'S EXPOSURE TO VIOLENT CONTENT

                              ----------                              

                         FRIDAY, JULY 20, 2001

              House of Representatives,    
              Committee on Energy and Commerce,    
                     Subcommittee on Telecommunications    
                                          and the Internet,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 9:30 a.m., in 
room 2123, Rayburn House Office Building, Hon. Fred Upton 
(chairman) presiding.
    Members present: Representatives Upton, Stearns, Largent, 
Cubin, Shimkus, Pickering, Terry, Tauzin (ex officio), Markey, 
McCarthy, Luther, Stupak, Harman, and Sawyer.
    Staff present: Linda Bloss-Baum, majority counsel; Yong 
Choe, legislative clerk; Andrew W. Levin, minority counsel; and 
Brendan Kelsay, minority professional staff member.
    Mr. Upton. Good morning, everyone. We are expecting one 
vote on the floor within the hour, and then the House will be 
adjourned for the week, so we are going to try to move as 
quickly as we can.
    I had a discussion last night with Ranking Member Markey 
and Vice Chairman Stearns with regard to interest by the 
members of the Commerce, Trade and Consumer Protection 
Subcommittee, and agreed to ask for a unanimous request that 
the members of that subcommittee wishing to participate in our 
hearing today, in fact, can, and we will be recognizing members 
based on when the gavel fell. So, you will take note of the 
members that are here. And so I will make that request without 
objection and so rule.
    Good morning. In preparation for today's hearing, I 
listened to a few songs and a recording that was labeled as 
having explicit content, and I have to say it was very 
explicit, especially the sounds of a woman's throat being slit. 
This music is not by some fly by-night artist, it is by a 
recent Grammy award winner. And if you think that this type of 
graphic violence has no effect on our kids, well, think again. 
And if you don't believe me, ask the parents at Columbine or 
ask the parents at Paducah. These are graphic images, and, for 
the parents in this room, they are particularly unpleasant 
ones.
    For every Columbine there are hundreds of acts of school 
violence that go unnoticed and unreported every day. And for 
every kid like Eric Harris and Dylan Klebold, there are 
hundreds of kids that aren't shooting, but that are pushing, 
shoving and insulting each other with greater frequency and 
anger than ever before. So after each incident like Columbine 
or Paducah, we ask ourselves, how did it happen? We go on TV. 
We hold town meetings, we pass laws, and we ask ourselves how 
can we stop this from happening again, while at the same time 
we hope and pray that next time it is not our kid's school, 
daycare center or school bus.
    We have learned from history, whoever tells the story 
defines the culture. Today the average child in America 
witnesses over 200,000 acts of violence by the time that they 
graduate from high school. This breaks down to over 30 acts of 
violence every day. This figure does not even take into 
consideration some of the explicit lyrics from artists that 
they hear repeated over and over again.
    If you think I am being overly dramatic, consider this: 
There are plenty of reports dating back to 1955 that have 
demonstrated a direct correlation between violent media and 
aggressive behavior in children. One key study, in fact, 
demonstrates that a group of 22 young folks, those who watched 
more TV by age 8 were more likely by age 30 to have committed 
more serious crimes, be aggressive drinkers and punish children 
more harshly than others. Further, a study released this past 
April noted that violent video game players are more likely to 
argue with teachers and get into physical fights than their 
peers.
    So if indeed these figures are true, and mass media is 
telling the stories, what kind of culture have they defined? 
Today's hearing is not about the First Amendment, pointing 
fingers, assessing blame or condemning the entertainment 
industry. It is instead about corporate responsibility and the 
stewardship of public trust. As a parent of two small kids, I 
know that child-rearing starts in the home and believe that 
parents cannot shirk their responsibility to police their kids' 
activities to limit their exposure to violence.
    But I say to our panel today that we cannot do it alone. 
Yes, the First Amendment is a right, but with it comes a 
weighty responsibility, so to a large degree we must rely on 
you, the leaders of the entertainment industry, to do the right 
thing by not marketing violent material to our kids.
    So today we are here to do what parents on their own do not 
have the collective power to do: demand that the entertainment 
industry tell us what they have done, what they are going to 
continue to do to prevent the marketing of violent material to 
kids.
    Let me say first and foremost that I am deeply troubled by 
the FTC's conclusion in its April 2001 follow-up report to 
Congress that states the music recording industry has not taken 
any visible steps with respect to explicit-content-labeled 
music. Ms. Rosen, several months have gone by, and I am hopeful 
that you will have some good news to report today on its effect 
in that regard. I would hate to think that the music recording 
industry is out of tune with the rest of the entertainment 
industry. We don't need lip-syncing or lip service. We really 
do want bold, real and concrete steps.
    Also I want to commend Wal-Mart for its good corporate 
citizenship. As the second largest retailer of music in the 
Nation, Wal-Mart has chosen to sell only that music whose 
explicit lyrics have been edited out. Wal-Mart is using its 
market power to make a difference and should be applauded for 
its voluntary efforts.
    The bottom line is this: We all need to work together for 
parents and children of our country. I assure you that until we 
successfully snuff the marketing of violent material to kids, 
this Congress and our constituents will not rest.
    [The prepared statement of Hon. Fred Upton follows:]

   Prepared Statement of Hon. Fred Upton, Chairman, Subcommittee on 
                  Telecommunications and the Internet

    Good morning.
    In preparation for today's hearing, I listened to a few songs on a 
recoding that was labeled as having explicit content. And, I have to 
say, it was explicit--especially the sounds of a woman's throat being 
slit.
    This music is not by some fly-by-night artist--it's by a recent 
Grammy award winner. If you think that this type of graphic violence 
has no effect on our kids, think again. And if you don't believe me, 
ask the parents at Columbine. Ask the parents at Peducah.
    These are graphic images. And for those parents in the room--they 
are especially unpleasant ones. For every Columbine, there are hundreds 
of acts of school violence that go unnoticed, and unreported each day. 
And, for every kid like Eric Harris and Dylan Klebold there are 
hundreds of kids that aren't shooting. But they are pushing, shoving, 
insulting each other with greater frequency and anger than ever before.
    So, after each incident like Columbine, or Peducah, we ask 
ourselves how it happened. We go on television. We hold town hall 
meetings. We pass laws. And we ask ourselves ``how can we stop this 
from happening again,'' while at the same time we hope and pray that, 
next time, it's not our child's school, daycare center, or school bus.
    We've learned from history whoever tells the stories define the 
culture.
    Today the average child in America witnesses over 200,000 acts of 
violence by the time they graduate from high school. This breaks down 
to over 30 acts of violence per day. This figure does not even take 
into consideration some of the explicit lyrics from artists they hear 
repeated over and over again.
    If you think I'm being overly dramatic, consider this: There are 
plenty of reports dating back to 1955 have demonstrated a direct 
correlation between violent media and aggressive behavior in children. 
One key study, in fact, demonstrates that of a group of 22 young 
people, those who watched more television by age eight were more likely 
by age 30 to have committed more serious crimes, be aggressive 
drinkers, and punish children more harshly than others. Further, a 
study released this past April noted that, ``Violent video game players 
are more likely to argue with teachers and get into physical fights,'' 
than their peers.
    So, if indeed these figures are true, and mass media is telling the 
stories, what kind of culture have they defined?
    Today's hearing is not about the First Amendment, pointing fingers, 
assessing blame, or condemning the entertainment industry. But it is 
about corporate responsibility and the stewardship of the public trust.
    As a parent, of two small children, I know that childrearing starts 
in the home, and believe parents cannot shirk their responsibility to 
police their children's activities to limit their exposure to violence.
    But I say to the panel today--we can't do it alone.
    Yes, the First Amendment is a right--but with it comes a weighty 
responsibility. So, to a large degree, we must rely on you, the leaders 
of the entertainment industry, to do the right thing by not marketing 
violent material to children.
    So, today, we are here to do what parents, on their own, do not 
have the collective power to do,--demand that the entertainment 
industry tell us what they have done, and what they are going to 
continue to do, to prevent the marketing of violent material to 
children.
    Let me say, first and foremost, that I am deeply troubled by the 
FTC's conclusion in its April 2001 follow-up Report to Congress that 
states ``the music recording industry has not taken any visible steps 
with respect to explicit-content labeled music.''
    Ms. Rosen, several months have gone by and am hopeful that you will 
have some good news to report today on its efforts in this regard. I 
would hate to think that the music recording industry is out of tune 
with the rest of the entertainment industry.
    We don't need lip-syncing or lip service--we want real, bold and 
concrete steps.
    Also, I want to commend Walmart for its good corporate citizenship. 
As the second largest retailer of music in the nation, Walmart has 
chosen to sell only that music whose explicit lyrics have been edited 
out. Walmart is using its market power to make a difference and should 
be applauded for its voluntary efforts.
    The bottom line is this: We all need to work together for parents 
and children of this nation.
    I assure you, until we successfully snuff out the marketing of 
violent material to children, the Congress, and our constituents will 
not rest.

    Mr. Upton. I yield to my friend and colleague, ranking 
member of the subcommittee, Mr. Markey.
    Mr. Markey. Thank you, Mr. Chairman, very much, and I want 
to commend you for holding this hearing today. It is an 
important subject that millions of American families really 
care a lot about, and I believe that it is quite timely for us 
to check with the industry, with the Federal Trade Commission 
to ascertain the amount of progress that has been made in the 
wake of the Federal Trade Commission reports on this issue.
    Parents have a right to know whether certain media products 
out on the market today contain material that is inappropriate 
for viewing by their children. This is true whether the item is 
a video game, a CD or a movie. Parents have rights. There is 
ample evidence in numerous studies of the exposure to media 
violence on children and a resulting desensitization to 
violence and acceptance of violent behavior. Both for this 
reason and to respond to parents' concerns, the video game 
reporting and movie industries have put in place voluntary 
ratings and parental advisories on their entertainment 
products. These warnings advise parents of content that may 
contain explicit violence, language, drug use or sex.
    Now, last September the Federal Trade Commission issued a 
report that found that many companies in the entertainment 
industry were marketing products to minors that were otherwise 
rated inappropriate for minors, or which recommended parental 
permission for use or purchase by minors. At the time the 
Federal Trade Commission called upon the three entertainment 
industries studied to adopt voluntary policies prohibiting 
these marketing practices and to vigorously enforce their own 
self-regulatory policies.
    After the Federal Trade Commission report, I wrote to then 
FTC Chairman Pitofsky to ascertain the current authority of the 
Federal Trade Commission to take action with respect to 
marketing violent products to kids under its power to police 
unfair and deceptive business practices. Chairman Pitofsky 
responded that, in his opinion, the Federal Trade Commission 
may have limited ability to take legal action in tough 
borderline cases.
    I am eager to hear what new FTC Chairman Muris' view is on 
this legal interpretation. In addition, I am also eager to 
ascertain what the Federal Trade Commission intends to do when 
the matter is not a borderline tough call, but a flagrant 
marketing of violence to children. What are we going to do in 
the obvious cases? Some in the industry were going so far as to 
round up 11-year-old kids for focus groups in the mall to 
figure out how to better market R-rated products to the child 
audience. So is that really a difficult case?
    In April of this year, the Federal Trade Commission 
followed up on their previous report, and this hearing provides 
the subcommittee the opportunity to better understand the 
Federal Trade Commission's more recent finding, as well as 
review progress across various industries. Again, I want to 
commend Chairman Upton for calling this hearing, and I look 
forward to hearing from our witnesses.
    Mr. Stearns [presiding]. I thank the gentleman.
    The distinguished chairman of the full committee, the 
gentleman from Louisiana, Mr. Tauzin.
    Chairman Tauzin. I thank the chairman.
    First of all, let me make a statement that should precede 
any one of these hearings, and that is that this committee in 
particular, of all the committees in Congress, is charged with 
an obligation under the Constitution to protect First Amendment 
free speech of our citizens. We start from that proposition. 
That is why this committee, when it looked at the question of 
ratings on movies, instead of sponsoring and pushing 
legislation from Congress to regulate the material that motion 
pictures present to us on the screens of cable and television, 
instead took the hearing to Peoria, invited the industry to 
come and meet with citizens and to discuss with them a 
voluntary system. Out of it was born the new rating system for 
motion pictures.
    And I want to commend the industry for not only adopting 
that rating system, following those citizen meetings with this 
committee, but, more importantly, for following up with even 
more information than the rating systems provided, and not just 
saying why a motion picture is rated R--that it is rated R, but 
why it is rated R, giving consumers more information about why 
the motion picture industry rated a particular movie a certain 
way, why it said that children under 17, for example, should 
have a parent available with them when they watch a certain 
movie.
    Second, I want to commend the video game industry. I 
particularly appreciate the efforts of the industry 6 years ago 
to institute the Entertainment Software Rating Board for a 
relatively new industry, recognizing that there were great 
consumer concerns about the violent content of many video 
games. The industry not only went into the business of advising 
parents about the character of some of these games, but also 
instituted a system helping Americans understand why a 
particular game was rated the way it was. I think those have 
been very important and significant advances that have helped 
parents make decisions about the entertainment choices of their 
children, and I thank you for that.
    And the recording industry has likewise instituted a 
program to at least advise parents that recording products may 
contain explicit material, but the question today, of course, 
following the report of the FTC is is that enough when it comes 
to recordings? And we ought to think about that today. And the 
question is, should the recording industry, excuse the pun, get 
in sync with your industry counterparts when it comes to giving 
parents a little more information about why a particular 
recording has been rated explicit material.
    We know that 15 of Billboard's current top 50 albums, that 
is 30 percent of the most popular albums, now contain that 
parental warning. That is an awful high percentage. Maybe 
parents ought to know a little more about why a particular 
recording received that label.
    First of all, let me concede that an explicit video scene 
in a movie or a video game is different than a song and the 
words which can be interpreted many different ways. But as the 
chairman of the committee pointed out in his statement, when 
technological improvements allow a song to include simulated 
real-life sounds like the slitting of a human throat while the 
voiceover sings out, bleed, bleed, bleed, there is no more room 
for interpretation. That is pretty violent stuff.
    I want to tell you a quick story to give you the edges of 
this debate. I am watching the animated movie Popeye with my 
young son, who is now a young man, but he was then a very young 
child. In the animated movie Bluto punches out all the windows 
in a rage, and then goes on his way, and my young son jumped 
off my lap without my being able to catch him, and he ran out 
to the glass storm window and the door in the front of the 
house and punched his way through it. The scene obviously 
translated into something in his mind that made him think he 
could do just like Bluto and punch the glass door. And the 
glass obviously didn't react like video glass, cartoon glass. 
It came down and cut his arm and cut an artery, and he was 
bleeding profusely. I remember taking him to the hospital and 
the doctor said, the boy will do fine; I think we have to 
hospitalize the dad. He looks in terrible shape. It was a 
horrible experience for me, and not just for my son.
    Obviously, we can't censor cartoons, and we certainly don't 
want to be in the business of government supervision of whether 
or not Bluto is violent or not violent in a Popeye cartoon. 
That is the far edges of that stuff. But on the other hand, we 
need to recognize that children respond, they react, as the 
chairman said, to what they see and hear and what they feel, 
and when we give them an overabundance of this stuff, without 
helping parents who want to make sure their kids are not 
exposed to too much of it, too violent a performance, or too 
violent a scene, or too violent a video, you know, we are maybe 
not doing our job properly.
    And to all of you who are working with us, let me thank 
you, and I think you all are. And this meeting is obviously a 
chance for us literally to publicly measure the progress you 
are making in the private sector to help parents with this 
thorny kind of issue. How do we help our parents of America 
know what it is their children are watching and seeing and 
playing with as they entertain themselves growing up? And so I 
want to thank you for the progress you are making. I want to 
encourage you to continue that progress. I particularly want to 
encourage the recording industry to think seriously about maybe 
if we could improve on the explicit warning ratings and, as the 
FTC has pointed out, continue in the private sector doing what 
we in government are very loathe to do, and that is to get into 
the business of regulating the content of material in a free 
speech society.
    I thank you very much, Mr. Chairman.
    [The prepared statement of Hon. W.J. ``Billy'' Tauzin 
follows:]

 Prepared Statement of Hon. W.J. ``Billy'' Tauzin, Chairman, Committee 
                         on Energy and Commerce

    Mr. Chairman, thank you for holding this important hearing today. 
The subject of violence in the media is one that many parents often 
raise with members when we are home in our districts. They are rightly 
concerned about the effects that prolific violence in the media may 
have on their children, and generally are eager to limit their kids' 
exposure to it as much as possible.
    But parents need help in the 21st century to understand what 
exactly is contained in the movies their kids watch, the music they 
listen to, and the video games they play. Gone are the days when there 
was one family phonograph player in the living room. Today kids listen 
to music over personal headsets that do not allow parents to monitor 
what is going directly into their children's ears and heads.
    I commend the efforts taken by the motion picture industry and the 
video games industry to give parents additional information and 
guidelines to better understand what is contained within a particular 
video game or movie. I particularly appreciate the efforts of the video 
game industry that six years ago took the initiative to institute an 
Entertainment Software Rating Board for its relatively new industry 
that many parents knew little about. This board provides a rating to 
each video game based on age appropriateness as well clear information 
about the content that influenced that rating, such as violence, strong 
language or suggestive themes. I encourage the video game industry to 
continue to educate consumers about these ratings to retailers and 
consumers who may not yet be familiar with the relatively new system.
    The motion picture industry has made great efforts to supplement 
their traditional system . . . the one most folks have relied upon for 
decades . . . with descriptions about why R rated movies may be 
inappropriate for children under 17 not accompanied by a parent. 
Similarly, the video game industry has developed its own new age based 
system that also describes why a particular game may earn a M: for 
mature rating.
    As for the recording industry--I call upon you to get ``in sync'' 
with your industry counterparts to help educate consumers about the 
material that your members themselves deem to be ``explicit.'' I hope 
that you will recognize opportunities to improve your industry efforts 
to help parents better understand your products. I would like you to 
seriously readdress whether or not the current one size fits all 
labeling system for music could be expanded to provide additional 
information about the content consumers can expect to hear. When 15 of 
Billboard's current top 50 albums--that's 30 percent of the most 
popular albums today--receive parental advisory warnings, I believe the 
industry has a responsibility to let consumers know why.
    I do agree with the RIAA that the informational systems regarding 
content should be tailored to the specific medium that they rate. 
Unlike an explicit video scene in a movie or video game, a single song 
can mean many different things to many different people. However, as 
technological advances allow artists to include simulated real life 
sounds, such as mutilating another human being, into their work, there 
is less room for individual interpretation of a musical piece. Yes--
Lyrics alone are indeed susceptible to varying interpretations, 
however, the sound of slicing a human being's throat while shouting the 
word ``bleed,'' arguably leaves less to the imagination.
    This Committee is well aware of the First Amendment implications of 
government regulation of artistic material. But there is legislation 
currently before the Energy and Commerce Committee that would enable 
the government to enforce policies against marketing and selling this 
material to minors, and we need to think about it very carefully. I 
hope that we can use this opportunity today to learn more about what 
industry is doing on their own to address this problem to avoid the 
need for Congress to step in and take action.
    Finally, I want to apologize to all the Members of the Committee 
for the inconvenience regarding late testimony. The last time I 
reviewed the Committee instructions that are sent out to witnesses, 
they seemed to clearly lay out the directions for when and how to 
submit testimony. These rules exist in order to allow staff and Members 
time to review testimony in advance and have the most productive 
hearing possible. I hope that in the future all witnesses will respect 
this Committee process.
    Once again, thank you, Mr. Chairman, for holding this important 
hearing, and I look forward to asking our witnesses some questions.

    Mr. Upton. Thank you, Mr. Chairman.
    I recognize my good friend and colleague from the great 
State of Michigan Mr. Stupak.
    Mr. Stupak. Thank you, Mr. Chairman, for holding this 
hearing on a subject that greatly concerns me. As a father, a 
legislator and as a member of this subcommittee, I take 
seriously my and our responsibility to ensure that the 
entertainment industry acts to protect children from violent 
and inappropriate content. Unfortunately, we are here today 
because the entertainment industry needs to do more.
    As the witnesses will testify today, these industries are 
not subject to any regulations currently on how they advertise 
or rate their video or audio content. We ask them to regulate 
themselves in part out of our First Amendment considerations. 
But the First Amendment does not offer carte blanche to 
businesses to ignore their responsibilities to consumers, 
parents and to children, and the government has somewhat 
greater latitude in regulating in the area of commercial 
speech.
    My colleague Zach Wamp and I have introduced the 21st 
Century Media Responsibility Act of 2001 to require a 
standardized identical product labeling system for interactive 
video games, video programs, motion pictures and music. This 
uniform and consistent labeling system will be a valuable tool 
to parents and consumers who want more information about the 
games their children play, the music they listen to and the 
movies and television shows they watch. I think we need to 
shift the burden of proof. Why should parents have to muddle 
through an assortment of different ratings systems for each 
entertainment medium? Violence is violence. It is no different 
to see a violent image in a video game than on a movie screen. 
There is no reason why the same identical label cannot apply to 
each.
    Our legislation asks the industries to work together to 
develop a standardized product labeling and advertising system 
to inform consumers of the nature, context and intensity of 
violent content, and the age appropriateness of their products. 
Subsequently, the bill requires this system to be examined and 
approved by the FTC. Our bill bans the domestic sale or the 
commercial distribution of unlabeled products after 1 year. 
Further, retailers are required to enforce the age restrictions 
on the products.
    I commend those in the entertainment industry that have 
taken steps to modify their advertising and labeling. While the 
FTC has noted definite progress, I believe we need to do more. 
While we wait for the industry to act, another child is exposed 
to explicitly violent lyrics or images, and another and 
another. I agree with the industry that we cannot prevent every 
such exposure, but the time has come to take some serious 
action. I believe that our legislation is necessary in order to 
hasten the process and to create a uniform, identical, 
consistent labeling system so every parent and every consumer 
can easily identify the product's content.
    Thank you, Mr. Chairman, for holding this hearing, and I 
look forward to hearing from our witnesses today.
    Mr. Upton. Thank you.
    Mr. Terry.
    Mr. Terry. Thank you, Mr. Chairman. I appreciate you 
holding this hearing today and allowing me to go out of order 
since I am addressing 120 Boy Scouts who are in town at the 
Jamboree in the next 10 minutes.
    This is an important issue. Several of us have already 
stated our roles as fathers. I have three small children, and 
we, of course, keep a close eye and watch when we buy a Play 
Station game or a video for the warning labels on there, and we 
pay close attention to those. But we are here today to 
specifically look at the music industry and the evolution of 
the ``explicicity'' of the lyrics, both sexually, the language, 
violence.
    That is a small part of what I think is really in the big 
picture of, you know, the changes in our society and our 
culture today that seem to be either ambivalent or accepting of 
those. I mean, here we are--it is interesting when you think 
back when I was a child and people were upset with the Rolling 
Stones song talking about Let's Spend the Night Together, or 
counterculture was measured by parting your hair on the right 
or the left if you reference The Who song there. And today it 
just seems like counterculture builds up on the previous 
generation. Madonna seems tame and lame in today's world of 
Eminem.
    So we have gone from criticizing in a society that is 
concerned about a Stones song saying Let's Spend the Night 
Together to the Grammys awarding perhaps an artist with the 
most explicit violent lyrics in today's market. And what is 
concerning to me as a parent is you listen to some of these 
songs on the radio, and you think, God, these are terrible, but 
they are not bad. You know, okay, I can at least understand why 
it is allowed. And then you listen to the CD version, and it is 
a lot different and a lot more graphic. So as a parent, you sit 
here and think--you listen to a song on the radio and think it 
is close. I am not real comfortable with it from what I heard 
on the radio, but I--you know, I will let this one pass.
    It is just unfortunate now that we have a society or a 
music industry that allows--lulls parents into sleep, giving 
one version for radio play and an entirely different version 
for a CD version, the record version. And then you--as a 
parent, as I stated, we look for the warning labels on the 
games that we buy, the videos, computer games, and I appreciate 
the level of the ratings, so I understand they are age-
appropriate. I understand that if there is a language issue or 
a violence issue, we particularly want to steer our children 
away from violence in video games and the type of things we do. 
I don't have that option as a parent.
    Now, fortunately my children are pretty young. We are still 
into some pretty early type of music. We are still with 
Vegetales and things like that. We are just getting into All 
Star, those type of songs, with my oldest who is seven. But I 
really want, as a parent, the ability, since society has 
changed and we are no longer outraged as a society with songs 
that--with explicit lyrics, me as an individual parent, I am, 
and I want the power to decide and be involved in what products 
my children are listening to and what products they are 
purchasing. So we are here today to have a great discussion on 
this important issue.
    I yield back my time.
    Mr. Upton. The gentleman's time has expired.
    The gentlelady Ms. McCarthy.
    Ms. McCarthy. Thank you, Mr. Chairman, and I commend you 
for holding this hearing, and I thank the witnesses who have 
taken time to come and share their thoughts with us today.
    Mr. Chairman, I very much appreciate the pocket guide 
entertainment ratings that were provided to us, and I am glad 
we have them as we have this discussion today.
    And I need to fully disclose that I am a recipient of the 
highest honors that the American Civil Liberties Union can 
bestow on anyone, because, Mr. Chairman, I stood up for the 
rights of you to express yourself in the manner that you so 
chose to say the things you want to say, to pray the prayers 
you want to pray, to really truly have the freedoms that this 
Bill of Rights and great country affords us. And so I guess, 
though, I can't let you yell ``Fire'' in one of Jack Valenti's 
theaters.
    But other than that I think that this great country really 
has so much to offer, and while you were listening to Eminem, 
and perhaps you were upset by some of the lyrics, the messages 
in his songs about being angry when your wife cheats on you 
and, you know, betrayed by someone you trust, and being upset 
with authority figures who keep you from doing the things you 
want to do, I think those are kind of classic themes in other 
literary forms and over the years have been expressed by other 
controversial people, whether it was Shakespeare or the 
Beatles, as has been referenced or other artists.
    But I really do think that the industry has gone a long way 
toward addressing the concerns we have raised in the past. This 
is one way, and labeling their product for parents is certainly 
another. So I would hope that this hearing is all about whether 
or not there is anything we can do collaboratively to continue 
to improve the process of sharing information, but I certainly 
hope it won't go in the direction of trying to abrogate those 
rights provided by our Bill of Rights and our Constitution and 
doing anything to minimize the beauty of the freedom of 
expression that we have in this country that others all over 
the world admire.
    So I look forward to the testimony, and I will put my 
formal remarks in the record, and I thank you for this hearing.
    [The prepared statement of Hon. Karen McCarthy follows:]

Prepared Statement of Hon. Karen McCarthy, a Representative in Congress 
                       from the State of Missouri

    Thank you Mr. Chairman for holding this important hearing on the 
entertainment industry's efforts to curb children's exposure to violent 
content. I look forward to the testimony of the witnesses on this 
issue, and the dialogue that will follow.
    In September 2000, the Federal Trade Commission (FTC) issued a 
report that found that entertainment companies were intentionally 
marketing violent, adult-oriented products to children. In response to 
the report and public pressure, the motion picture and video game 
industries have made a good-faith effort to improve their marketing 
practices. The FTC cited this improvement in its April 2001 follow-up 
report.
    I have a long-standing interest in the music industry, particularly 
with respect to recording artists. My district in Kansas City is the 
one of the major jazz and blues hubs and home to legendary recording 
artists. Throughout my career I have worked to strengthen their rights 
and preserve their creative freedom. I am concerned about the First 
Amendment implications of labeling content that may be offensive to 
some, but is not considered obscene under legal doctrine. The 
industry's explicit lyric warning system is a voluntary one. Artists 
and record companies are not legally obligated to label their content.
    I am interested in hearing the witnesses' opinions on how to strike 
a reasonable balance between the freedom of artistic expression and 
providing parents with the tools they need to determine if movies, 
video games, and music contain explicit images or lyrics they do not 
want their children exposed to.
    I am pleased that the entertainment industry has taken steps to 
improve its marketing practices, and I encourage them to continue to do 
so.
    It would be unreasonable for us to be the content police for all 
entertainment products on the market, but it is fully reasonable to 
establish some boundaries where both free expression and children's 
best interests coexist. Through collaborative efforts, a consensus can 
be developed which makes progress on this issue. In the end, however, 
it is the responsibility of parents, not the government, to determine 
what entertainment is appropriate for their kids.
    Thank you Mr. Chairman. I yield back the balance of my time.

    Mr. Upton. Thank you.
    Mr. Stearns.
    Mr. Stearns. Thank you, Mr. Chairman. I know that both you 
and I have a personal interest, and I look forward to working 
with you on this so parents are given the necessary tools to 
ensure their children are protected from harmful and violent 
entertainment.
    While the primary responsibility of policing what children 
are exposed to ultimately rests with parents, industry to a 
certain extent shares responsibility for making parents' 
already difficult job even more difficult. My colleagues--the 
Federal Trade Commission September 2000 Report on Marketing 
Violent Entertainment to Children concludes, ``individual 
companies in each industry routinely market to children the 
very products that have the industries' own parental warnings 
or ratings with age restrictions due to their violent content, 
end quote. The report also exposed, quote, extensive marketing 
and in many cases explicit targeting of violent R-rated films 
to children under the age of 17 and violent PG-13 films to 
children under 13.''
    In a follow-up report earlier this year, the FTC found that 
the movie and electronic games industry had made some progress 
on both fronts, but that the music recording industry had made 
no visible response to the September report. The Commission 
found that the music industry, recording industry, unlike the 
movie and electronic games industry, had not implemented the 
reforms its trade association announced just before the 
Commission issued its report. Regrettably, the Commission also 
concluded that advertising for explicit-content-labeled music 
recordings routinely appeared on popular teen television 
programs. As many know, while some of these albums have lyrics 
promoting misogyny, police hating and other types of plain 
hate, the lyrics which, of course, in this particular example 
by Eminem, Kill You, that we can't even put into the record or 
we can't even quote today, adults have a right and choice to 
listen to these products. However, it is a result of these same 
products not only falling into the hands of children, but as it 
now appears from the report, they are being marketed toward 
children.
    There is a huge outcry, of course, from this committee and 
the committee that I chair. So like all of us, we are a 
proponent of small government, but when this industry fails to 
institute a meaningful and self-regulatory program, I think the 
parents and members of the community believe government has an 
obligation to do something, to intervene.
    Similar legislation that does this has been referred to the 
subcommittee I chair, which is called Commerce, Trade and 
Consumer Protection Subcommittee, and it declares that targeted 
marketing to minors of an adult-rated motion picture, music 
recording or electronic game shall be treated as a deceptive 
act or practice within the meaning of the Federal Trade 
Commission Act and considered unlawful unless the producer or 
distributor responsible for advertising or marketing adheres to 
a voluntary self-regulatory system that comports with criteria 
established by the FTC.
    Mr. Chairman, though legislation at this time might not be 
the right answer, I can tell you what the simple and obvious 
answer is: the meaningful and wide practice of self-regulation 
by industry of not marketing harmful material to children. That 
seems pretty simple. However, I think you and I agree we will 
not stand idly by as our children are reduced to nothing more 
than dollar signs and profit margins. Mr. Chairman, as chairman 
of the Commerce, Trade and Consumer Protection Subcommittee, I 
intend to work with our ranking members, Mr. Towns and 
yourself, to find a solution that is both reasonable and well-
balanced. And thank you, Mr. Chair.
    Mr. Upton. Thank you.
    Mr. Sawyer.
    Mr. Sawyer. Thank you, Mr. Chairman, for having these 
hearings, and I want to thank the members who are here this 
morning and our witnesses for taking part.
    I think it is important to remember where the report that 
brings us together today came from. It was requested by the 
previous President in the wake of the Columbine shootings and 
reflects a problem that is enormously complex. I don't want to 
minimize the importance of what we are talking about here 
today, I think it is important, but it is important not to 
forget the other contributing factors in terms of what happens 
with youth violence, and it is also important to understand 
that sometimes we don't measure youth violence in ways that 
make sense. Too often the crime statistics in this country 
reflect the entire spectrum of crime and do not get at the core 
cause. They don't even get at the core measurement of where 
crime occurs. And let me give you an example.
    For the last decade we have seen every mayor in the United 
States talk about the reduction overall in violent crimes in 
their cities. The truth of the matter is that most violent 
crime in America occurs--in fact, it is probably around the 
world--occurs between the ages of 18 and 35 among men. For the 
last decade that population as a component of the entire 
population of the United States has been the smallest that it 
has been in modern times. Today the largest population 
component in our Nation's history, those who are enrolled in 
school right now, is the largest in our Nation's history. It is 
larger than it was at the point that the baby boom was in 
school. And as that moves into that violent crime age range, we 
will see violent crime grow all across the United States.
    It is not solely a matter of the entertainment that our 
children are seeing today. That may be a contributing factor, 
but I suspect strongly that it is far more a matter of 
hormones, normal maturation, behavior that has, for millennia, 
occurred in that age range. It is no accident that it is that 
age of young men that we ask to go to war.
    I just hope we can keep in mind as we think about the 
subject that we are talking about today and its obvious 
importance, Mr. Chairman, something very fundamental, and that 
is the complexity of cause as we look at phenomena that touch 
our entire society.
    Thank you, Mr. Chairman. I yield back the remainder of my 
time.
    Mr. Upton. Thank you.
    Mrs. Cubin.
    Mrs. Cubin. Thank you.
    Mr. Chairman, I do have a written statement. I won't repeat 
the statements that the other members have already said, so I 
would just make one observation so we can get on to the panel, 
and that I will be referring to the CD that--by Eminem that was 
a Grammy-winning CD. And in my mind, the industry, or the 
organization, or the other entertainers rewarding an 
entertainer that sings a song or chants or raps, and it is a 
very appealing beat, it is sort of like a tribal beat, it does 
draw you in, it is appealing, but then when you hear the words 
``raping your mother, killing your mother,'' I think the 
industry should be embarrassed that a song like that would be 
an award-winning piece of entertainment. And I also think that 
when a song or a video game or any other award-winning piece of 
entertainment is like that, then it encourages other 
entertainers to do the exact same thing.
    I don't in any way want to stop free speech. I am one of 
the stronger proponents of free speech in this Congress. But we 
know that this problem is multifaceted, violence in our 
country, and we know that there are more moms that work, which 
leaves less time for families to be together and teach their 
children the responsibilities that they have. We know they have 
more privileges with fewer responsibilities, and that never 
works when you are raising a young person.
    Some people think guns are the problem. You take guns out 
of society, and we don't have the problem anymore. None of that 
is true. It is a combination of all of those things, teaching 
responsibility and the examples that we set.
    So I plead with the industry, don't award songs about 
suicide and songs about rape and the disgusting things I heard 
this morning. Don't make those award-winning pieces of 
entertainment.
    I yield back.
    [The prepared statement of Hon. Barbara Cubin follows:]

Prepared Statement of Hon. Barbara Cubin, a Representative in Congress 
                       from the State of Wyoming

    Thank you, Mr. Chairman.
    I have continuously been disappointed in the behavior of the 
entertainment industry when it comes to producing violent content and 
then marketing those products to under aged children.
    As a mother, I understand the difficulty of raising children. My 
children, though, were never subjected to the type and magnitude of 
violence so prevalent in today's entertainment industry.
    When my children visited the local video arcade I didn't think much 
of them playing games like Contra, Mike Tyson's Punch Out, or Street 
Fighter.
    Violent as those games were for their time, they look like Disney 
films compared to today's violence-oriented video games. Granted, the 
percentage of violent, mature-content video games is small compared to 
the overall number of games available.
    My point, however, is that although the number of violent games may 
be a small percentage, the content--the level and degree of violence--
has gotten so poisonous that it influences and affects the children who 
play them much more than games 10 or 15 years ago.
    The realism of games like Diablo II, Quake and Doom really have 
dramatic affects on young adults not to mention the children that may 
come in contact with them.
    PC Gamer magazine called Quake, ``. . . the biggest, baddest, 
bloodiest 3-D action game ever conceived.'' And USA Today called Quake, 
``Bloody Amazing.''
    Set a child in front of one of these games for an hour or two and 
look into their eyes afterward. It is almost as if you can see their 
disconnection from reality.
    It's obvious why. Graphic pools of blood and severed body parts are 
pervasive in these games and have a chilling influence on developing 
minds.
    I commend video game manufacturers that are making real strides in 
producing a greater number of truly entertaining and educational 
children's video games.
    For those video game manufacturers that continue to find the need 
to produce and sell violent games, I call on them to continue efforts 
to target these games to the appropriate audience in appropriate 
markets.
    I also call on retailers to continue their efforts to stop the 
problem at the cash register. Programs that call for carding young 
adults and children will help prevent--not stop, but prevent--these 
games from falling into the wrong hands.
    As a parent--and maybe someday as a grandparent--I worry about 
what's down the road for our children in this regard.
    Sex, violence and lewdness in movies, video games, and music lyrics 
are pushing the envelope when it comes to decency--instead of ascending 
new heights of entertainment content we seem to be continuing a spiral 
down to new depths.
    I wish there was no market for this type of entertainment--and I 
pray that someday there won't be.
    Since there is, though, I expect the music industry, the movie 
industry, and the video game industry will continue to provide what 
their audiences are demanding.
    The industry--because they will continue to produce this trash--
must make life easier for parents in providing information and 
education to help determine what is right and appropriate for our 
children.
    Rating systems are beneficial but they must be objective and err on 
the side of our children and not your industry.
    Mr. Chairman, I commend you for holding this important hearing. I 
hope we all feel better about the direction the entertainment industry 
is going after the hearing. I yield back my time.

    Mr. Upton. Thank you.
    Ms. Harman.
    Ms. Harman. Thank you, Mr. Chairman.
    I have some very good friends on this hearing panel, and I 
would point out to our committee that they are parents, too, 
and no doubt they wish, as I do, that there was some magic pill 
we could give our kids at infancy that would direct them to 
have good values at all times and to make good judgments for 
themselves. Well, we haven't invented that pill yet. In fact, 
we haven't invented pills to curb very serious diseases, and I 
guess I might consider this one of those diseases.
    We have invented something else, though. It is called 
parents. And I think that the primary responsibility for 
teaching values to our kids, for making judgments about the 
music, the films, the games our kids listen to and watch and 
play is with us, the parents. It is hard to do it.
    I would point out to this panel, and maybe others have 
before me, that my first encounter with Eminem lyrics was in my 
car when one of my kids put the CD on the car stereo. It was 
horrifying. And that, of course, led to a conversation with my 
kids about what they listen to, and then a very hard decision 
which my husband and I had to make about whether one of them 
could attend an Eminem concert. Probably you have been through 
this, too, and the answer is not always no, because if the 
answer is no, that may make the stuff you are trying to teach 
them about more attractive rather than less attractive.
    At any rate, there isn't a magic pill, and there isn't a 
magic parent, but there is one answer that is wrong here, and 
that answer is to legislate Federal censorship. And I think 
that the bill that Senator Lieberman has introduced on the 
Senate side, as I have said before, is, notwithstanding his 
good intentions, a dangerous bill, and it will lead to Federal 
censorship. And frankly, I want to be a better parent, but I 
know that as the parent I am--I am better equipped to make the 
judgment about my kids than is the Federal Government.
    I look forward to the testimony this morning.
    Mr. Stearns [presiding]. I thank the gentlelady.
    Mr. Shimkus, the gentleman from Illinois.
    Mr. Shimkus. Thank you, Mr. Chairman.
    I want to thank our panelists, and the FTC and our 
colleagues for being here today.
    I want to welcome Lorna Williams back to Rayburn 2123, my 
former staffer. She is somewhere in the back there. I asked her 
about her baby pictures. We spent a lot of time in this room 
together, and welcome back. It is great to see you.
    This is--everybody has mentioned the importance of this 
issue. I want to use it to bring my colleagues' attention to a 
legislation that Ed Markey and I dropped a couple of weeks ago: 
Dot Kids. It is an attempt to have a safe location, like a 
section in a library--you know how they have a kids' section in 
libraries that has helped move kids into a section that is 
safe--and do the best we can to help when there are not parents 
observing what they are doing on the Internet.
    And I would encourage you all to take a look at that, 
especially after we look at this guide here and we go to the 
Internet, games that are available on the Internet and the 
rating system there. Level zero, none or no violence or 
explicit sex, nudity. Level zero is none or sports-related. 
Then you go to level 1, 2, 3 and 4; starting at injury to human 
beings, to level four, rape or wanton, gratuitous violence. I 
would say that level zero could be available on a Dot Kids 
site, and so that is really a benefit. So I want to encourage 
my colleagues to really look at that legislation. We are very 
optimistic.
    The other problem with this in, the Army we always kept an 
acronym, KISS: Keep it simple, stupid. This is not simple. I 
mean, it really isn't, and I think the industry would agree. 
For every area, whether it be the Internet or movies or TV, we 
have a different guide, and it is not simple. And I think my 
colleague Mr. Stupak mentioned it should be. And we ought to 
help in ways that we can help educate and work with parents, 
and I don't think that is too much to ask.
    We look forward to this hearing. It is always a tough issue 
when you talk about free speech and constitutional rights, but 
there is a role for assistance in at least identifying harmful, 
dangerous material.
    Again, my last plug, Dot Kids. It is H.R. 2417. Write it 
down. Look it up. We want a cosponsorship. And with that, I 
yield back my time.
    Mr. Stearns. I thank the gentleman.
    The gentleman from Oklahoma Mr. Largent is recognized for 
an opening statement.
    Mr. Largent. Thank you, Mr. Chairman.
    I come to this hearing, not only as a Member of Congress 
from Oklahoma, but as a parent of four children, four 
teenagers. And I guess I am not really a neutral panelist here. 
I have an opinion borne out through experience of my own 
children to say to the entertainment industry that whatever you 
are doing, it is not enough. It is just not enough. Whatever 
warning labels you are putting on, whatever effort you are 
doing to self-police, it is not enough. It is clearly not 
enough.
    I am reminded of a book that C.S. Lewis wrote called The 
Abolition of Man, and in there he talks about bidding the 
gelding to be fruitful. Bidding the gelding to be fruitful. And 
I think in many cases that is what we are asking our kids to do 
today. We have rendered them as geldings as a result of the 
violence, the sex, the graphic nature of the entertainment both 
from the recording institution--recording industry, the movie 
motion picture industry, television. We have rendered them into 
geldings, and yet we are asking them to be fruitful. Is it any 
wonder that--you know, that we market tobacco to them, and we 
find out that teenagers' smoking goes up; we market sex to 
them, and we find out that abortions and sexually transmitted 
diseases are rampant in our kids today; we market philandery to 
them, we find that divorce is at an all-time high; we market 
violence to them, we find them shooting their fellow students 
in schools?
    That should not surprise any of us, and yet it always 
garners front-page headlines when these statistics come out. 
But the fact is we are marketing that to them.
    You know, it would have been really interesting to have as 
a member of this panel here this morning to have the tobacco 
industry before us, because you see it is politically correct 
to attack the tobacco industry, another legal entity, another 
legally sold product, just like the motion picture industry, 
recording industry, all the entertainment industries, another 
legal product being marketed. But if they were at the table, we 
would be hearing from people on both sides of this dais about 
how bad it is that you are marketing tobacco to our children.
    Well, I will tell you that I feel like some of the efforts 
of the entertainment industry are equally damaging to the 
psyche of our kids today, and I couldn't agree more that 
parents are the front line of defense for our kids. There is no 
question about that. I know that as a parent. But I will tell 
you that in today's culture, the entertainment industry is a 
powerful influence in all of our children's lives. I don't have 
the statistics before me, but I know they are significant in 
terms of the amount of--just the amount of time that our kids 
spend either listening to music, watching videos, watching TV 
versus the time that they spend with their parents or teachers. 
The people that we want to have the most influence, just 
frankly, are not getting as much face time with our kids as the 
entertainment industry.
    It is a powerful medium, and it is also a powerful medium 
for good, tremendous good. I can think of many songs that have 
been influential in my life and my kids' life and motion 
pictures that have the ability to promote and sell a very 
positive message of love and romance and helping your fellow 
man, a very powerful influence. And that is why I think that it 
really is incumbent upon this industry to regulate itself. It 
shouldn't be our responsibility, but I am afraid that it is not 
going to be until mothers and fathers like myself rise up and 
say enough is enough. We don't need any more studies. We know 
what the impact is of the violence that you sell to our kids 
and to our society. We know that. We don't need any more 
studies.
    What it is going to take, I believe, is for mothers and 
fathers across this Nation to rise up and say that is enough. 
We don't need a bill passed by Congress. That is not going to 
affect it. What we are going to need is mothers and fathers 
like myself and my wife, my friends and neighbors to say, that 
is it. No more. No more.
    So, Mr. Chairman, I am pleased that we are holding this 
hearing, and hopefully we can draw attention to some of the 
more extreme elements, in particular the recording industry, 
and ask for this industry's help, additional help, in self-
regulating the products that they are selling to our children.
    I yield back the balance of my time.
    Mr. Upton. Thank you.
    I would note for the record that the House has completed 
its legislative duties for the day, so I will ask that any 
member of either this subcommittee or Cliff Stearns' 
subcommittee, that their opening statements be made part of the 
record under unanimous consent.
    [Additional statements submitted for the record follow:]

 Prepared Statement of Hon. Nathan Deal, a Representative in Congress 
                       from the State of Georgia

    Good Morning and thank you, Mr. Chairman, for holding this hearing 
regarding the entertainment industry's efforts to curb children's 
exposure to violent content.
    Over the years, Congress has tried to determine how much of an 
influence the entertainment industry has had in the lives of minors. 
Because of the recent school shootings and much publicized violence 
among youth the Federal Trade Commission (FTC) conducted an extensive 
study that found that entertainment companies were intentionally 
marketing adult-rated products to minors. This study reviewed several 
various investigations into the impact of media violence on children, 
and found that there was a high correlation between exposure to media 
violence and violent behavior.
    Working to correct the problem, the FTC called on various branches 
of the entertainment industry; including motion pictures, music 
recording, and electronic games, to adopt policies prohibiting these 
practices and working to enforce these policies with rating systems. We 
have seen each of these industries adopt their own type of model for 
addressing the issue warning parents and children use to determine the 
violent content level. Each industry has come up with a system of 
ratings and guidelines to help parents and minors to have a greater 
understanding of what they are purchasing.
    While this is a good start, I am concerned that there are still 
some problems with the way the entertainment industry has routinely 
targeted advertising and marketing of its violent entertainment 
products to minors, especially the music recording industry.
    I thank the Chairman for focusing on this issue, and look forward 
to hearing from our witnesses.
                                 ______
                                 
 Prepared Statement of Hon. Bill Luther, a Representative in Congress 
                      from the State of Minnesota

    Thank you, Mr. Chairman, for recognizing me, and I want to welcome 
our distinguished panel.
    I want to commend the Federal Trade Commission for the excellent 
work it has been doing with regard to the entertainment industry's 
practice of marketing adult-rated material to minors. I think I can 
safely say that most of us in Congress were outraged by last year's 
report revealing these marketing practices. The Commission's April 2001 
follow-up report has been equally enlightening--we can clearly gauge 
the progress (or lack thereof) that the entertainment industry has made 
regarding its marketing practices.
    I think it's absolutely unnecessary (and wrong) for the 
entertainment industry to specifically and intentionally target our 
youth with advertisements promoting graphically sexual and violent 
products. I don't really think the First Amendment is at issue here. We 
are not talking about restricting the freedom of expression, but rather 
we are talking about voluntary restrictions on advertising schemes. I 
think the two concepts are distinct. As such, I want to applaud those 
industries that have begun to make reforms in their marketing 
practices--with the understanding that much more can be done. And I 
very much look forward to hearing why some sectors of the entertainment 
industry have not begun the job of cleaning up their acts.
    Thank you, Mr. Chairman, and I yield back the balance of my time.

    Mr. Upton. With that, I appreciate the testimony that our 
panel has delivered.
    Now we are joined on our panel by Mr. C. Lee Peeler, 
Associate Director of Advertising Practices of the Federal 
Trade Commission; Mr. Douglas Lowenstein, President of the 
Interactive Digital Software Association; Mr. Jack Valenti, 
President and CEO of the Motion Picture Association of America; 
Ms. Hilary Rosen, President and CEO of the Recording Industry 
Association of America; Mr. Doug McMillon, Senior VP and 
General Merchandise Manager of Wal-Mart; and Ms. Daphne White, 
Executive Director of the Lion and the Lamb Project. Your 
statements will be made part of the record in their entirety, 
and we ask you to limit your remarks, opening statements, to 5 
minutes.
    And, Mr. Peeler, we will start with you. Welcome.

STATEMENTS OF C. LEE PEELER, ASSOCIATE DIRECTOR OF ADVERTISING 
   PRACTICES, FEDERAL TRADE COMMISSION; DOUGLAS LOWENSTEIN, 
   PRESIDENT, INTERACTIVE DIGITAL SOFTWARE ASSOCIATION; JACK 
VALENTI, PRESIDENT AND CHIEF EXECUTIVE OFFICER, MOTION PICTURE 
 ASSOCIATION OF AMERICA; HILARY B. ROSEN, PRESIDENT AND CHIEF 
 EXECUTIVE OFFICER, RECORDING INDUSTRY ASSOCIATION OF AMERICA; 
 DOUG McMILLON, SENIOR VICE PRESIDENT AND GENERAL MERCHANDISE 
  MANAGER, WAL-MART STORES, INC.; AND DAPHNE WHITE, EXECUTIVE 
              DIRECTOR, THE LION AND LAMB PROJECT

    Mr. Peeler. Thank you. I appreciate the opportunity to 
appear before you today. As the chairman and members of the 
committee have underscored in their opening remarks, the 
subject of today's hearing, the marketing of violent 
entertainment products to children, is an important concern of 
America's parents. In response to requests from the Congress 
and the White House, the Federal Trade Commission has to date 
conducted two studies of this issue and is in the process of 
completion of a third study. My testimony today describes the 
findings of our first two studies and the status of our current 
review.
    The Commission's first report on the marketing of violent 
entertainment products to children was issued in September 
2000. It examined the advertising and marketing practices of 
the motion picture, recording and electronic games industry. 
The Commission's study found that individual companies in each 
industry routinely marketed to children the very products on 
which their own self-regulatory programs had placed parental 
warnings or ratings with age restrictions due to their violent 
content. For many of these products, the Commission found 
evidence of marketing and media plans that expressly targeted 
children under 17. In addition, companies' marketing plans 
showed strategies to promote and advertise their products in 
media outlets most likely to reach children under 17, including 
advertising on television programs most popular with teens; 
advertising in high school newspapers and teen-oriented 
magazines; placing ads on Internet sites popular with teens; 
distributing posters, free passes and other giveaways at teen 
hangouts, such as game rooms, pizza parlors and video stores; 
and showing rough cuts of R-rated films to children as young as 
10 or 12 to see what in the films most appealed to them.
    The September 2000 study also found that although the 
National Association of Theater Owners and certain retailers 
had taken steps to restrict sales of these products to 
children, children could readily purchase violent entertainment 
products. Just over half the movie theaters in our survey in 
May through July 2000 admitted unaccompanied children ages 13 
to 16 to R-rated films, and unaccompanied children ages 13 to 
17 were able to buy both explicit-content recordings and 
mature-rated electronic games 85 percent of the time.
    Finally, consumer surveys done for the September 2000 
report revealed high levels of parental concern about violence 
in movies, music and video games. Although these surveys show 
that parents highly value the existing rating and labeling 
systems, the surveys also indicate that many parents believe 
the rating systems could do a better job of informing them of 
the violent content in entertainment products.
    In response to our September 2000 report, the Senate 
Commerce Committee requested the FTC to prepare two additional 
reports. In April 2001, the Commission issued its first follow-
up report, which is a snapshot of current practices based on a 
review of publicly available advertising and marketing data. 
This report concluded that the motion picture industry and the 
electronic game industry had made some progress both in 
limiting advertising in certain popular teen media and in 
providing rating information in advertising, but that more 
remained to be done by each industry. In contrast, the 
Commission found that the music recording industry had not 
visibly responded to the Commission's September 2000 report 
beyond making the lyrics for recordings more readily available 
on Websites.
    The Senate Commerce Committee also requested the Commission 
to prepare a second, significantly more comprehensive report to 
be issued in the fall of 2001. The staff is currently preparing 
this report. The report will not only review advertising 
placements and disclosure of ratings information in 
advertising, but will also seek detailed information from 
selected industry members, including their marketing plans. The 
fall report will also include the results of a second 
undercover shopping survey to see if these products are sold to 
children without their parents' presence.
    In conclusion, let me say that despite the concerns about 
the existing self-regulatory efforts, because of First 
Amendment issues, the Commission continues to believe that 
vigilant self-regulation is the best approach to ensuring that 
parents are provided with adequate information to guide their 
children's exposure to entertainment media with violent 
content. Although the Commission was encouraged by the motion 
picture and electronic games industry's initial responses to 
its 2000 report, more clearly remains to be done by each 
industry to ensure that its marketing and advertising do not 
undermine the cautionary messages in their ratings and labels.
    The Commission greatly appreciates both the interest and 
support these studies have received from the U.S. Congress and 
the opportunity to provide the Congress with the information 
necessary for its oversight of this important issue. Thank you.
    [The prepared statement of C. Lee Peeler follows:]

 Prepared Statement of C. Lee Peeler, Associate Director, Division of 
  Advertising Practices, Bureau of Consumer Protection, Federal Trade 
                               Commission

                            I. INTRODUCTION

    Mr. Chairman, I am Lee Peeler, Associate Director of the Division 
of Advertising Practices of the Federal Trade Commission's Bureau of 
Consumer Protection. I appreciate this opportunity to discuss the 
Commission's reports on the marketing of violent entertainment products 
to children by the motion picture, music recording, and electronic 
games industries.\1\ The Commission issued its first report last 
September and a follow-up report this past April. The September report 
answered two questions: Do the motion picture, music recording, and 
electronic game industries promote products that they themselves 
acknowledge warrant parental caution in venues where children make up a 
substantial percentage of the audience? And, are these advertisements 
intended to attract children and teenagers? After a comprehensive 15-
month study, the Commission found that the answers to both questions 
were plainly ``yes.''
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    \1\ The views expressed in this statement represent the views of 
the Commission. My oral statement and responses to questions you may 
have are my own and are not necessarily those of the Commission or any 
individual Commissioner.
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    The April Report was narrower. It looked at whether the 
entertainment media companies were continuing to advertise violent 
entertainment products in popular teen media, and whether the 
advertisements contained rating information. The Commission found that 
the movie and elecronic games industries had made some progress on both 
fronts, but that the music recording industry had made no visible 
response to the September Report. The Commission urged the industries 
to make a greater effort to meet the suggestions for improvement 
outlined in its September Report as well as the industries' own 
promises for reform.
    All three industries studied have self-regulatory systems that 
purport to rate or label their products to help parents make choices 
about their children's entertainment. Notwithstanding, the Commission 
concluded in its September Report that members of each industry 
routinely targeted advertising and marketing for violent entertainment 
products directly to children. The Commission believes that such 
advertising and marketing efforts undermine each industry's parental 
advisories and frustrate parents' attempts to protect their children 
from inappropriate material.

                             II. BACKGROUND

    The Federal Trade Commission is the federal government's principal 
consumer protection agency. Congress has directed the Commission, under 
the FTC Act, to take action against ``unfair or deceptive acts or 
practices'' in almost all sectors of the economy and to promote 
vigorous competition in the marketplace.\2\ With the exception of 
certain industries and activities, the FTC Act provides the Commission 
with broad investigative and law enforcement authority over entities 
engaged in, or whose business affects, commerce.\3\ The FTC Act also 
authorizes the Commission to conduct studies and collect information, 
and, in the public interest, to publish reports on the information it 
obtains.\4\
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    \2\ 15 U.S.C. Sec. 45(a).
    \3\ The Commission also has responsibility under 46 additional 
statutes governing specific industries and practices. These include, 
for example, the Truth in Lending Act, 15 U.S.C. Sec. Sec. 1601 et 
seq., which mandates disclosures of credit terms, and the Fair Credit 
Billing Act, 15 U.S.C. Sec. Sec. 1666 et seq., which provides for the 
correction of billing errors on credit accounts. The Commission also 
enforces over 30 rules governing specific industries and practices, 
e.g., the Used Car Rule, 16 C.F.R. Part 455, which requires used car 
dealers to disclose warranty terms via a window sticker; the Franchise 
Rule, 16 C.F.R. Part 436, which requires the provision of information 
to prospective franchisees; the Telemarketing Sales Rule, 16 C.F.R. 
Part 310, which defines and prohibits deceptive telemarketing practices 
and other abusive telemarketing practices; and the Children's Online 
Privacy Protection Rule, 16 C.F.R. Part 312.
    The Commission does not, however, have criminal law enforcement 
authority. Further, under the FTCA, certain entities, such as banks, 
savings and loan associations, and common carriers, as well as the 
business of insurance, are wholly or partially exempt from Commission 
jurisdiction. See Section 5(a)(2) and (6)a of the FTC Act, 15 U.S.C. 
Sec. 45(a)(2) and 46(a). See also The McCarran-Ferguson Act, 15 U.S.C. 
Sec. 1012(b).
    \4\ 15 U.S.C. Sec. Sec. 46(b) and (f). Section 46(f) of the FTC Act 
provides that ``the Commission shall also have the power . . . to make 
public from time to time such portions of the information obtained by 
it hereunder as are in the public interest; and to make annual and 
special reports to Congress . . .''
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    On June 1, 1999, following the horrifying shooting incident at 
Columbine High School in Littleton, Colorado, then-President Clinton 
requested that the Federal Trade Commission and the Department of 
Justice conduct a study of whether violent entertainment material was 
being advertised and promoted to children and teenagers.\5\ The request 
paralleled congressional proposals for such a study.\6\ Revelations 
that the teen-aged shooters at Columbine High School had been 
infatuated with extremely violent movies, music, and video games 
reinvigorated public debate about the effects of violent entertainment 
media on youth.
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    \5\ 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).
    \6\ 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. 
Sec. 511 (1999); H.R. 2157, 106th Cong. (1999); 145 Cong. Rec. S5171 
(1999). In May 1999, the U.S. Senate Committee on Commerce, Science, 
and Transportation conducted hearings on the marketing of violent 
entertainment media to children. See Marketing Violence to Children: 
Hearing Before the Senate Comm. on Commerce, Science, and Transp., 
106th Cong. (1999), www.senate.gov/~commerce/hearings/hearin99.htm 
(visited July 30, 2000). Based on those hearings, in September 1999, 
the Majority Staff of the Senate Committee on the Judiciary issued a 
committee report on this issue. See Majority Staff of the Senate Comm. 
on the Judiciary, 106th Cong., Report on Children, Violence, and the 
Media: A Report for Parents and Policy Makers (Comm. Print. 1999), 
www.senate.gov/~judiciary/mediavio.htm (visited July 31, 2000).
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                      III. THE COMMISSION'S STUDY

A. Scope of the Study
    In response to the request, the Commission, with financial 
assistance from the Justice Department, collected information from the 
motion picture, music recording, and electronic game industries 
regarding their self-regulatory systems and marketing practices.\7\ The 
Commission requested information from the principal industry trade 
associations, as well as the major motion picture studios, the music 
recording companies, and electronic game companies.\8\ In addition, the 
Commission contacted interested government agencies, medical 
associations, academics, and parent and consumer advocacy groups.\9\ We 
reviewed information collected from consumers through various surveys 
and polls, and also designed and conducted our own surveys for this 
study.\10\ Specifically, we surveyed parents and children regarding 
their understanding and use of the rating and labeling systems, and how 
they made purchase decisions for these entertainment products.\11\ We 
also conducted an undercover survey of retail stores and movie theaters 
to see if unaccompanied children under 17 could purchase or gain access 
to products labeled as inappropriate or warranting parental 
guidance.\12\ Finally, we reviewed Internet sites to study how they are 
used to market and provide direct access to these products.
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    \7\ The Justice Department provided the FTC with substantial 
funding and technical assistance to enable the FTC to collect and 
analyze public and non-public information about the industries' 
advertising and marketing policies and procedures, and to prepare this 
written report and appendices. The analysis and conclusions contained 
in the Report are those of the FTC.
    \8\ The Commission received information from about 50 individual 
companies, as well as the Motion Picture Association of America (MPAA), 
the National Association of Theatre Owners (NATO), the Recording 
Industry Association of America (RIAA), the National Association of 
Recording Merchandisers (NARM), the Entertainment Software Rating Board 
(ESRB), the Video Software Dealers Association (VSDA), the Interactive 
Digital Software Association (IDSA), the Internet Content Rating 
Association (ICRA), the Software and Information Industry Association 
(SIIA), the Interactive Entertainment Merchants Association (IEMA), and 
the American Amusement Machine Association (AAMA).
    \9\ In addition to industry sources, the Commission received 
information from a wide range of consumer, medical, and advocacy 
organizations. The American Academy of Pediatrics, American 
Psychological Association, Center on Media Education, Center on Media 
and Public Affairs, Children Now, Commercial Alert, Lion and Lamb 
Project, Mediascope, National Institute on Media and the Family, 
National PTA, and Parents' Music Resource Center were among the 
organizations that provided information to the Commission.
    \10\ See Appendix E (Entertainment Industry Information Requests) 
of the Commission's September 2000 Report.
    \11\ See Appendix F (Mystery Shopper Survey and Parent-Child 
Survey) of the Commission's September 2000 Report.
    \12\ Id.
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B. The Entertainment Media Industry Self-Regulatory Systems
    The entertainment industries have recognized the public's concern 
about children's exposure to violent entertainment and have taken steps 
to alert parents to violent or explicit content through self-regulatory 
product rating or labeling programs. Each of these programs addresses 
violence, as well as sexual content, language, drug use and other 
content that may be of concern to parents.
    The motion picture industry uses a rating board to rate virtually 
all movies released in the United States, requires the age-related 
rating to appear in advertising, and makes some effort to review ads 
for rated movies to ensure that their content is suitable for general 
audiences. The music recording industry recommends the use of a general 
parental advisory label on music with ``explicit content.'' The artist 
and the music publishing company decide whether to place a parental 
advisory label on a recording and there is no independent third-party 
review; nor does the industry provide for any review of marketing and 
advertising. The electronic game industry uses a rating board to assign 
an age- and content-based rating, and requires that game packages bear 
the rating and that the rating information appear in advertising. It 
also is the only industry that has adopted a rule prohibiting its 
marketers from targeting advertising for games to children below the 
age designations indicated by the rating.

             IV. THE FINDINGS OF THE SEPTEMBER 2000 REPORT

    The Commission carefully examined the structure of these rating and 
labeling systems, and studied how these self-regulatory programs work 
in practice. We focused on the marketing of products designated as 
violent under these systems. We did not examine the content itself, but 
accepted each industry's determination of whether a particular product 
contained violent content.
    The Commission found that despite the variations in the three 
industries' systems, the outcome was consistent: individual companies 
in each industry routinely marketed to children the very products that 
have industries' self-imposed parental warnings or ratings with age 
restrictions due to violent content. Indeed, for many of these 
products, the Commission found evidence of marketing and media plans 
that expressly targeted children under 17. In addition, the companies' 
marketing and media plans showed strategies to promote and advertise 
their products in the media outlets most likely to reach children under 
17. These documents showed plans to advertise these products on 
television programs ranked as the ``most popular'' with the under-17 
age group, such as Xena: Warrior Princess, The Simpsons, WWF Smackdown, 
and MTV's Total Request Live; in magazines and on Internet sites with a 
majority or substantial (i.e., over 35 percent) under-17 audience, such 
as Game Pro, Seventeen and Right On!, as well as mtv.com, ubl.com and 
happypuppy.com; and in teen hangouts, such as game rooms, pizza 
parlors, and sporting apparel stores.
    Movies. Of the 44 movies rated R for violence the Commission 
selected for its study, the Commission found that 80 percent were 
targeted to children under 17. Marketing plans for 64 percent contained 
express statements that the film's target audience included children 
under 17. Though the marketing plans for the remaining seven R-rated 
films did not expressly identify an under-17 target audience, they led 
the Commission to conclude that the companies nonetheless targeted 
children under 17. That is, the plans either were extremely similar to 
the plans of the films that did identify an under-17 target audience, 
or detailed actions synonymous with targeting that age group, such as 
promoting the film in high schools or in publications with majority 
under-17 audiences.
    Music. The Commission found that all 55 of the explicit content-
labeled music recordings studied were targeted to children under 17. 
The marketing plans for 27 percent expressly identified teenagers as 
part of their target audience. The marketing documents for the 
remaining recordings did not expressly state the age of the target 
audience, but they detailed the same methods of marketing as the plans 
that specifically identified teens as part of their target audience, 
including placing advertising in media that would reach a majority or 
substantial percentage of children under 17.
    Games. Seventy percent of the 118 electronic games with a Mature 
rating for violence the Commission examined targeted children under 17. 
The marketing plans for 51 percent of these expressly included children 
under 17 in their target audience. Documents for the remaining games 
showed plans to advertise in magazines or on television shows with a 
majority or substantial under-17 audience.
    Further, although the National Association of Theatre Owners and 
some retailers had policies limiting the sale of rated or labeled 
products even before the Commission's study, most retailers made little 
effort to restrict children's access to products containing violence. 
Surveys conducted for the Commission in May through July 2000 found 
that just over half the movie theaters admitted children ages 13 to 16 
to R-rated films even when not accompanied by an adult. The 
Commission's surveys of young people indicated that, even when theaters 
refuse to sell tickets to unaccompanied children, they have various 
strategies to see R-rated movies. The Commission's surveys also showed 
that unaccompanied children ages 13 to 16 were able to buy both 
explicit content recordings and Mature-rated electronic games 85 
percent of the time.
    Although consumer surveys show that parents value the existing 
rating and labeling systems, they also show that parents' use and 
understanding of the systems vary. The surveys also consistently reveal 
high levels of parental concern about violence in the movies, music, 
and video games their children see, listen to, and play. These concerns 
can only be heightened by the extraordinary degree to which young 
people today are immersed in entertainment media, as well as by recent 
technological advances such as realistic and interactive video games. 
The survey responses indicate that many parents believe the rating 
systems could do a better job of informing them of the violent content 
in entertainment products.

              V. CONCLUSIONS OF THE SEPTEMBER 2000 REPORT

    The findings summarized above led the Commission to recommend that 
all three industries enhance their self-regulatory efforts.\13\ The 
Commission suggested that the industries:
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    \13\ The Commission's support for enhanced industry self-regulation 
in the advertising context is motivated in part by our strong belief in 
the benefits of self-regulation, and in part by our concern that 
government regulation of advertising and marketing--especially if it 
involves content-based restrictions--may raise First Amendment issues. 
The First Amendment issues that have been raised in the context of 
restricting or limiting advertisements for media products are 
identified in Appendix C of the Commission's September 2000 Report 
(First Amendment Issues in Public Debate Over Governmental Regulation 
of Entertainment Media Products with Violent Content).
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    1. Establish or expand codes that prohibit target marketing to 
children and impose sanctions for noncompliance. All three industries 
should improve the usefulness of their ratings and labels by 
establishing codes that prohibit marketing R-rated/M-rated/explicit-
labeled products in media or venues with a substantial under-17 
audience. In addition, the Commission suggested that each industry's 
trade associations monitor and encourage their members' compliance with 
these policies and impose meaningful sanctions for non-compliance.
    2. Increase compliance at the retail level. Restricting children's 
retail access to entertainment containing violent content is an 
essential complement to restricting the placement of advertising. This 
can be done by checking identification or requiring parental permission 
before selling tickets to R movies, and by not selling or renting 
products labeled ``Explicit'' or rated R or M, to children.
    3. Increase parental understanding of the ratings and labels. For 
parents to make informed choices about their children's entertainment, 
they must understand the ratings and the labels, as well as the reasons 
for them. That means all the industries should include the reasons for 
the rating or the label in advertising and product packaging and 
continue their efforts to educate parents--and children--about the 
meanings of the ratings and descriptors. Industry should also take 
steps to better educate parents about the ratings and labels.

            VI. FINDINGS OF THE APRIL 2001 FOLLOW-UP REPORT

    In January 2001, the Senate Commerce Committee requested that the 
Commission prepare two reports following up on its September 2000 
Report, to be issued in the Spring and Fall of 2001. The Committee 
asked the Commission to focus its review on two of the issues examined 
in the September 2000 Report: 1) whether the entertainment media 
industries continue to advertise violent R-rated movies, explicit-
content labeled music, and M-rated electronic games in popular teen 
media, and 2) whether the entertainment media are including rating 
information in their advertising. In April 2001, the Commission issued 
its first follow-up report.
    The Commission's review indicated that the entertainment media 
industry had made some progress both in limiting advertising in certain 
popular teen media and in providing rating information in advertising 
but that more remained to be done.
    Movies. The Commission found that the motion picture industry had 
made some positive changes to its advertising practices. Specifically, 
the Commission found virtually no advertisements for R-rated movies in 
the popular teen magazines reviewed. A spot-check of movie trailer 
placement revealed general compliance with the industry's commitment 
not to run trailers for R movies in connection with G- and PG-rated 
feature films. The motion picture studios now routinely include reasons 
for ratings in their print and television advertisements. Further, at 
least three-quarters of the official movie Web sites reviewed included 
the film's rating, the reasons for the rating, and links to sites where 
information on the rating system may be obtained. However, ads for R-
rated movies still appeared on the television programs most popular 
with teens, and the rating reasons in ads were usually small, fleeting, 
or inconspicuously placed.
    Games. The Commission's Spring 2001 review showed some improvement 
in the electronic game industry's advertising practices. The Commission 
found no ads for M-rated games on the popular teen television programs 
reviewed. The game company print ads, with only one exception, always 
included the game's rating icon and, in nearly all instances, content 
descriptors. Television ads gave both audio and video disclosures of 
the game's rating, and more than 80 percent of the official game 
publisher Web sites displayed the game's rating. However, the 
electronic game industry had not stopped placing ads for M-rated games 
in magazines with a substantial under-17 audience. The Commission also 
found that rating icons and descriptors in the print ads, while 
readable, were often smaller than required by the industry code; 
television ads never included the content descriptors; only a little 
more than half the Web sites reviewed displayed the rating clearly and 
conspicuously; and just 25 percent displayed the content descriptors 
anywhere on the site.
    Music. The Commission found that the music recording industry, 
unlike the motion picture and electronic game industries, had not 
visibly responded to the Commission's September 2000 Report; nor had it 
implemented the reforms its trade association announced just before the 
Commission issued that Report. The Commission's review showed that 
advertising for explicit-content labeled music recordings routinely 
appeared on popular teen television programming. All five major 
recording companies placed advertising for explicit content music on 
television programs and in magazines with substantial under-17 
audiences. Furthermore, ads for explicit-content labeled music usually 
did not indicate that the recording was stickered with a parental 
advisory label. Even when the parental advisory label was present, it 
frequently was so small that the words were illegible, and the ads 
never indicated why the album received the label. None of the recording 
company/artist Web sites the Commission reviewed linked to an 
educational Web site for information on the labeling system. The single 
positive note was that almost 40 percent of the Web sites included the 
music's lyrics, a step that can help parents screen recordings.\14\
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    \14\ The April Report provided a snapshot of advertising practices 
by some industry members a few months after publication of the 
Commission's September 2000 Report. Thus, it cannot be statistically 
projected to industry advertising as a whole. In addition, because it 
relied on advertising monitoring rather than internal industry 
documents, its results cannot be directly compared to the results of 
the review conducted for the September 2000 Report. Also, the review 
did not include information on children's access to these products at 
the retail level.
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                  VII. THE COMMISSION'S CURRENT STUDY

    The Senate Commerce Committee requested a second, more 
comprehensive, report to be issued in the Fall of 2001, which the 
Commission staff is currently preparing. In addition to reviewing 
advertising placement in popular teen media and checking ads in all 
media to see if they include clear and prominent rating information, 
the Commission is also seeking detailed information from individual 
industry members, including marketing plans for R-rated movies, 
explicit-content labeled music, and M-rated games released since the 
Commission issued its report last September. It will include the 
results of an undercover shopping survey to see if these products are 
sold to children without their parents present. The Fall 2001 report 
will also discuss industry compliance with commitments made following 
the September 2000 Report.

                           VIII. CONCLUSIONS

    Because of First Amendment issues, the Commission continues to 
believe that vigilant self-regulation is the best approach to ensuring 
that parents are provided with adequate information to guide their 
children's exposure to entertainment media with violent content. The 
Commission is encouraged by the motion picture and electronic game 
industries' initial responses to its September 2000 Report, but it is 
disappointed by the almost complete failure of the music recording 
industry to institute any positive reforms.
    More remains to be done by each industry. To avoid undermining the 
cautionary message in their ratings and labels, the industries should 
avoid advertising their products in the media most watched and read by 
children under 17. The challenge remains to make rating explanations as 
ubiquitous in advertisements as the rating itself and to present this 
important information clearly and conspicuously. The Commission urges 
individual industry members both to keep the industry's own commitments 
and to go beyond those commitments to meet the recommendations the 
Commission made in its September 2000 Report.

    Mr. Upton. Thank you.
    Mr. Lowenstein.

                STATEMENT OF DOUGLAS LOWENSTEIN

    Mr. Lowenstein. I hope I can be as good on the clock as Mr. 
Peeler. He hit 5 minutes on the mark.
    Mr. Upton. It is practice. He has been here before.
    Mr. Lowenstein. Thank you very much for having me here 
today. The video game industry has taken some extraordinary and 
I think unique steps to ensure that mature-rated titles are 
marketed responsibly and authorize sanctions against companies 
that violate our extensive advertising guidelines.
    I want to start, though, before getting into some of the 
details of that, by dispelling the myth that most gamers are 
kids. In truth, 145,000,000 Americans play video games and 
their average is not 12, it is not 14, it is not 16. It is 28 
years old. Sixty-one percent of all game players are over 18, 
35 percent are over 35 years old, and 43 percent of them are 
women.
    In short, we serve a mass market made up of players of all 
ages and all tastes, and their interests in the types of games 
they want to play range from sports games to puzzle games to 
games based on TV shows to racing games and action and 
adventure games, some of which have, in fact, violent content.
    But an important point to understand is that most games do 
not, in fact, contain violent content. Seventy percent are 
rated as appropriate for everyone ages 6 and up by a rating 
system that even industry critics have acknowledged is very 
reliable and credible. Last year, only 117 of the 1,600 games 
released were rated mature for users due to violence. And I 
might note that the best-seller lists also reflect the fact 
that most games that are popular don't have violent content. 
Only two of the top 20 best-sellers this year, for example, are 
rated as mature.
    This brings me to the issue of kids and mature-rated games. 
The fact is that the FTC's own survey confirms that parents are 
almost always involved in buying the games their kids play. In 
quoting from the FTC's first report, ``it is clear that most 
parents are able to play a watchdog role when they choose to do 
so.'' According to parents' responses to the FTC survey, 83 
percent are involved in the actual purchase transaction. FTC 
also found out, when we talk about parental responsibility, 
that in 49 percent of the cases where parents are aware of the 
rating system, they opt not to use it.
    So, again, I think those are important points to bear in 
mind.
    For over 7 years, the video game industry now has been 
committed to effective self-regulation. We created the highly 
praised Entertainment Software Rating Board. We have 
implemented a sweeping advertising code of conduct. We have 
distributed and produced PSAs featuring Tiger Woods, for 
example. This is an example of that advertising and public 
service announcements. We have distributed ratings brochures to 
retailers of this sort. In fact, Attorney General Granholm of 
Michigan, I believe, has distributed over 100,000 of these 
brochures to consumers in her State. We have worked with 
retailers to prevent the sale of mature-rated games to minors. 
And that is just a partial list.
    Let me now quickly turn to the FTC report. We certainly 
appreciated some of the complimentary remarks that the agency 
had made in both of those reports. And I want to say that the 
finding, for example, in the first report that some game 
company marketing plans aimed mature-rated product to 12-year-
olds is completely and totally indefensible, and it is one 
reason why we moved soon after that to look at ways to 
strengthen the system we have in place.
    In March of this year, we completed a process that we began 
9 months ago in which our board took the extraordinary step of, 
having always restricted our advertising to audiences for whom 
the games were not rated as appropriate, we beefed that up 
dramatically by adopting explicit guidelines governing the 
marketing of mature-rated games to persons under 17 years old, 
including a ban on advertising those games in magazines, where 
45 percent or more of the readers are under 17, and on 
television programs, where 35 percent or more of the viewers 
are under 17.
    But equally significant, we created a unique monitoring and 
enforcement capability within our autonomous ratings board and 
authorized the imposition of monetary and other sanctions for 
companies that violate these marketing and advertising 
guidelines.
    Now I know of no other industry--we have heard the tobacco 
industry mentioned here today, but I know of no other industry 
that has adopted such far-reaching guidelines and coupled them 
with actual enforcement sanctions against companies that 
violate those guidelines. We have not been perfect as an 
industry. I will be the first to admit that. And we do have a 
responsibility to educate consumers and we need to take that 
responsibility seriously, and we have done so. We have put out 
volumes of information about the ESRB ratings. We have 
empowered consumers to make informed choices. And the FTC and 
others acknowledge that parents are, in fact, in a position to 
control the games that come to their home. But at some point 
the responsibility of parents really kicks in, because I submit 
to you that there is no law that Congress can come up with that 
can mandate sound and responsible parenting.
    We have lots of problems with youth violence in this 
country, but I think we are doing our part to address them.
    [The prepared statement of Douglas Lowenstein follows:]

   Prepared Statement of Douglas Lowenstein, President, Interactive 
                      Digital Software Association

    Good morning, and thank you for inviting me to testify today on the 
interactive entertainment industry's response to last year's Federal 
Trade Commission report on entertainment industry marketing practices, 
and its follow up report this past Spring. I am testifying today on 
behalf of the Interactive Digital Software Association 1 the 
trade body representing U.S. video and computer game software 
companies. Our members publish games for use in the home. In 2000, the 
industry generated $6 billion in retail software sales. Analysts 
forecast that industry sales will reach $10-15 billion in the United 
States alone within the next five years. Of special interest to this 
Subcommittee is the fact that 40 million Americans play games on the 
Internet today, interactive entertainment sites were the fastest 
growing sites on the Web in 2000, and in March 2001, roughly one-half 
of all US Internet users spent time playing games.
---------------------------------------------------------------------------
    \1\ IDSA's members only publish software for the home. The arcade 
game business is a different sector with its own representatives.
---------------------------------------------------------------------------
    I would like to divide my testimony into three sections: first, a 
discussion offering some critical and important background about our 
industry, our markets, and our products; second, a review of self 
regulatory initiatives we have taken over the years to ensure the 
responsible labeling and marketing of video and computer games to 
consumers and; third, a review of actions taken since the FTC reports.

                          INDUSTRY BACKGROUND

Majority of Game Players are Adults, not Kids
    I'd like to start by addressing two of the great myths about the 
video game industry. First, the myth that video games are played 
predominantly by teenage boys. This is wrong.
    In fact, the primary audience for video games is NOT adolescent 
boys. According to research by Peter Hart last year, 145 million 
Americans say they play computer and video games, and their average age 
is 28 years old; 61 percent of all game players are over 18, 35% are 
over 35 years old, and 13% are over 50; 43% of those who play computer 
and video games are women.

70% Of Games Appropriate for Everyone; only 9% Are Rated Mature
    Second, let me dispel the myth that most video games are rated 
Mature and have significant levels of violence. Again, this is 
inaccurate. With the demographics of the industry changing rapidly, so 
too has the type and mix of products published by game companies. 
Contrary to popular perceptions, most games do not contain significant 
levels of violence. In fact, the video game rating system the industry 
voluntarily set up six years ago, and which has been widely praised 
(the FTC called it ``the most comprehensive'' of any of the systems it 
studied), has rated nearly 8,500 titles of which only 9% carry a Mature 
rating indicating significant violent content. Seventy percent are 
rated for Everyone over six. In 2000, only 117 out of over 1,600 titles 
released were Mature games, and these represented just 9% of total 
sales.
    Not only are most games appropriate for everyone, but also most of 
the best sellers are not violent. For example, in the last six months, 
the top selling games have been the Sims, Pokemon, Roller Coaster 
Tycoon, and racing and sports games. In 2000, only two of the top 
selling PC and video games year were rated M, and 16 were rated 
Everyone. So far through June 2001, only two of the top selling 
computer and video games are rated mature, compared to twelve that are 
rated ``E'' and six that are rated ``T''.
    What all this reflects is the fact that video games are now mass 
market entertainment and the range and diversity of products has 
widened, resulting in a substantial market for casual games like 
puzzle, board, and card games, and hunting and fishing titles, in 
addition to staples like racing, football, and action games.
    In short, this industry has seen its sales double since 1995 and 
the bulk of that growth has been fueled by consumers over the age of 18 
and by games whose content has broad appeal.

Parents and Adults, not Kids. Actually Purchase at least Eight out of 
        Ten Games
    One last critical point of context: unlike other entertainment 
products, most newly released video games cost anywhere from $40-60. 
Thus, it's not surprising then, when you add this to the fact that a 
majority of consumers are adults that IDSA research finds that nine out 
of every ten video games are actually purchased by someone over 18. 
Furthermore, 83% of the kids who do buy games say they have the 
permission of their parents to do so. Similarly, in a survey completed 
by Peter Hart last Fall, 83% of parents said they ``try to watch or 
play at least once every game that their child plays to determine 
whether it is appropriate.''
    Notably, the FTC's own survey confirms these findings. ``It is 
clear that most parents are able to play a watchdog role when they 
choose to do so . . . According to parents' responses, [83%] are 
involved in the actual purchase transaction; 38% report that they 
usually purchase or rent the games, and another 45% of parents do so 
together with the child.''
    So any discussion of how our industry markets its products must 
bear in mind the fact that a majority of those who buy and use our 
products are adults, not kids, so parents are still almost certainly 
going to be involved in the actual purchase. As the FTC said,
          ``This level of parental involvement, either at the point of 
        selection or purchase, means that most parents have the 
        opportunity to review rating information or to check the 
        product packaging to determine whether they approve of the 
        game's content.''
    Put another way: if a child has a game that's not appropriate for 
him or her, chances are that Mom or Dad is the one who bought it.
    This does not mean our industry does not have an obligation to 
market products responsibly and to label them accurately. But it does 
mean that parents are the first, last, and best line of defense against 
products that are not appropriate for their children.

                COMMITMENT TO EFFECTIVE SELF-REGULATION

    The video and PC game industry has been committed to effective 
self-regulation since the formation of the IDSA in 1994. We have 
consistently and continuously sought to respond to concerns about the 
small number of our products that contain significant violence, 
balancing our absolute commitment to creative freedom with our 
commitment to empowering consumers to make informed choices. We are 
guided by our belief that the ultimate responsibility for controlling 
the games that come into the home lies with parents, not industry, not 
Congress, and not federal or state governments. According to the FTC, 
45% of parents who are aware of the video game rating system say they 
do not use it. I submit to you that no one has yet conceived of a law 
that can mandate sound parenting.

Initiatives on Game Ratings
    In 1995, the IDSA created the Entertainment Software Rating Board, 
or ESRB, which uses teams of independent, demographically diverse 
raters to review each and every video game. ESRB issues ratings 
suggesting--and that is a key word--suggesting, but not dictating--the 
age appropriateness of a title. In addition, ESRB ratings provide 
simple but clear information about the content that influenced the 
rating, such as violence, strong language, or suggestive themes. The 
philosophy underpinning the ESRB system is to give parents the tools to 
make informed choices, but not to attempt to dictate to them what is 
right for their families. At the same time the ESRB was created, IDSA 
voluntarily created an Advertising Code of Conduct requiring that the 
ratings and content information issued by ESRB be placed on packaging 
and in advertising. The Ad Code also contained a provision advising 
``companies must not specifically target advertising for entertainment 
software products rated for Teen, Mature, or Adults Only to consumers 
for whom the product is not rated as appropriate.''
    In 1997, recognizing the emergence of the Internet, the ESRB 
launched a new rating service called ESRB Interactive, or ESRBi. 
Through this service, ESRB offers companies the opportunity to rate 
their websites and video games distributed on line. More and more 
companies are now rating online games and game websites with ESRBi.

ESRB Ratings are Accurate and Reliable
    We are confident that people from all quarters regard the ESRB 
ratings as helpful and reliable. In this regard, Peter D Hart Research 
Associates completed a new survey in July 2000 seeking to gauge whether 
consumers themselves believe that ESRB ratings are accurate. The 
research involved mall-intercept interviews with 410 adults nationwide, 
including 246 parents who were shown videotapes of game clips and asked 
to rate them based on the ESRB standards. The survey found that ``in 
84% of all instances, games are rated equal to or less strictly than 
the official ESRB rating.'' Hart found that the ESRB is ``twice as 
likely to be more conservative than the public'' in rating decisions. 
With respect to the content descriptors, the survey found 
``participants are generally in agreement with the ESRB on violence 
descriptors, and in instances in which there is disagreement, they are 
usually less strict than the ratings board.'' In short, the ESRB 
ratings are reliable and effective. No rating system will ever generate 
100% agreement since everyone brings their own biases to the process. 
But we think the level of concurrence registered by consumers for the 
ESRB is extremely impressive. And the FTC noted last September that the 
independent rating system used by the video game industry ``appears to 
be helpful to those parents who actually use it'' and that a majority 
of these parents say it does an excellent or good job in advising them 
on the levels of violence in our products.

Consumer and Retailer Education and Enforcement
    Starting in 1995, the ESRB maintained an active program to provide 
information on the ESRB to retailers and consumers. It established a 
toll free number which has logged millions of calls since its 
inception, created a multi lingual web site where consumers can get 
information on the age and content rating of over 8,000 video games, 
and distributed millions of Parent Guides to ESRB Ratings to retailers 
and advocacy throughout the country, as well as to local government 
officials upon request, including Attorney General Ryan of Illinois and 
Attorney General Granholm of Michigan. In fact, AG Granholm has 
distributed nearly 100,000 ESRB educational brochures across the state, 
with the active support of the ESRB.

Tiger Woods PSA
    In the Fall of 1999, ESRB launched an extraordinary campaign to 
raise awareness and use of its ratings, with the centerpiece being a 
PSA featuring Tiger Woods urging parents to ``Check the Rating'' of 
games they buy; ESRB purchased advertising in major national 
publications with significant parent readership, such as Good 
Housekeeping, Parenting, and Newsweek. ESRB placed pull-out flyers in 
major parent-oriented publications, such as Child Magazine, it 
redesigned its consumer brochures and distributed millions to leading 
retailers, and it reached out to leading national grassroots 
organizations with ties to schools and parents, such as Mothers Against 
Violence in America and the PTA seeking ways to partner with them to 
get the word out to consumers, especially parents, about ESRB ratings 
and how to use them.

Initiatives on Retail Enforcement
    The IDSA has been proactive on the issue of retail enforcement long 
before the FTC or members of Congress expressed interest in the 
subject. The IDSA sent letters to major national retailers asking them 
to make a commitment to consumers to use their best efforts not to sell 
Mature rated games to persons under 17, a step we had also taken in 
October 1998. To date, Toys ``R'' Us, K-Mart, Wal-Mart, Target, Circuit 
City, Staples, and CompUSA have all adopted policies restricting the 
sale of video games to persons under 17. IDSA supports those efforts.
    But we must note that we've supported these efforts even though the 
Mature rating itself does not say that a title is not appropriate for a 
person under 17; rather, the rating says that the content ``may not be 
suitable'' for a person under 17. There is a material difference. The M 
rating is a point of information and guidance for consumers, and is not 
an absolute statement on what is or is not appropriate for a particular 
child. We believe that this decision is one best left to parents who, 
the FTC itself acknowledges, are usually involved in buying or renting 
the games their kids use. A final point on retailers: we recognize and 
respect the fact that the ultimate decision on what policies to adopt 
in stores properly lies with the individual retailers who are the best 
judge of the relationship they want with their own customers.

Initiatives on Advertising and Marketing
    In September 1999, the IDSA Board took the extraordinary and far 
reaching step of asking the ESRB to create a new Advertising Review 
Council (ARC) within the ESRB. The ARC is empowered to ensure that all 
advertisements by those who use ESRB ratings adhere to strict content 
standards covering such areas as violence, sex, and language, and to 
enforce compliance with all other provisions of the industry ad code, 
including the anti targeting provision. In addition, the IDSA shifted 
responsibility for the ad code and its enforcement from the association 
to the new ESRB ad council, and provided a major increase in resources 
to support expanded staffing and more aggressive monitoring and 
enforcement of advertising standards. This initiative was undertaken 
long before the FTC report was completed, and reflected our own 
judgment that our industry needed to revamp and step up our approach to 
monitoring and enforcing our advertising standards.

                            THE FTC REPORTS

    We appreciate the fact that the September 2000 FTC described our 
industry's overall self-regulatory program as ``the most comprehensive 
of the three industry systems studied by the Commission'' and that it 
recognized that ``it is widely used by industry members and has been 
revised repeatedly to address new challenges, developments, and 
concerns regarding the practices of our members.'' The FTC also pointed 
out that, quite the opposite of standing by idly, we have been 
aggressive in seeking compliance with our standards. As it put it, ``to 
its credit, the IDSA has taken several steps to encourage industry 
members to comply with the industry's various ratings and advertising 
requirements.''
    We were extremely pleased that the FTC report released in April 
2001 acknowledged the many positive steps we've taken since the 
original report to address legitimate concerns about industry marketing 
practices, though candidly, we think it understated the importance and 
scope of the actions we've taken.

IDSA Actions Since The December, 2000 FTC Report
    Advertising Guidelines: First and foremost, we have taken 
extraordinary additional steps to enhance our marketing and advertising 
code. Our ad code always contained a general restriction on advertising 
titles to audiences for whom the game may not be appropriate. But soon 
after the report was released, the IDSA convened a task force of 
industry marketing executives to explore how to respond to the FTC 
findings.
    On March 14, 2001, the IDSA Board of Directors adopted a series of 
explicit guidelines to govern the marketing of Mature rated games to 
persons under 17 years old. Among other things, these guidelines 
prohibit the marketing of M rated games in magazines where 45% or more 
of the readers are under 17 and on TV shows where 35% or more of the 
viewers are under 17.
    We believe the adoption of these guidelines is unprecedented. We 
know of no other industry in the entertainment or other fields, which 
has issued such explicit guidelines to restrict marketing of a product 
which is entirely legal to sell to persons under 17, and which has 
coupled such guidelines with a self regulatory body with the power to 
enforce compliance and punish violations of them.
    Our Board's decision to adopt these guidelines was a difficult one. 
As I said earlier, there is nothing in the ESRB rating system that even 
defines a Mature-rated product as one that is inappropriate for persons 
under 17. The ESRB rating is a guide for parents; it is not intended to 
be a means to restrain the sale or distribution of Mature-rated video 
games. Moreover, unlike other products whose marketing may be 
restricted as a matter of law, it is entirely legal to advertise and 
sell M-rated video games to persons of any age. Thus, our members 
wrestled with the notion of adopting voluntary guidelines that could 
limit their rights to freely advertise their games. In the end, we 
believe the guidelines adopted appropriately and aggressively address 
concerns about target marketing.
    Establishing limits on Mature-rated game advertising in game 
publications was an especially difficult issue. But we took this step 
anyway. For many game publishers, advertising in these publications is 
the primary, most efficient, and cost effective way to reach their core 
adult gamer audience. Unlike other entertainment industries which are 
more dependent on mass media advertising, and who capitalize on free 
advertising outlets like music videos, radio, and TV film review and 
entertainment shows, our industry is dependent on this specialty press. 
Thus, reasonable limits on advertising Mature-rated titles in game 
publications must be carefully balanced with preserving the right and 
ability of companies to effectively reach their target consumers. In 
adopting these guidelines, we were sensitive to our fundamental 
obligation as a content industry protected by the First Amendment to 
adopt guidelines that ensure that Mature-rated products are marketed 
appropriately, but do not have the practical effect of chilling the 
creative process or controlling the types of products brought to 
market.
    In addition to promulgating the guidelines, we have also taken the 
extraordinary and unprecedented step of strengthening our existing 
enforcement system to sanction violators of the industry guidelines. 
Under this new enforcement system, ESRB is empowered to take a wide 
range of steps against ad code violators, including levying fines, and 
in extreme cases, actually withholding a rating, which would be 
commercially crippling for any software publisher.
    I am proud to say that not even the tobacco and alcohol industries, 
whose products cannot be legally sold or marketed to persons under 18, 
have gone as far as our industry in adopting meaningful marketing 
guidelines restricting marketing to minors, and giving them teeth 
through a comprehensive enforcement regime.
    Education: IDSA has continued its efforts to broaden awareness of 
the rating system through outreach to major medical organizations. In 
January, we sent letters to the American Academy of Child and 
Adolescent Psychiatry, the American Psychiatric Association, the 
American Nurses Association, the American Academy of Pediatrics, and 
the American Medical Association asking them to ``work with us'' to 
expand ESRB educational efforts. To date, and to our disappointment, 
none of these groups have responded affirmatively.
    Derek Jeter PSA: This Spring, the ESRB released a new PSA featuring 
New York Yankees' All-Star Derek Jeter urging parents to ``check the 
ratings'' before they buy video and computer games. This PSA is airing 
in retailers around the country, and on more than 50 television 
stations--including cable and broadcast outlets--it has generated 
nearly ten million audience impressions so far.

                ACADEMIC RESEARCH ON VIOLENT VIDEO GAMES

    It's easy to lose sight of the fact, in all the rhetoric, that 
video games are legal products for people of all ages, that they are 
constitutionally protected products, and that at best, the scientific 
evidence linking them to harmful effects is weak and ambiguous and at 
worst does not exist. Indeed, that's exactly what The Government of 
Australia concluded in December 1999 after an exhaustive evaluation of 
all the available research on violent video games.
    The Australian Government report concluded: ``After examining 
several attempts to find effects of aggressive content in either 
experimental studies or field studies, at best only weak and ambiguous 
evidence has emerged. Importantly, these studies have employed current 
games or concerned contemporary young players who presumably have 
access to the latest games. The accumulating evidence--provided largely 
by researchers keen to demonstrate the games' undesirable effects--does 
indicate that it is very hard to find such effects and that they are 
unlikely to be substantial.''
    It's also what the Surgeon General of the United States found in 
his sweeping examination of the causes of youth violence. Of the 
research on video games, Surgeon General Satcher said, ``The overall 
effect size for both randomized and correlational studies was small for 
physical aggression and moderate for aggressive thinking . . . The 
impact of video games on violent behavior remains to be determined.'' 
This conclusion itself was based on a study that several experts have 
said is seriously flawed methodologically and likely biased to find a 
link between games and violent behavior.
    I note these research findings to further dramatize the fact that 
our industry has taken extraordinary and far reaching steps to address 
concerns about violence in our products even though such products are a 
tiny fraction of overall industry offerings, even though parents are 
usually the ones buying games for their kids, even though most game 
players are adults, and even though there is no credible evidence that 
they lead to violent behavior.

                               CONCLUSION

    Mr. Chairman, I will not tell you our industry has been perfect 
either in its conduct or its implementation of our own standards. I 
will tell you we have shown a genuine commitment to the principle of 
informing consumers about the content of our products and regulating 
how these products are marketed. We have proven that with or without 
the FTC, our efforts to continue to enhance our self-regulatory regime 
is unwavering.
    At the same time, we must acknowledge that we do live in a world 
where media is incredibly complex, where the Internet spans the globe, 
where consumers, young and old, have access to information in ways 
never before imagined. In this environment, it is simply not possible 
or realistic to create an airtight system where young people do not 
hear about, or even obtain, games that are not appropriate for them. To 
the extent this occurs due to industry's conscious effort to target 
kids to buy M rated products in violation of industry standards, it is 
not defensible. But to the extent it happens, as a result of the 
information and media explosion flooding over all of us, it is unfair 
and unrealistic to point fingers.
    We are proud of our industry's record of producing the most 
advanced entertainment products available in the world today, and we 
are proud of our commitment to the responsible marketing of these 
products. We look forward to a dialogue with the Committee on these 
issues. Thank you.

    Mr. Upton. Thank you.
    Mr. Valenti, your opening statement.

                    STATEMENT OF JACK VALENTI

    Mr. Valenti. Mr. Chairman, I thank you. Those Members of 
the House of Representatives who are in the first year of their 
17th term were just entering Congress when the film industry's 
voluntary movie rating system was born. That is on November 1, 
1968, 30, what--32 years and 8 months. I submit to all of you 
that nothing lasts that long in this brittle, explosive, 
volatile marketplace unless it is providing some kind of a 
benefit to the people that it aims to serve, in this case, the 
parents of America. Since the inception of this rating system, 
30--almost 33 years ago, it has had one prime objective, and 
that is to give advanced cautionary warnings to parents so that 
parents, as Congresswoman Harman pointed out, can make their 
own decisions about what movies they want their children to see 
or, following up with Congressman Largent, movies they don't 
want their children to see. That is a parental responsibility 
that ought to be invulnerable to all outside interference.
    Now how is it doing? Since 1969, the Opinion Research 
Corporation of Princeton, New Jersey, has conducted nationwide 
polls of 2600 respondents. In September of last year, the 
latest poll revealed that 81 percent of parents with children 
under 13 found this rating system to be very useful to fairly 
useful in helping them guide their children's movie-going. And 
I was very pleased to hear Mr. Peeler speak a minute ago, 
because the FTC last year conducted its own independent 
national survey and they found that 80 percent of parents said 
they were, ``Satisfied with the rating system.''
    Now following up to Mr. Lowenstein, are we perfect? Of 
course not. Nothing made by mortal men and women is ever going 
to be perfect, and we can always improve. But we are doing our 
darndest to do what we said we would do, to fulfill our 
obligation and turn away revenues at the box office in order to 
fulfill and redeem that obligation to parents. I don't know any 
other industries--maybe the video game or others--who turn away 
revenues in order to redeem an obligation to parents.
    Now the next question that comes up is how the rating is 
done. The fact is that we are not dealing here with euclids, 
geometric equations, which are always pristine and pure and 
clean-shaped and final. The fact is we are dealing with 
subjectivity. Vexing though it may be, social scientists, child 
development experts, Wall Street analysts and movie raters, are 
all immersed in subjectivity. The lines we draw are smudged. 
The veils we looked at are murky. And because you are trying to 
say, as the Wall Street analysts, ``is the stock market going 
up or down?'' nobody knows. Does a 6-year-old boy who becomes 
agitated by watching some aggressive material on television at 
the age of 20 pick up a Glock 9 and blow somebody's head off? 
Nobody knows. We do the best we can to try to give parents some 
guidelines and let them make the decisions.
    Let me go on to the FTC report which Mr. Peeler alluded to. 
The first report was issued on September 10, 2000. Within 17 
days of the issuance of that report, Motion Picture Association 
presented to the Congress a 12-point set of initiatives in 
place today. And I must say I think they are being complied 
with. Among that was that I appointed within each of the major 
studios a compliance committee and a compliance chairman whose 
duty it was to examine the marketing plan of every single 
motion picture that that company is releasing. That went into 
effect last October.
    I'm now getting reports, written and oral, and face-to-face 
meetings to make sure that that monitoring goes on. I think 
some of the things that the first FTC report said that the 
movie industry was doing are indefensible. I wouldn't defend it 
if my career and job depended on it. But that is being 
corrected now. And I think we are trying to make up for some of 
these frailties and, I would like to believe, inadvertent 
actions that took place.
    I could go on here with my blathering, but I would be eager 
to answer any questions that you have. All I can tell you is I 
heard what Congressman Largent is saying and others, and I 
agree. I am a parent of three children myself and cared deeply 
about their growing up to become good citizens. Thank God they 
have. But I do know that my wife and I, when they were younger, 
were absolutely stern and forbidding in the kind of movies we 
wanted our children to see or the music they wanted to listen 
to, which I believe, as Ms. Harman pointed out, that is the 
duty of a parent. And if there isn't built within this child 
early in life a moral shield that will be impenetrable to their 
brandishments, their peers or the mean streaks enticements, no 
law, no fiery rhetoric, no Presidential directive, no 
congressional legislation is going to salvage that child's 
conduct or locate some lost moral core.
    Thank you, Mr. Chairman.
    [The prepared statement of Jack Valenti follows:]

Prepared Statement of Jack Valenti, Chairman & Chief Executive Officer, 
                 Motion Picture Association of America

    Thank you, Chairman Upton and Congressman Markey, for giving me the 
opportunity to testify here today in front of your Subcommittee. Yours 
is a panel, I might add, that has been involved in these issues in a 
balanced and careful way for many, many years. And the panel that 
helped to originate the ``V-chip,'' an enormously important tool for 
empowering parents.
    When the Federal Trade Commission's first Report came out last 
fall, our industry responded seriously, responsibly and expeditiously 
to address the aspects of the Report that showed where we, like any 
industry, could do better.
    Our industry leaders recognized that there was room for improvement 
in some of the marketing practices of our studios. We needed to do a 
better job of not inappropriately marketing certain films to children. 
So I immediately convened a series of round-the-clock meetings to 
address the problems identified in the FTC's first Report. I am pleased 
to tell you that just three weeks after the release of that Report, we 
announced a 12-point set of initiatives that every major film studio 
has pledged to follow.
    The plan requires, among other things, that our companies appoint 
senior compliance officers to monitor each studio's marketing 
practices, furnish each newspaper with the reasons for the ratings of 
each of their films and not show R-rated trailers in connection with G-
rated films.
    Also as part of the plan, MPAA established and expanded web sites 
that provide parents with general information about the ratings system 
and the specific places where they can obtain ratings information about 
every film recently in release (for example ``filmratings.com'' and 
``parentalguide.org''). Not only will parents find a film's rating 
here, but also the reasons why a movie received a particular rating. I 
should note that this is information that we have long provided to film 
critics and others, and encouraged them to use in their reviews of new 
movies. But we took it a step further and put this information online 
(and in advertisements) so that any parent will be able to find it. Mr. 
Chairman, a copy of the complete 12-point set of MPAA initiatives is 
attached to my remarks. These Initiatives are in place and working. Our 
Compliance Committees are functioning as we pledged they would.
    Seven months later, when the FTC released its second Report in 
April, it became clear that we were honoring our commitments. The 
Commission acknowledged that the ``motion picture . . . industr[y] 
[has] taken a number of significant steps to limit marketing violent R-
rated films . . . to children and to provide parents with more 
information regarding the content of their products.'' The second 
Report found virtually no advertisements for R-rated movies in popular 
teen magazines, routine inclusion of reasons for ratings in print and 
television advertising, and substantial compliance with the industry's 
pledges regarding trailer placement.
    Let's also discuss the voluntary movie rating system. It is, on 
occasion, the subject of criticism, sometimes by film reviewers and 
directors for being ``too strict'' and sometimes by members of 
Congress. Let us not forget that the R-rating does not mean ``Adult-
Rated''--that is the province of the NC-17 rating. Children are 
admitted to R-rated movies if accompanied by a parent or adult 
guardian. The rating system believes that only parents can make final 
decisions about what they want their children to see or not to see. 
Indeed, for almost 33 years the movie industry has been offering 
advance cautionary warnings to parents about individual films so that 
parents can make their own judgments. We are the only enterprise in our 
national marketplace to voluntarily turn away revenues in order to 
redeem our obligation to parents.
    In the most recent survey by the Opinion Research Corporation of 
Princeton, New Jersey (September, 2000), 81 percent of parents with 
young children found the rating system to be ``fairly useful'' to 
``useful'' in helping them guide their children's movie going. The 
FTC's own independent survey, released at the time of its first Report, 
in the Fall of 2000, revealed that 80 percent of parents were 
``satisfied'' with our rating system.
    We are not perfect, to be sure, but our companies are committed to 
providing parents with advanced information about movies so that 
parents can make informed judgments about their children's visual 
viewing.
    Mr. Chairman, this is an oversight hearing and my time is limited, 
so I will not discuss some of the well-intentioned but very troubling 
legislation within the jurisdiction of your Committee. Suffice to say, 
though, that I agree with the bipartisan views of the FTC 
commissioners, who wrote, ``Because of The First Amendment protections 
afforded these products, the Commission continues to believe that 
vigilant self-regulation is the best approach to ensuring that parents 
are provided with adequate information . . .''
    Thank you.

    Mr. Upton. Thank you.
    Ms. Rosen.

                  STATEMENT OF HILARY B. ROSEN

    Ms. Rosen. Thank you, Mr. Chairman, and thank you for 
inviting me today.
    Record companies perform many functions, but a most 
important part of our job is to market and promote an artist's 
vision and music to his fans and to help them find new 
audiences for their work. It is a task we take seriously, and I 
want to stress to you today that it is a task we perform 
responsibly.
    In 1985, we reached agreement with the national PTA and the 
Parents Music Resource Center to label explicit lyrics, music 
releases with a parental advisory logo. The logo has been made 
uniform in size and it appears on the permanent packaging or on 
the artwork on the front side of a CD or cassette. In many 
cases, record companies release edited versions of the same 
product and those are indicated on the top spine at retail, the 
so-called radio versions.
    The FTC actually found that 77 percent of parents were 
aware of the music industry's system, and of those that were 
aware, 74 percent approved of the system.
    But in response to legitimate criticisms, we did more. In 
October, 2000, we created a uniform standard of application for 
the logo. We created an advertising policy to make sure that 
people were aware of the logo. We created guidelines for the 
Internet and music distribution on line.
    In February, the FTC issued another report and gave the 
music industry a failing grade. To be sure, we deserved it, and 
I said so publicly at the time. Immediately, I began working 
with the National Association of Recording Merchandisers and 
our member companies to establish an implementation task force 
for the Parental Advisories Program. I have met personally with 
top executives of every major record company to review their 
implementation of the guidelines, And we have been meeting with 
our retail partners as well.
    I am confident we are making progress in assuring that our 
guidelines are being met. There is no excuse for not doing what 
we said we were going to do. The implementation task force, 
just for your information, has also addressed some other 
program improvements, which we are currently working into our 
guidelines: Expanding the advertising requirement to television 
and radio, using the label on street marketing programs and 
music sampler give-aways, and encouraging the posting of 
lyrics.
    The FTC criticisms have generally fallen into two 
categories. The first I have just addressed. We must do better. 
The second we are going to consistently disagree with them on, 
because it is more problematic. Despite their claims that they 
are not making content-based judgments, the FTC is repeatedly 
criticizing us for marketing inappropriate content for teens. 
Put simply, the RIAA Parental Advisory Program is not an age-
based rating system.
    Therefore, all of the FTC criticisms that we are marketing 
material that we have already determined is inappropriate to 
children is simply unfounded. Our label is an advisory logo 
about explicit lyrics and it makes no judgments, nor do we 
think such judgments are warranted about what is age 
appropriate.
    Informational rating systems must reflect the nature of 
their respective media. Our system is often compared to 
television and movies and video games. And while our industries 
work together for education, they are very different, and for 
good reason. Books have no label or rating, even those that 
contain explicit content and are marketed directly to children. 
Why? Because words are subject to interpretation, to 
imagination, and most people feel labeling books is a bad idea.
    Lyrics are likewise susceptible to varying interpretations. 
Words will have different meanings, depending on who is hearing 
them. Music is closer to books than it is to video games or 
television or movies.
    Parents are overwhelmingly satisfied with our program, and 
we can do more. We can reach the rest of those parents that the 
FTC found didn't know about the program and were engaged in 
aggressive efforts to do so.
    Technology has a positive impact on this. In months to 
come, major record companies are launching subscription 
services to deliver music on-line. Each of these services are 
exploring ways to put parental tools in place; for filters to 
allow consumers to block labeled music if they choose.
    This issue of explicit lyrics is a difficult one and one on 
which there may be fair and principal disagreements. I 
recognize there are some who would like to see us impose more 
self-regulation or Government regulation, but you must 
understand there are people in the music community who think we 
have gone too far.
    In summary, I think we have achieved the right balance. The 
recording industry has a system in place that works, one that 
reflects the nature of the unique art form. It is being 
strengthened and promoted and it is overwhelmingly supported by 
America's parents. Thank you.
    [The prepared statement of Hilary B. Rosen follows:]

  Prepared Statement of Hilary B. Rosen, President and CEO, Recording 
                    Industry Association of America

Introduction
    Mr. Chairman and members of the Committee, thank you for the 
opportunity to appear before you today.
    I am Hilary Rosen, President and CEO of the Recording Industry 
Association of America, an association that represents over 600 record 
companies.
    Ours is an industry that prides itself on its diversity. Our 
companies work with hundreds of thousands of artists to create 
countless works across the musical spectrum, from acoustic ballads to 
zydeco melodies. In fact, our members create over 90% of the legitimate 
sound recordings sold in the United States.
    Record companies perform many functions but a most important part 
of our job is to market and promote an artist's music to his fans and 
help them find new audiences for their work. It is a task we take 
seriously and I want to stress to you today that it is a task we 
perform responsibly. After all we are not just business executives, we 
are parents and concerned citizens who make decisions based on our 
dreams for our children and our commitment to our communities.
    That is why today I want to talk about how our present day Parental 
Advisory system came about, why it is not an age-based system, the 
support it enjoys and what we're doing to build on that support.

The Evolution of the Recording Industry's Voluntary Program
    The premise of our system is to balance an artist's right of self-
expression with a parents' need for information to make choices based 
on their children's individual situation and their own values.
    In 1985, we reached agreement on that approach with the National 
Parent Teacher Association and the Parents Music Resource Center. 
Within months, music releases with explicit lyrics, whether about 
violence or sex, were identified.
    And over the years, our system evolved, responding to the changing 
needs of retailers and parents and adapting to new technological 
developments in the entertainment industry.
    In 1990, after some parents complained that they couldn't spot the 
advisory easily, we took steps to strengthen our system. We established 
a uniform, universally recognizable Parental Advisory logo. It is one 
inch by a half-inch on cassettes and CD jewel boxes. We also launched 
an extensive marketing campaign to educate both parents and retailers 
about the system and the new logo.
    And in October, 2000, we again announced new steps to improve our 
system. In fact, we announced three:
    First, we provided our members with uniform standards to guide a 
label and artist in deciding whether to apply the Parental Advisory 
logo. They advise that this decision be made by weighing contemporary 
cultural morals. They also clarify that the logo should be applied to 
single-track recordings when they are commercially released as well as 
to full albums.
    Second, we established a policy to include the Parental Advisory 
label not just on explicit sound recordings, but also in consumer print 
advertisements for these recordings.
    Third, we established uniform guidelines urging all of our on-line 
retail partners to prominently display the Parental Advisory Label for 
all labeled products from the catalog pages all the way through to the 
shopping basket.
    And in April of this year, in conjunction with the National 
Association of Recording Merchandisers (NARM), we announced the 
formation of a new marketing compliance task force to further improve 
the effectiveness of the industry's Parental Advisory Program. We met 
with officers from the marketing, advertising and legal departments 
from each of our individual member companies to help ensure that when 
they place consumer print ads they understand the guidelines and are 
properly implementing them.
    Public Education about our program will play a major part in our 
efforts over the next year as well.

Informational Systems Should Reflect the Nature of Their Respective 
        Industries
    Our labeling system is often inappropriately compared to the 
ratings systems in place for the television, motion picture and 
videogame industries. While our industries work together to bring 
information about our systems to parents through the 
www.parentalguide.org website, our systems are very different. And for 
good reason. Each system is designed and has evolved to reflect the 
media to which it applies.
    Books have no label or rating, even those that contain explicit 
content and are marketed directly to children. Why? Words are very 
subject to interpretation and imagination, and most feel that labeling 
books is a bad idea.
    Music consists of lyrics and composition, and we as an industry do 
label recordings that contain explicit content. As our guidelines 
suggest, context is obviously important: some words, phrases, sounds, 
or descriptions might be offensive to parents if spotlighted or 
emphasized, but might not offend if merely part of the background or 
not a meaningful part of the lyrics. The context of the artist 
performing the material, as well as the expectations of the artist's 
audience, is also important.
    Lyrics are often susceptible to varying interpretations. Words can 
have different meanings. Also, words cannot be viewed in isolation from 
the music that accompanies them. Lyrics when accompanied by loud and 
raucous music can be perceived differently than the same lyrics when 
accompanied by soft and soothing music.
    For example, I know of a work that has it all--sex, violence, 
adultery, murder, etc. It's Bizet's Carmen, an opera that is a favorite 
with musicians and the public alike. What would happen to this work 
under such a system?
    Even if classical works were to be set aside, song lyrics are by 
their nature impressionistic and are often used symbolically. While it 
is possible to measure the amount of pollutants in water or how much 
energy is needed to run an appliance, there is no universal criteria 
for categorizing words in lyrics or books.
    Unlike books and music, movies are audiovisual works which may 
leave less to the imagination, and as such have ratings systems which 
take age into account while still leaving to parents to make the 
decision about what is suitable for their children to watch.
    Finally, videogames, which are audiovisual and interactive, have 
added elements in their ratings system.
    Music is much closer to books than it is to movies or videogames in 
nature. While we have agreed to label when explicit content is 
contained in a sound recording, we do not have an age-based system. We 
do not prohibit the marketing of music to certain age groups. We do 
provide a well-known and commercially accepted logo to identify 
recordings that contain explicit material so that parents have a 
``heads-up'' in making purchasing decisions. We feel it is appropriate 
to warn parents that there may be objectionable material in an album or 
song but leave it to them to decide, based on their own values, what's 
appropriate for their children.
    So what does this mean? It simply means that we need a system that 
fits the entertainment. And I believe the parental advisory systems we 
have today for books, music, movies and video games reflect the nature 
of each industry.
Parents on the Parental Advisory Program
    And it is important for this body to know that parents already have 
weighed in on our parental advisory system. And overwhelmingly, they 
support it. In fact, according to the Federal Trade Commission, 75% of 
parents who are aware of the parental advisory program, support the 
recording industry's system.
    Parents understand that lyrics are subjective; they simply want a 
tool to help them identify that music which may have content that they 
may find objectionable. We provide them with that tool , and are 
currently engaged in educational efforts to make it even more 
ubiquitous.
    And at this point, I should add that despite the emphasis at these 
hearings on recordings with explicit content, they comprise a 
relatively small proportion of our industry's output and the themes and 
language contained in all of our music reflects different parts of 
today's society.
    In an average retail store with 110,000 titles, about 500 will 
carry the Parental Advisory logo. That's less than one-half of one 
percent of that store's total inventory. Let me repeat that again, it 
is less than one-half of one percent. And the major labels produce 
edited versions of nearly all recordings that carry the logo. Compare 
to that the fact that Country comprises 10% of our industry's product, 
and that Gospel and Contemporary Christian comprises 7%, and it helps 
to put this issue into perspective.
Federal Trade Commission Recommendations
    Of course, we would not all be here if everyone were happy with our 
current rating system. As you are well aware, the Federal Trade 
Commission in the past has been critical of it. It suggested that we 
focus our efforts in three areas.
    Specifically, the FTC recommended that the industry should:

1. Establish guidelines for advertising--we have
2. Increase compliance at retail--retailers make their own decisions, 
        and we support those decisions
3. Increase parental understanding of the label--70% of the people have 
        said that they are aware but we can always do more education. 
        And in fact, it on that last point that I wish to focus on.

Awareness Campaign
    Our industry is currently engaged in a campaign to do just that--
raise public awareness about our Parental Advisory program.
    One of the steps we have taken to that end is the launching of a 
campaign around a new Parental Advisory Labeling brochure, intended to 
educate parents, caregivers, PTAs, and other consumers about the 
program. This campaign will be centered on leaders within the 
educational community who are in a position to carry RIAA's message to 
both students and parents. The initial distribution will include 
parent-teacher organizations, school principals, coaches, music 
teachers, school guidance counselors, school psychologists and local 
and federal officials nationwide.
    We recognize, however, that we also need to have a presence where 
consumers purchase most of their music--retail stores. That is why we 
decide to update all countertop displays and store posters of the 
Parental Advisory Label with the web address for parentalguide.org.
    As you may know, this website is a one stop resource for parents to 
learn about the parental advisory program as well as the different 
rating systems for television, movies and video games. By adding this 
address, it points parents to a single resource about content whereas 
otherwise they may not have normally visited each individual site to 
learn about the different rating system for each industry.
    And lastly, I also want to mention that we have developed a Public 
Service Announcement in which music industry legend, Quincy Jones, 
appears. This PSA will be made available to not only television markets 
across the country but radio stations as well.
A Word of Caution, Consequences and Conclusion
    In summary, the recording industry has in place a system that 
works, one that reflects the nature of the industry, one that is 
overwhelming supported by America's parents and one that is being 
strengthened and promoted.
    Given these facts, I would caution you against allowing government 
intervention in the marketing of music. I know that some of your 
colleagues have introduced a measure that is identical to one that was 
introduced in the Senate by Senator Lieberman. The very nature of these 
proposals raise serious constitutional red flags. In fact, the Federal 
Trade Commission itself stated that they believed that ``because of 
First Amendment issues . . .  vigilant self-regulation is the best 
approach to ensuring that parents are provided with adequate 
information to guide their children's exposure to entertainment media 
with violent content.''
    And while I am sympathetic with parents who feel that their 
children are no longer under their moral control, this just isn't the 
case and these measures certainly aren't the cure.
    Young people who continue to need the guidance and leadership of 
adults in their lives. It is simply wrong to suggest that any 
government regulatory action can substitute for such involvement, 
particularly when it comes to art.
    This debate over music keeps coming back to the same thing. Despite 
all of the trappings and new ways to look at the issue, the fact is 
that some people just don't like the music. And that is a freedom of 
expression issue.
    Remember that the distinction between high art and the low road is 
deeply rooted in individual values and perspectives. For each person 
who believes rap lyrics portray a foreign world, there is another who 
finds them deep and powerful because that world is all too real.
    And above all, we must remember this: In our country, expression is 
not required to pass any test of validity, or even propriety, to be 
both permitted and protected.
    After all, the test of whether America allows free speech is not 
whether it grants freedom to those with whom we mildly disagree. It is 
whether we protect the freedom of those whose views--and language--make 
us apoplectic.
    I am proud that ours is a parental advisory program that not only 
respects one of our nation's most cherished freedoms but also empowers 
parents and has their support.
    Thank you.

    Mr. Upton. Mr. McMillon.

                   STATEMENT OF DOUG McMILLON

    Mr. McMillon. Thank you, Mr. Chairman. I will briefly 
summarize my statement.
    At Wal-Mart, we are a customer-driven company. Our 
customers are the primary force behind the decisions we make. 
We aspire to be an important part of our communities and to 
provide products and services that raise the standard of living 
for our customers. Consistent with that aspiration, Wal-Mart 
attempts to sell entertainment product in a way that allows our 
customers to make informed decisions and to exclude from our 
shelves merchandise that our customers find objectionable due 
to its sexually explicit or extremely violent nature.
    The challenges we face are in our ability to first help the 
customer understand what they are buying and, second, determine 
which products they find objectionable either before and in 
some cases after we have made it available for purchase.
    At times, this is harder than it sounds due to the 
subjective nature of some of these decisions. In the case of 
movies, we use the Motion Picture Association ratings. We do 
not carry NC-17 product. We do carry R-rated movies, which our 
buyer selects on a title-by-title basis. Our cashiers are 
prompted at their registers to verify the purchaser is 17 or 
older. We are involved in an ongoing training effort to ensure 
that all of our more than 120,000 cashiers execute our policy 
of age verification.
    In the case of video games and computer software, we use 
the ESRB ratings. We do not carry adult-only titles and we 
register prompt for age verification on M-rated titles.
    In addition to register prompting, we have also implemented 
in-store signing, print advertising and associate training to 
explain the ESRB rating system.
    In the case of music, we do not have a rating system to 
follow. We do not currently carry Parental Advisory stickered 
music. We do carry edited versions of some Parental Advisory 
music. We do not age restrict the sale of any music products. 
From our perspective, a standardized rating system for music 
would help our customers make a more informed purchasing 
decision.
    In conclusion, while we strive to use our best judgment on 
what we carry and work hard to restrict the sale of certain 
products to those under the age of 17, it is not possible to 
eliminate every image, word or topic that an individual might 
find objectionable.
    In addition, we are the first to admit that our systems and 
training, good as they are, are not infallible. We want our 
customers to make informed decisions and feel that we are 
handling entertainment product in an appropriate manner.
    [The prepared statement of Doug McMillon follows:]

Prepared Statement of Doug McMillon, Senior Vice President and General 
               Merchandise Manager, Wal-Mart Stores, Inc.

                              INTRODUCTION

    Mr. Chairman, members of the Subcommittee, I am Doug McMillon, 
Senior Vice President and General Merchandise Manager, for Wal-Mart 
Stores.
    At Wal-Mart, we have worked hard to create and protect our 
relationship with our customers. They are and always have been the 
guiding force behind our decisions. We have created stores that offer 
every day low prices, quality merchandise, and fast and friendly 
service. Our associates have also been involved with the individuals 
and families in our communities. Last year alone, we supported our 
communities with $190 million in charitable giving. Ninety-seven 
percent of that money was donated at the local level through our 
stores. We aspire to be an important part of our customers' communities 
and to provide products and services that raise the standard of living 
for the working families of America.
    Consistent with that aspiration, Wal-Mart attempts to sell 
entertainment product in a way that allows our customers to make 
informed decisions and to exclude from our shelves, merchandise that 
our customers find objectionable due to its sexually explicit or 
extremely violent nature. The challenge we face is in our ability to 1) 
help the customers understand what they are buying and 2) determine 
which products they find objectionable either before, and in some cases 
after, we have made it available for purchase. At times, this is harder 
than it sounds due to the subjective nature of some of these decisions.
    Any success we achieve in these efforts is accomplished, in large 
part, by following rating systems established by the entertainment 
industries.

                                 MOVIES

    In the case of movies, we use the MPAA, Motion Picture Association 
of America, voluntary ratings (G, PG, PG-13, R, and NC-17) as we make 
decisions about which movies to carry. For example, we do not carry NC-
17 rated content. We do carry G, PG, PG-13 and some R rated content. 
Our buyers for movies determine which R rated movies to carry based on 
their best judgment. They use their knowledge of our customers and the 
customer response to the movie in theaters to make a decision on a 
specific title. We then utilize a register prompt at our cash registers 
to verify the age of the customer buying the R rated movie. In 
accordance with our policy only those customers who are age 17 and 
above are permitted to purchase R rated movies.
    We believe that because MPAA ratings have been in consistent use 
since 1968, there now exists a widespread customer understanding of the 
ratings. As a result, we have few customer questions about the ratings 
themselves. Our customers seem to clearly understand what they are 
purchasing.

                   VIDEO GAMES AND COMPUTER SOFTWARE

    In the case of video games (for example, Sony Playstation or 
Nintendo games) and computer software, we use the ESRB, Entertainment 
Software Rating Board, ratings (EC, E, T, M, and AO) as we make 
decisions about which products to carry. We do not carry software rated 
adults only (as rated by the ESRB). As a rule, we do not carry Parental 
Advisory stickered product. We do carry EC, E, T, and select M titles. 
Our buyers for video games and computer software determine which M 
rated products to carry based on his or her best judgment. They use 
their knowledge of our customers to make decisions on specific titles. 
We then utilize a register prompt at our cash registers to verify the 
age of the customer buying the M rated product. In accordance with our 
policy only customers who are age 17 and above are permitted to 
purchase M rated titles.
    Since the ESRB has only been in existence since 1994, we sense that 
a large number of our customers do not clearly understand the ratings 
system. In addition to register prompting, we have taken several steps 
to educate our customers on how to interpret the ratings including in 
store signing; print advertising; and associate training. As a specific 
example, Wal-Mart stores display in store signing which explains the 
ESRB ratings. For video games and software, in store signing is placed 
in either the glass case or section where the item is stocked and 
explains the ESRB ratings to customers.

                                 MUSIC

    In the case of music, we do not have a ratings system to follow. 
The music labels determine on a title-by-title basis whether to attach 
a parental advisory sticker or not. We refer to this as stickered 
music. Today, we do not carry parental advisory stickered music.
    The music labels make edited versions of some stickered music 
available. We do carry edited versions of music on selected product. 
This product is labeled ``edited version.'' Our buyers for music 
determine which non-stickered and edited music to carry based on their 
best judgment. From our perspective, an unbiased, standardized ratings 
system would help our customers determine whether specific music is 
appropriate for their needs and tastes.
    We do not restrict the sale of any music products. If we were to 
make the decision to carry parental advisory music, we would most 
likely restrict the sale through a register prompt as we do with R 
rated movies and M rated video games.

                               CONCLUSION

    While we use our best judgment at Wal-Mart on which items we carry, 
and while we work hard to restrict the sale of certain products to 
those under the age of 17, it is simply not possible to eliminate every 
image, word or topic that an individual might find objectionable. In 
addition, we're the first to admit our systems and our associates, good 
as they are, are not infallible.
    However, it is our sincere hope that our policies make it possible 
for our customers to make informed decisions and for them to feel we 
are handling entertainment product in an appropriate manner.
    At this time I am pleased to answer any of your questions.

                                APPENDIX

MPAA (Motion Picture Association) Ratings
G (General Audience)--All ages admitted.
PG (Parental Guidance Suggested)--Some material may not be suitable for 
        children.
PG-13 (Parents Strongly Cautioned)--Some material may be inappropriate 
        for children under 13.
R (Restricted)--Under 17 requires accompanying parent or adult guardian
NC-17--No One 17 and Under Admitted.
ESRB (Entertainment Standards Ratings Board) Ratings
EC (Early Childhood)--content suitable for persons ages 3 and older
E (Everyone)--Content suitable for persons ages 6 and older
T (Teen)--Content suitable for persons ages 13 and older
M (Mature)--Content suitable for persons ages 17 and older
AO (Adults Only)--Content suitable only for adults

    Mr. Upton. Thank you. Ms. White.

                    STATEMENT OF DAPHNE WHITE

    Ms. White. Thank you. Thank you very much for inviting me 
here today. While some would call me an advocate, I am here 
today to speak as a mother. It is as a mother that I started 
the national grass roots organization called The Lion & Lamb 
Project to organize and support parents who want to tell the 
entertainment industry, as one of your colleagues did today, 
that enough is enough.
    I represent millions of parents and other concerned adults, 
teachers, grandparents, guidance counselors, psychologists, who 
want to tell the entertainment industry that the violent fare 
that they are serving our children on a minute-by-minute, 
hourly, daily, around-the-clock basis is not acceptable and 
must stop. Industry must do more to restrain themselves.
    It is important to understand that entertainment violence 
is neither innocuous nor harmless. In July of last year, 
representatives of six public health organizations presented a 
joint letter to Congress on this very topic. To quote from that 
statement, ``The conclusion of the public health community 
based on over 30 years of research is that viewing 
entertainment violence can lead to increases in aggressive 
attitudes, values and behavior, particularly in children.'' The 
groups who signed the statement included the American Medical 
Association, the American Academy of Pediatrics, the American 
Psychological Association and the American Academy of Child and 
Adolescent Psychiatry.
    So that last September when the FTC investigated the 
marketing of violence to children and found that these three 
industries represented here today were indeed target marketing 
adult level violence to children pervasively and aggressively, 
I was hoping that by now we would have had much better, 
meaningful and enforceable self-regulation by these industries.
    If I were to grade the three industry groups on their 
progress, I would give the music industry an F, the movie 
industry a D-minus, and the video game industry a D-plus. I 
expect better than Ds from my son and I expect better grades 
from entertainment industries that currently earn billions of 
dollars from parents nationwide.
    So what kind of progress has been made since September? 
What has the movie industry done since the FTC report was first 
issued? Well, they came up with a 12-step plan poetically 
stating that R-rated films would not be, ``inappropriately 
specifically marketed to children.'' Inappropriately 
specifically? That phrase alone would earn a D-minus in most 
high school writing classes. We found the movie industry's 12-
step plan so full of loopholes that any mom could drive a mini-
van right through it.
    So after the second set of Senate hearings, we sent a 
simple survey to all the studio heads who testified to try to 
get some clear answers to a variety of different things they 
obfuscated about during the hearing. So we asked simple 
questions like, ``Will movie theaters continue to air previews 
for R-rated movies before PG-rated features?'' some people said 
yes, some no. We couldn't tell who said what.
    ``Will movie theaters continue to advertise R-rated films 
on national television before 9 p.m.? Will movie studios 
continue to advertise R-rated movies on teen Internet sites?'' 
not a single studio bothered to answer a single one of these 
questions. They continued to assert that parents like and trust 
their rating system, but they refuse to deal with parents or 
answer any parents' concerns.
    By the way, I talked to hundreds and thousands of parents 
every year during workshops and I have yet to meet a one who is 
as satisfied with the survey as Mr. Valenti says they are.
    So let me say, I asked these questions 10 months ago and 
have not received any answers yet, and I would be very happy to 
receive some answers today.
    What about the video game industry? They have also refused 
to share these guidelines that we just heard about and were 
quoted in the FTC report. And as a parents group, we wanted to 
know, ``Okay. Sounds like great guidelines. What are they?'' 
the industry refused to give those to us. We had to file a FOIA 
request with FTC. And we did get one of those letters from the 
IDSA, but the Entertainment Software Review Board, which had 
some other guidelines that were quoted in the report, has so 
far been fighting our FOIA request and we have not got it.
    So the question is, where are the teeth in these so-called 
industry self-regulations? What specific guidelines have they 
adopted? How can parents be more involved in the process?
    About the music industry, I won't say much beyond what my 
Russian grandmother would have said. It is hard to translate in 
English. But basically, ``Their total refusal to reform their 
marketing system,'' is what she would have said, ``is beneath 
contempt.''
    Let me say a few words about the First Amendment. I am a 
mom, not a First Amendment lawyer. But we have heard that the 
First Amendment prohibits us from placing any restrictions 
whatsoever on the marketing of violence toward children.
    Let me just quote Supreme Court Justice Potter Stewart, who 
said, ``You are all confused about what you have a right to do 
under the Constitution and the right thing to do.'' That is two 
different things.
    So I ask you to broaden your thinking about the First 
Amendment and the protection that should be accorded our 
children. This is not an open and shut case. I would 
specifically request that the Congress consider holding a 
separate set of hearings specifically on First Amendment issues 
and how they impact on this case so a real debate can take 
place. Right now, I fear the First Amendment is being used by 
industry as the first and best tool to close debate rather than 
to open debate, and that is a real problem. I do think self-
regulation would be a good idea if it happens. But if the 
industries continue to fail to adopt sufficient, enforceable 
transparent standards, I ask the subcommittee to consider 
putting teeth behind the FTC recommendations.
    What will it take to make these companies behave 
responsibly? I hope it does not take another Columbine or 
another 13-year-old shooting a teacher or another 8-year-old 
shooting a classmate. It might take some self-restraint on the 
part of industry. As a last recourse, it might eventually take 
some legislation.
    I implore you as Members of Congress on behalf of all the 
parents and concerned adults in your districts and throughout 
this country to do your part to stop this blatant marketing of 
violence to children.
    Thank you very much.
    [The prepared statement of Daphne White follows:]

Prepared Statement of Daphne White, Executive Director, The Lion & Lamb 
                                Project

    My name is Daphne White and I am Executive Director of The Lion & 
Lamb Project, a national grassroots parents' initiative founded in 
1995. The mission of The Lion & Lamb Project is to stop the marketing 
of violence to children. We do this by helping parents, industry and 
government officials recognize that violence is not child's play--and 
by galvanizing concerned adults to take action.
    I am speaking to you today as a mother of a 13-year-old boy, and as 
a former journalist who spent 20 years writing about education and 
family issues. I became concerned about media violence when my son was 
two years old, and I noticed that violence was being marketed even to 
toddlers. I left journalism and became an activist when I learned that 
violent media images have been shown to have lasting negative effects 
on the attitude and behavior of children, and especially young children 
under the age of 8.
    I am here representing millions of parents who want to tell the 
entertainment industry what that news anchorman shouted in the movie 
Network: ``I'm mad as hell and I'm not going to take it anymore!'' We 
are here today to examine the entertainment industry's efforts to curb 
children's exposure to violent content, and specifically their efforts 
at reform since the Federal Trade Commission (FTC) report came out in 
September 2001.
    In its September report, the FTC found that the video game, movie 
and music industries were indeed marketing adult-level violence to 
children in a ``pervasive and aggressive'' way.
    Some of the specific findings were indeed shocking--but perhaps 
they were more ``shocking'' to the innocent industry executives than to 
the weary parents of young children, who had been on the receiving end 
of these marketing tactics for years. The FTC found, among other 
things, that children as young as nine years old were being used in 
focus groups to test R-rated movies; that internal marketing plans for 
R-rated movies and M-rated video games admitted that teens were the 
real audience for these adult-rated products; and that R-rated movies 
were being advertised directly to children in camps and at Boys and 
Girls Clubs.
    I am sure the industry representatives assembled here today will 
tell you that all these practices have now stopped, that violence is no 
longer marketed to children, and that government need do nothing else 
to protect America's children. Nothing could be further from the truth! 
As a parent, I can tell you that our children are still exposed to 
violent ``entertainment'' every single day.
    It is important to understand that ``entertainment'' violence is 
neither innocuous nor harmless. On July 26, 2000, representatives of 
six public health organizations presented a Joint Letter to the 
Congress on this very topic.
    ``The conclusion of the public health community, based on over 30 
years of research, is that viewing entertainment violence can lead to 
increases in aggressive attitudes, values and behavior, particularly in 
children,'' according the statement. It was signed by the American 
Medical Association, the American Academy of Pediatrics, the American 
Psychological Association, the American Academy of Child & Adolescent 
Psychiatry, the American Psychiatric Association and the American 
Academy of Family Physicians.
    If any of you work with the scientific community, you know how hard 
it is to get six organizations to agree to anything. While the 
entertainment industry pays its own consultants to debunk this 
research, I want to make it clear that the scientific consensus is 
clear: numerous studies ``point overwhelmingly to a causal connection 
between media violence and aggressive behavior in some children,'' 
according to the public health groups.
    In fact, while most of the long-term research focused on television 
violence--which is a passive viewing of violence--preliminary studies 
indicate that the negative impact of video game interactive violence 
may be ``significantly more severe than that wrought by television, 
movies or music,'' according to the Joint Statement.
    Because of the public health implications of this issue, the Senate 
asked the FTC for a follow-up report, released in April, to assess how 
much progress had been made by industry since September. In that second 
report, the FTC did find that ``some'' progress had been made by the 
movie and video game industry--none by the music industry--but that 
much remained to be done. As a parent's organization, we would agree 
with that assessment.
    If I were to give the three industry groups a grade, I would give 
the music industry an ``F,'' the movie industry a ``D minus'' and the 
video game industry a ``D plus.'' The FTC did say that the video game 
industry has done ``more'' than the other industries, and that their 
ratings system are ``better''--but since the other two industries are 
getting lousy grades, ``better'' than lousy is still far from good. I 
expect better than ``D's'' from my son, and I expect better grades from 
``entertainment'' industries that currently earn billions of dollars 
from parents nationwide.
    Am I just a tough grader? I don't think so. I believe these grades 
reflect reality--the reality parents live with every day. I travel 
across the country frequently, offering parenting workshops dealing 
with the issue of media violence. I have been to towns as remote as 
Sitka, Alaska and Chautauqua, New York--everywhere I travel, parents 
are concerned about the level of violence that is marketed to ever-
younger children.
    Let me give you some examples of the types of marketing that is 
still taking place today, 10 months after the original Federal Trade 
Commission report came out. Let's start with the video game industry, 
as this industry claims to have done the best job in reforming its 
practices:
    Here is a recent Toys R Us circular--Toys R Us, let us remember, is 
a toy store. It sells toys to children. But here is an ad showing a 
young boy surrounded by Game Boys--the platform geared most 
specifically to children--and a variety of video games. This looks like 
a child-friendly page, and features an array of 14 games including 
Donkey Kong, Frogger and Scooby Do. (These games are all rated ``E'' 
for Everyone by the industry ratings group, the Entertainment Software 
Review Board or ESRB.)
    But a closer looks shows that snuck in among the many children's 
games rated ``E'' on this page are two very adult games: Perfect Dark 
and Conker's Bad Fur Day, both rated ``M'' for mature. Children, as 
well as their parents, will likely conclude that all the games on this 
page of Toys R Us are appropriate for youth.
    They would be wrong, of course. Here is one section from a New York 
Times review of Perfect Dark: ``Swarms of deadly enemies must be 
eliminated . . . shooting accurately at bad guys takes enormous amounts 
of practice . . . Practice pays off . . . and yes, blood splatters the 
walls and floors behind and beneath enemies on the receiving end of 
your arsenal.''
    Perfect Dark is a Nintendo game that looks and feels like an older 
game called Goldeneye. The James Bond-based Goldeneye--one of the most 
violent first-person shooter games I have ever seen--was somehow rated 
``T'' for Teen, and was very popular with teens. While Perfect Dark is 
now rated ``M'' for Mature, placing an ad for this game in the midst of 
kids' titles is clearly an effort to target market this adult game to 
children.
    Conker's Bad Fur Day is also rated ``M'' for Mature. According to 
Nintendo, this risque, game is purely an entry for adults. So why are 
they advertising the game in a Toys R Us catalogue? And why is this 
game about a ``hung-over, foulmouthed squirrel'' (in the words of the 
Village Voice) coming out in an ``E''-rated version for the Game Boy??
    Oni is another violent video game--rated ``T'' for Teen--that often 
finds its way onto the E-rated pages of Toys R Us. Here is how one New 
York Times reviewer described this game: First, he complained that when 
playing many other first-person shooter games--such as the adult-rated 
Quake III Arena, he ``barely felt a thing'' when ``shooting a fellow in 
the back with a rocket.''
    ``With Oni,'' he raved, ``I'm involved. It's hard not to be 
involved when you can hear your enemy's neck snap.'' And how is this 
Play Station 2 game rated? Oni is rated ``T,'' for teenagers! Look for 
it at your local Toys R Us, between Conker the hung-over squirrel and 
Reader Rabbit, which just happens to be a child-friendly educational 
video game.
    These are just some examples of the marketing of violent video 
games to children. The industry trade association--the Interactive 
Digital Software Association--has so far refused to adopt the three 
very reasonable and modest recommendations for reform proposed in the 
September FTC report. As a result, the April follow-up FTC report found 
that most video game companies are still advertising adult-rated video 
games in magazines with a large under-17 audience.
    We agree with the FTC finding that the video industry can do much 
more than it is now doing to stop the marketing of violence to 
children. Bit I also agree with IDSA President Doug Lowenstien on one 
point. In his address to the annual industry trade show E3--the 
Electronic Entertainment Expo--Mr. Lowenstein noted how video games are 
now ubiquitous in the home, the internet, the wireless world, in cars 
and vans, on airplanes, in military settings . . . and even in schools.
    He described an interactive video game that is now being used in 
Willard Model Elementary School in Norfolk, VA. ``It's just a matter of 
time before more and more games will be used as teaching tools,'' Mr. 
Lowenstein said. I agree that video games can and are used as teaching 
tools. The question, Mr. Lowenstein, is what kinds of lesson will video 
games are teaching our children in the future.
    Will the technology of video games continue to teach children to 
feel satisfaction in snapping necks, running over pedestrians, blowing 
policemen to pieces, and eviscerating people . . . or will the game 
technology be used to teach values that most American parents will feel 
comfortable with?
    Now let's turn to the movie industry. Again, ``some'' progress has 
been made--but not nearly enough. This industry has also refused to 
accept the threshold recommendations for reform proposed in the FTC 
report.
    True, R-rated previews--``appropriate for all audiences''--are no 
longer shown before G-rated matinees. But previews for R-rated features 
are still shown before PG-13 features, which are largely aimed at 
teens. And studios are still advertising R-rated movies during 
television programs most popular with teens.
    Finally, the movie and television industries are still airing R-
rated movies such as Scream during a time when many children are 
watching. In the case of Scream and Scream 2, which aired in January 
2001, that time was 8 p.m. And just to make sure kids knew about this 
televised movie, Fox advertised the film during the after-school 
cartoon programs, when the greatest number of children are watching 
television.
    I won't go even begin to talk about how inappropriate the current 
movie rating system is--and how much violence is considered 
``appropriate'' for PG-13, PG and even G-rated movies. But I can tell 
you that many parents are appalled at the scenes they see, with their 
children, when they take them to movies that the industry assures them 
are ``appropriate'' for children.
    The FTC recommends that each of the industries should ``establish 
or expand codes that prohibit target marketing to children and impose 
sanctions for violations.'' What has the movie industry done? They came 
up with a 12-step plan that poetically states that R-rated films will 
not be ``inappropriately specifically'' targeted to children. 
Inappropriately specifically? That phrase alone would earn a D minus in 
most high school writing classes.
    We found the movie industry's 12-step plan so full of loopholes any 
mother could drive a mini-van through it. So after the second set of 
Senate hearings--where each of the seven studio heads appeared to 
commit to slightly different ``specific and inappropriate'' reforms--we 
sent a simple, 14-question survey to all the studio heads who had 
testified.
    As a parent group, we wanted to understand a few simple facts, such 
as:

 Will movie theaters continue to air previews for R-rated 
        movies before PG-rated features?
 Will movie theaters advertise R-rated films on national 
        television before 9 p.m.?
 Will movie theaters advertise R-rated movies on teen internet 
        sites?
 Does the effort to ``not inappropriately specifically target 
        children'' mean a stop to the practice of licensing children's 
        products such as toys, toy guns, action figures, fast-food 
        promotions and other products based on R-rated movies?
    Not a single studio bothered to answer a single one of these 
questions. The Motion Picture Association of America assures parents 
that their rating system and their 12-step program are there for the 
sole purpose of helping parents make wise choices. But in truth, when a 
parents' group such as ours asks for information, the movie industry 
can't come up with even a ``yes'' or ``no'' answer to simple questions.
    Instead of answers, we received a letter from the MPAA with the 
same vague 12-step program attached, along with the confusing Senate 
testimony that had already been presented. Let me just say that even 
though that questionnaire was mailed out 10 months ago, I would still 
be happy to receive simple ``yes'' or ``no'' answers today.
    Let me add that IDSA has been equally uncooperative in answering 
our questions. In its April report--which IDSA claims it passed with 
flying colors--the FTC mentioned some new marketing and advertising 
policies the video game industry has adopted. When we requested those 
policies from the IDSA, our phone calls were not returned. We had to 
file a Freedom of Information request with the FTC to get the 
information. We eventually received that information, after paying a 
fee to the FTC.
    The ESRB, meanwhile--the fabled ratings board that boasts its 
system is superior to all others--is fighting our request to the bitter 
end. As a parents' group we would like to know: where are the teeth?? 
What specific guidelines have video game companies adapted to stop the 
marketing of violence to children? And what sanctions do companies face 
if they don't comply with these voluntary guidelines?
    As a parents' group, we believe this information should be public. 
If the video game industry is really so proud of its voluntary self-
enforcement system, they should be eager to display that system to 
parents and other concerned adults. Show us your voluntary system, and 
how you will enforce it. That way, parents will have more confidence in 
your industry.
    To date, I am sorry to report that we have seen nothing from the 
ESRB. Our FOIA request is still pending, four months after the April 
FTC report was issued.
    I won't say much about the music industry beyond what my Russian 
grandmother would have said: their total and unequivocal refusal to 
reform their marketing system is ``beneath contempt.'' Like the movie 
and video game industry, the music industry likes to hide behind the 
fig leaf of the First Amendment.
    But as Justice Potter Stewart once said, ``You are all confused 
about what you have a right to do under the Constitution and the right 
thing to do.''
    I am a mother, not a constitutional lawyer. But I would like to 
quote former Federal Communications Commission chair Newton Minow who 
wrote ``It would surely come as a surprise to those who wrote the First 
Amendment to see that Americans now cite it not to begin discussion of 
the public interest, but as a reason to close it.''
    Let's get real here: these three industries are not really in 
business of protecting the First Amendment. They are in the business of 
promoting their members' bottom line. But at what cost? I am here to 
tell you, as a mother, that this cost involves our children's lives.
    To quote Newton Minow again, ``The First Amendment is considered a 
`preferred freedom'--one that, when balanced against other rights, gets 
the benefit of the doubt--but it is not an absolute freedom. It cannot 
be exercised at the expense of other constitutional rights or, in 
narrowly defined categories, contrary to public safety or well-being.''
    The First Amendment was designed for political speech--until very 
recently, commercial speech was not accorded nearly the same rights as 
political speech. Likewise, the First Amendment has allowed for the 
protection of children--for example, it is no longer legal to advertise 
alcohol, or cigarettes, or pornography to children. Corporations can no 
longer argue that the restriction in the marketing of those products 
has rung a death knell for the First Amendment.
    I ask you today, as the Representatives of parents across the 
country, to broaden your thinking about the First Amendment, and the 
protection that should be accorded children under this Amendment.
    I also urge you to consider holding a separate set of congressional 
hearings on these First Amendment issues, so a real debate about this 
amendment can take place. Right now, I'm afraid, the First Amendment is 
being used by industry as the first and best tool to censor debate.
    In conclusion, I would like to as the members of this subcommittee 
to consider follow-up actions to this oversight hearing. All manner of 
violence is still being marketed to children, as I have demonstrated 
today. The First Amendment is not an excuse to do nothing--it is a 
challenge to do more to protect the freedom of parents and children 
alike. Freedom to live in a peaceful, nonviolent, and civil society.
    I also ask the three industries represented here today to clean up 
their marketing practices toward children, voluntarily adopt the FTC 
recommendations, and set up stringent, transparent and enforceable 
self-regulatory provisions to stop the types of marketing efforts 
discussed here.
    If the industries fail to adopt these standards voluntarily, I ask 
this subcommittee to consider putting legislative teeth behind the FTC 
recommendations.
    America's parents--America's children--deserve better marketing, 
and better entertainment, than we are getting. Parents should not be 
forced by these media companies to become policemen and women in their 
our homes--to constantly say ``no!'' to our children when it comes to 
movies and music and video games.
    The type of ubiquitous, never-ending marketing of violence to 
children must stop. Violence is not child's play. We have enough public 
health research now to know the potential damage that can occur. What 
will it take to make these companies behave responsibly?
    I hope it does not take another Columbine, or another 13-year-old 
shooting a teacher, or another 8-year-old shooting a classmate. It 
might take some self-restraint on the part of industry. It might take 
some legislation. I implore you as members of Congress, on behalf of 
all the parents and concerned adults in your districts and throughout 
this country, to do your part to stop this blatant marketing of 
violence to our children.
    Thank you.

    Mr. Upton. Thank you. Thank all of you. At this point, we 
will be doing questions and alternate between sides of the 
aisle in 5-minute segments.
    Ms. Rosen, based on--listening to your testimony, tell me 
if I am correct, is the industry even considering a harsher or 
stronger label for some of its recordings than what is there 
today?
    Ms. Rosen. What do you mean a harsher label?
    Mr. Upton. I think you know some of the tunes that some of 
us have heard here. And as you look at whether it be TV or 
movie, they break it down into more than just a general 
warning. Might be violence on the TV. There might be nudity. 
There might be strong language. There are a number of tools 
that a parent can have--I don't think anybody up here is 
talking about taking away the First Amendment right. But as 
parents, we want better tools to figure out what our kids are 
listening to. And at least this member has seen a number of the 
labels. The labels are all the same. They don't differentiate, 
as the movie industry and some of the others have done in terms 
of trying to break it down in terms of what might be 
objectionable for a young person.
    Ms. Rosen. It is a fair question, Mr. Chairman. And in 
fact, because the Parental Advisory label is overly broad, we 
think it can offer more protection, not less protection. The 
fact is that it is extraordinarily difficult to characterize 
what a label may mean, and so that the fact that the label has 
more of a general implication than it is an explicit lyric, 
that we think that we are erring on the side of caution.
    Mr. Upton. I know as a dad with a 13-year-old daughter and 
a 9-year-old son, I know the difference between what is PG and 
an R and everything else in terms of what might be there and 
what my kids can watch, and they do, too.
    Ms. Rosen. Well, the issue of PG and R goes to the age-
based appropriateness.
    Mr. Upton. When you look at the V-chip, something that I 
supported and a number of other members of this panel did, 
too--and I have a V-chip on my TV--I know that when certain 
shows are on, it does break them down in terms of the type of 
objectionable material, if they choose, might decide to block.
    And when you talk about a song that talks about raping your 
mother or slitting her throat with all those types of sounds 
that are on there, I am just asking you whether or not maybe 
you might want a stronger label than a simple advisory that 
could account for a whole bunch of stuff.
    Is it under consideration that you might look at a varying 
degree of label so that a parent, if they choose, could use 
that as a tool in terms of what their kids listen to?
    Ms. Rosen. No. It is not under consideration. We think the 
label itself speaks----
    Mr. Upton. So this is it. This is your label. And at this 
point, you are not looking at any stronger label at all?
    Ms. Rosen. If the question is, are we looking to change our 
labeling or rating system for different kinds of labels or to 
create an age appropriate----
    Mr. Upton. Not necessarily age appropriate. Again, I have 
got a 9-year-old son. And what he listens to at 9 is going to 
be a lot different than what he listens to at 18 and 25. And he 
is cognizant, too, of the different stuff that he hears.
    Ms. Rosen. The Parental Advisory label is an overly broad 
and helpful tool because it says everywhere we publicize it, it 
is a notice to parents that recordings identified by this logo 
may contain strong language, depictions of violence, sex or 
substance abuse and parental discretion is advised. So we err 
on the caution of overbroad rather than try and interpret 
lyrics for anybody.
    Mr. Upton. I want to show you a cover of a CD that was 
purchased this last weekend at Best Buy. And on this label, you 
have got--your warning was there, but it was covered up so that 
a parent could have easily--or son or daughter could have 
gone--and underneath the price sticker, there is the label. It 
is put up precisely over where that label was.
    Do you have--is there any code--I know that the regulations 
that are out, you want that advisory sticker on the permanent 
packaging for the particular CD. But what about the retailer 
that has a label that precisely fits right over that, so that 
when you buy it--and obviously, you don't take that plastic 
wrap off before you take it to the cash register--there is no 
clue that it might have an advisory rating on it. Do you have 
any comment on that?
    Ms. Rosen. Well, I don't represent the retailers, but I am 
sure that the Retailers Association would agree that is an 
irresponsible act on the part of the retailer to cover the 
label. That is one of the reasons, though, to make sure there 
was broad awareness for whenever a album was labeled, that we 
would include it in all advertising; that we would make sure if 
that was bought via Internet information, that it was clearly 
labeled on Internet sites. It is very important that people be 
able to know when they are looking at promotions or advertising 
for labeled product that that is a labeled product. There are 
other places in that store where the Parental Advisory label 
exists.
    Mr. Upton. Would the industry support at least an advisory 
letter to the particular retailer, in this case, Best Buy, that 
this is not good practice, putting the price sticker over the 
warning label?
    Ms. Rosen. Sure, but I think probably showing it is Best 
Buy's already listeners.
    Mr. Upton. My 5 minutes has gone too quickly. Mr. Sawyer.
    Mr. Sawyer. I yield back, Mr. Chairman.
    Mr. Upton. Ms. Harman.
    Ms. Harman. This is hard stuff, Mr. Chairman. And my friend 
Hilary Rosen is going to get the brunt of this this morning--
she knows this--but she is a hardy soul.
    Clearly it is wrong to have a record price tag block the 
warning. I think everybody knows that. And it is irresponsible 
and I will say it. I don't represent the retailers or the 
wholesalers or the recording industry either. It is absolutely 
totally irresponsible of anybody to cover over these labels 
which are intended to give some guidance to parents.
    Maybe it is a related question, but I think we all have our 
parent hats on and you are a parent, too. You have very young 
kids, but just wait till they go to stores by themselves. This 
warning label is broad. And my kids are sophisticated and they 
say, ``Well, gee, mom. It is a broad label and it is on 
everything. And don't you trust me to make my own judgments 
about what content is reasonable or not? You have to trust me. 
If you just censor me totally, I will not grow up to be a 
responsible person with values.'' Now it is easier for me in 
the movie case because I can say, ``My friend Jack Valenti has 
taken care to tell me it is an R or PG-13. And I can see that 
and I tell you no R movies unless we review it first.''
    It is harder in the record case. What guidance should I 
give my 16 and 18-year-olds when they make this case to me that 
this overbroad label is denying them their age appropriate 
responsibility to make their responsible choices?
    Ms. Rosen. It is a very good question, Congresswoman. And I 
think, though--I have a lot of friends who will not let their 
children buy or listen to stickered records. I think that is an 
appropriate choice for them to make. It is quite clear, though, 
when you get to 16 it is awfully tough. As a parent, I 
anticipate it. As a godparent, I already see it.
    There are messages--and by the way, over 70 percent of all 
music is bought by people over the age of 18. So this is not an 
issue about children.
    But teenagers are tough. They hear about tough issues from 
a lot of different places. And I think that the best thing we 
can do is hope that a parent who decides to let their teenager 
listen to or buy labeled recordings will help that teenager put 
that music in context. And if it is a popular artist, the 
teenager's music choices can say a lot about what is going on 
in that kid's life right now.
    Music has historically for teenagers expressed emotion and 
served as an outlet for their feelings. I personally as a 
parent think that, you know, that can be a gift. If I know 
where--what kind of music a teenager is attracted to, I am 
going to get more of a signal about what is going through their 
own life, but I think it is a parent's responsibility to 
determine whether a 16-year-old is mature enough or not mature 
enough. And many 16-year-olds have a lot of maturity and a lot 
of sophistication. They may have been well-traveled and have a 
lot of contact with adults. And others may be younger 
emotionally. And I think that is a parent's decision to make.
    Ms. Harman. I appreciate that answer, and I can't wait to 
tune in about 12 years from now when you are going through this 
with your kids. It is unbelievably hard to do. And, you know, I 
come back to my magic pill. I wish there were a magic pill. 
There is no magic pill. I certainly know that we can't 
legislate the answers, but I also worry that normal, nonperfect 
parenting skills may not be enough either.
    Thank you very much, Mr. Chairman.
    Mr. Upton. I recognize for 5 minutes the chairman of the 
full committee, Mr. Tauzin.
    Chairman Tauzin. Thank you, Mr. Chairman. Jack, my old 
buddy, take us back in history. How were movies rated before 
the current rating system?
    Mr. Valenti. Say that again.
    Chairman Tauzin. Take us back in history. How were movies 
rated when I was a kid coming up?
    Mr. Valenti. When I took over this job, it was in the 
Mesazoic era.
    Mr. Upton. Turn the mike on.
    Mr. Valenti. I thought I could lift my voice to meet you, 
Mr. Chairman.
    There was in existence then the infamous Hayes Code. That 
came in the 1930's.
    Chairman Tauzin. Is that the one where you had to have your 
foot on the floor?
    Mr. Valenti. That is right. If a man and a woman were in 
bed, even if they were married and they wanted to become 
affectionate, each of them had to have a leg on the floor, 
which means you had to be Nadia Comeneci in order to deal with 
that.
    Chairman Tauzin. What I want to know is, what were the 
rating systems. I remember movies were rated X.
    Mr. Valenti. They didn't have a ratings system. You had to 
get a seal of approval. If you got no seal of approval, you 
could not get a play date. Why? Because the studios owned all 
the theaters.
    If you are looking for a villain, the Department of Justice 
in 1950, under the antitrust laws, forced the dissolution of 
the ownership of theaters and studios and with that the whole 
Hayes Code began to collapse.
    Chairman Tauzin. In those days, I remember movies were 
rated X. When did that happen? I remember X-rated movies.
    Mr. Valenti. That came in with the rating system in 1968.
    Chairman Tauzin. We couldn't go look at those.
    Mr. Valenti. X meant under 17 couldn't get in the theater. 
That name was changed because it was taken over by the 
pornographers. And we changed it to NC-17, which is very 
difficult to exploit.
    Chairman Tauzin. What I am trying to get at, though, the 
movies started out from a position much where Ms. Rosen and the 
recording industry is today, that there were just one category 
of movies that you were going to say was genuinely not 
available to young people. And then we went through a process 
where parents, basically, as Ms. Harman pointed out, were 
looking for a little differentiation.
    I remember when we went to Peoria, that was a message we 
got, a message you got, the cable industry got. You remember 
that meeting. Parents basically said, ``Look, we appreciate you 
giving us the general rating. We'd like a little more 
specificity about what those movies contain so we can make some 
differentiated choices for our family viewing and our movie 
choices.'' And you responded. You did that. You listened. 
Government didn't tell you you had to do it, although there was 
some pressure in the Senate with some bills floating around. 
But you and the rest of the industry basically said, ``Okay. 
Parents want a few more tools, a little more information, some 
differentiated ratings and some information about why we chose 
a particular rating. We are going to give them that, because we 
want to be responsible and we want parents to have as many 
different tools to manage the entertainment for their children 
and their lives as we can.'' And frankly, you ought to be 
credited for that. You got burned over in the Senate and at the 
FTC for a charge that you are, however, still marketing 
material to youngsters that was inappropriate for them. And you 
took 12 important steps since then to correct that. And I 
commend you for that.
    But the reason I wanted to take you through that was 
because I think the recording industry is kind of where you 
used to be.
    And I want to turn now to Ms. Rosen. The recording industry 
has taken a position--you have enunciated it quite well today--
you think parents are happy with one general rating that says, 
``This material is explicit enough so that you might want to--
if you want to, you know, say to your children, `Don't buy that 
stuff. I will not let you buy that or entertain yourself with 
it.' '' That was the position the motion picture industry took 
way back then, and they moved from that to a differentiated 
system of advisories to parents and to the public.
    If we had another meeting in Peoria and the recording 
industry executives and your association were invited to come 
and listen to parents, you don't believe parents would want a 
little more information about how violent, how explicit some of 
this material is compared to some that is perhaps less violent, 
perhaps mildly violent or mildly explicit as compared to 
excessively violent with sounds of people getting their throats 
cut and chain saws buzzing and blood and guts on the ground? 
You don't think parents would ask the same thing of your 
industry that they asked of the motion picture industry?
    Ms. Rosen. Well, they certainly might, because I think we 
would all like easier choices than the one we have. And it is a 
clever analogy that you are making, but I think it is not going 
to be exactly on point, Mr. Chairman, because what ended up 
happening with the motion picture ratings--and my friend Jack 
will correct me if I am wrong--is that they went through a 
process where they said, ``If you have this kind of nudity 
combined with this kind of language and if you have these 
depictions combined with that kind of profanity, it will get 
this rating and that rating.'' Essentially in the visual 
picture, you have the ability to make those gradations that you 
don't in music. And I understand the comment that if you have a 
song like, you know, Eminem, that it should be easy. But the 
fact is that even Eminem presents gradations and others as 
well.
    Chairman Tauzin. Let me ask you----
    Ms. Rosen. I think the answer is----
    Chairman Tauzin. Could you not differentiate between 
excessively explicit, violent and otherwise material and 
mildly, excessively and--I mean what I am asking is, would it 
not be possible to make some division of that warning so that 
there is a stronger warning for the kind of stuff that I think 
you are going to hear a little bit more about in today's 
hearing that gets the same warning as a mildly explicit form of 
recording?
    And I have limited time, so I want to ask you a second 
question and let you answer both. And if that would be 
possible, wouldn't parents, in your opinion, probably ask for 
that and appreciate it? And second, are you using the same 
general label for music and for music videos?
    Ms. Rosen. Yes.
    Chairman Tauzin. The answer is yes, you are. So that music 
is combined with videos today. And there are video depictions, 
just like movies and just like video games, that could be 
explicit and could be excessively violent or what have you?
    Ms. Rosen. It really does not come up in videos, because 
videos are produced for showing on television, and so there are 
hardly any videos that get rated like that. So it is really not 
an issue with video.
    Chairman Tauzin. But you use the same rating systems for 
sounds and the video is my point. Answer the first question. 
Couldn't there be a rational distinction between the most 
outrageous stuff and the mildly outrageous or perhaps 
objectionable stuff to some parents?
    Ms. Rosen. I think the answer is theoretically no. There 
can't be, because it is very easy to say as a general matter 
what would that be. But I assure you when you get down to 
specifics, it is not that neat.
    Chairman Tauzin. That is the answer that the Motion Picture 
Academy first gave us way back then.
    Ms. Rosen. I don't think so.
    Chairman Tauzin. That is correct. We just had a general 
label for a long time. And then they listened to the voices of 
America. And what the voices of America basically heard in 
Peoria was that, ``Look, you do better than that. You can break 
this down a little better for us so we can be better advised 
for our children's sake.'' And the Motion Picture Academy 
responded. And I think the criticism you are going to get and 
what you got from the FTC is that maybe it is possible and 
maybe you ought to give it a good look.
    Ms. Rosen. Let me just say one thing, anticipating both 
your own views and the questions of many other people. I have 
the sense that people think this is out of some sort of liberal 
defiance or commercial defiance that the record industry 
doesn't want to go there. And I assure you that is not the 
case, that this is a genuine and thoughtful sense of principle 
about the meaning of lyrics, the meaning of music.
    Tori Amos' song ``Me and a Gun'' is about the depiction of 
her rape. In my mind, and maybe as a woman, that is about the 
most violent thing I can imagine.
    Profanity in Eminem talking about the same thing doesn't 
make that more violent. It makes it maybe more distasteful. It 
makes it crasser and more obnoxious. It makes it something that 
we do not maybe respect as much, but it doesn't necessarily 
make it more violent.
    Chairman Tauzin. I will leave you with this one thought, 
though. I admit to you that there is a social value in adults 
learning about the horrors of rape--certainly men understanding 
more what women have to go through when they are subjected to 
something as awful as that. But we carefully give parents 
information about visual depictions and that sort of thing for 
the sake of their children. And I think before this hearing is 
over and before this issue is complete, I think you may want to 
reassess that position. I think you may want to think about a 
system that differentiates between the most graphic and the 
most explicit as opposed to that which is mildly explicit or 
mildly graphic.
    I yield back the balance.
    Mr. Upton. The gentleman's time has expired. Ms. McCarthy.
    Ms. McCarthy. Thank you, Mr. Chairman. And this is to Mr. 
Peeler. There is legislation both in the House and Senate now 
to give you, the FTC, the ability to go after the entertainment 
industry if it markets its products to children, products that 
are adult-oriented. I know you are aware of it. I wonder if you 
would share your thoughts with us today about how you make such 
legislation constitutional, and if it is law, would it risk the 
entire rating system altogether?
    Mr. Peeler. In response, I have to say this is an issue 
that all five of the Federal Trade Commissioners are involved 
in on a personal basis and have really given a lot of thought 
to. They have not yet had the opportunity to review the 
legislation that you are talking about. And in our most recent 
report in April, 2000, the Commissioners did say that they 
believed that the best answer here would be self-regulation, 
and that our report, that will be coming out in the fall, 
should give the Congress a good indication of how far self-
regulation has gone in the area.
    Ms. McCarthy. So you might advise us before we act on the 
legislation to await that fall report?
    Mr. Peeler. If we had a request, we would absolutely 
respond to it.
    Ms. McCarthy. I have not reviewed the legislation either, 
but I do intend to. I look forward to your fall report and to 
more input from all segments of the industry on how we might 
make improvements. I still have grave reservations about 
trampling on peoples' rights, but I am open to your report and 
your suggestions and more input from the industry on this 
important matter.
    I thank you and I yield back.
    Mr. Stearns [presiding]. I thank the gentlelady. I am going 
to ask unanimous consent that the FTC's September 2000 and 
April 2001 report on media violence be made part of the record. 
I accept it. So ordered.
    [The information referred to is retained in subcommittee 
files.]
    Mr. Stearns. Mr. Peeler, when will the third report come 
out? You said the fall. I am just wondering when in particular 
it is going to come.
    Mr. Peeler. We are in the process of getting information 
right now and going out into the field with studies. So we are 
hoping to have it in the mid-fall. But I can't give you a good 
target date right now until we see how much we have got and 
what it takes to go through it. When we have that, we will 
certainly get back to the committee.
    Mr. Stearns. In the September 2000 report, you identified 
55 explicit content recordings and found that all of them were 
marketed to children under 17. And then you encouraged the 
music industry to cease such marketing efforts and to adopt an 
industry-wide anti-targeting code; is that correct?
    Mr. Peeler. Yes. That is correct.
    Mr. Stearns. And how did you advise them to do this?
    Mr. Peeler. We did it in the report that we released to 
Congress and the White House.
    Mr. Stearns. So you did not contact them; you just issued 
the report and hoped that that would be influential?
    Mr. Peeler. We have had discussions with all of the 
industries that were involved in the report.
    Mr. Stearns. You further note--and I have here that shortly 
before the report's release, the Recording Industry Association 
announced ``Advertising for explicit content and labeling 
recordings should not appear in publications, web sites or 
other commercial outlets whose primary,'' that is 50 percent or 
more, ``market demographics is 16 years of age or younger.'' So 
the recording industry anticipated this and came up with an 
attempt for explicit content labeling. But then immediately 
after the report is released, as I understand it, the recording 
industry withdrew its anti-targeting recommendations. Is that 
what you understand, Mr. Peeler?
    Mr. Peeler. That is our understanding. And to go back to 
that, I think one of the fundamental recommendations that the 
Commission made, as you indicated, was that that type of 
targeting and promotion should stop even when you look at--Ms. 
Rosen made the point today--that their label, unlike other 
labels, is not specifically age-related. But when you look at 
our parents' surveys, even among the parents who know about the 
system and approve of it, about 55 percent of them think it is 
an age-related system. That may represent some confusion on the 
parents' part, but it is certainly the parents take away.
    So we continue to think that those limitations are 
important.
    Mr. Stearns. So after your report went ahead, the recording 
industry decided to develop and then they withdrew their anti-
targeting recommendations. So my question to you is, Ms. Rosen, 
why, after Mr. Peeler and the Federal Trade Commission 
recommended it and you went ahead and established 
recommendations, why did you withdraw your recommendations and 
what was the basis for it? And is the recording industry still 
targeting to the demographics of 16 years old and younger?
    Ms. Rosen. Well, as a practical matter, the criticisms 
about so-called targeting of music based on----
    Mr. Stearns. No. The question is, they made a 
recommendation and you agreed to comply and then you suddenly 
decided not to comply, and the question is why.
    Ms. Rosen. There are edited versions of music available for 
sale that do not require the Parental Advisory, although Wal-
Mart sells them in their store. And since this system was not 
age-based, it was determined that that was not a workable 
analysis because it is not an age-based system and it doesn't 
take into account edited versions.
    Mr. Stearns. Are you still targeting to 16 years old and 
younger?
    Ms. Rosen. Targeting what?
    Mr. Stearns. Well, let me ask Mr. Peeler. You indicated 
that the recording industry is targeting demographics of 16 
years of age or younger individuals?
    Mr. Peeler. In our September survey, we looked at marketing 
plans and we found specific statements, for example, ``target 
audience, hip-hop, crossover, pop male-female, 14 to 34,'' ``12 
to 34,'' ``13 to 35'' and statements like that about who the 
target was. In our April report, our review indicated that the 
product, while we didn't seek the marketing plans, our report 
indicated that the products were being marketed in essentially 
the same way.
    Mr. Stearns. So you recommended in September. They came up 
and said they were going to change their advertising procedure. 
Then they withdrew their plan. April, you went back and 
confirmed they are still targeting.
    Mr. Peeler. They still appear to be targeting.
    Mr. Stearns. Do you agree with the Federal Trade 
Commission's analysis--yes or no--that you are targeting to 16 
years old and under with this type of music? Just yes or no.
    Ms. Rosen. The answer is no, because every single one of 
these recordings were available in edited form, and the FTC has 
never acknowledged that.
    Mr. Stearns. Mr. Peeler, she does not agree with your 
report in September. She does not agree with your report in 
April. Can you explain why you are right and she is wrong?
    Mr. Peeler. Well, again, the recommendation is that each of 
the industries adopt a code saying that they will not market 
rated products.
    Mr. Stearns. But you are indicating that the recording 
industry is still targeting these children?
    Mr. Peeler. Based on the information we saw in the April 
report.
    Mr. Stearns. So, one, they are still targeting; two, they 
have no intention to change their advertising; and, three, they 
disagree with you and that is where we stand?
    Mr. Peeler. In the one area of disagreement on the clean 
versions, our information is that most of the sales of these 
products are still of the rated version, not the clean version.
    Mr. Stearns. What about her comment that she is editing 
versions and things like that?
    Mr. Peeler. Well, again, editing--having clean versions of 
these products is clearly something to be commended. The 
question is, in the advertising, are they marketing the clean 
version or the rated version and the advertising doesn't really 
make a distinction between these two. And again, the evidence 
we have seen is that most of the sales are of the unedited 
version.
    Mr. Stearns. My time has expired, but to conclude, Mr. 
Peeler, you are saying that it is still, in your opinion, that 
they are targeting minors with this material that is either 
edited or unedited.
    Mr. Peeler. That is what we saw in our April report.
    Mr. Stearns. Thank you, Mr. Peeler.
    Mr. Stupak.
    Mr. Stupak. Thank you, Mr. Chairman. We have up here--
someone put up here the Pocket Guide Entertainment Ratings. 
There are two sides to it here--both sides. So I took a look at 
it to see if we could find anything in common here amongst all 
these rating systems. One side, we go to movies. Probably the 
number I could pick out the best is 13, because that is PG-13. 
You have your rating and then PG-13, there is two parts.
    And then you go over to video games. And they do not have 
any PG-13. They have T for teen, which says, ``Content suitable 
for those 13 and older.'' Then you flip over to the other side 
and we take a look at games on the Internet. And they have a TI 
for teen interactive, content suitable for ages 13 and older.
    And then go to coin-operated video games. There are green, 
yellow, red. That is about all they have there.
    And then music, we have the Parental Advisory explicit 
content. And if you ask, you can ask about the lyrics. Why is 
it necessary for everybody to have their own separate system of 
rating? Why can't it all be the same? Why can't it just be PG-
13? Why can't it be suitable for PG-13 for music, all the way 
down the line? Why does it have to be different? So when a 
consumer goes to buy something, as they will for the holiday 
season, I am sure, if they forgot their little handy-dandy 
Pocket Entertainment Rating card at home after they sat there 
and tried to figure it out, they would be more confused. Why 
can't you all do it the same?
    Mr. Lowenstein. I will a quick shot. I think in a perfect 
world having a single rating for everything is clearly more 
manageable for everybody. I am a parent and I would agree if 
you could do it.
    I think the concern that we have as an industry are in 
several issues. One is while--in fact, all content is not the 
same. For example, movies are visual. As Hilary has said, music 
is a very different experience as to how it is absorbed. It is 
audio and so forth. Video games are visual and interactive. And 
all those things result in some different experiences in terms 
of the content, in terms of how they look and how they feel.
    More importantly, one of the concerns that I have with the 
proposed legislation is that it seems to me to squarely put the 
Government into the ratings business because----
    Mr. Stupak. We are not telling you to rate it. We are 
telling you to label it the same. If it is going to be PG-13 
for the movies, be PG-13 for the recording industry, for the 
video games, whatever they might be. I do not think that is 
rating. We will let you do your ratings. You have come up with 
these numbers. PG-13, that is the rating system used here. What 
we are saying is, when I go and look at a box or cassette, I 
can look in the same spot--or if I am going to buy this movie--
I can look in the same spot, have the same rating, have some 
understanding of what I am purchasing before I purchase it. I 
do not think we need a perfect world to be able to do that, do 
you? Mr. Lowenstein. No. We do not need a perfect world. But I 
will say this in addition, I do not accept the premise, for 
example, that if you go into a store and you pick up a video 
game that is rated mature for violence, blood and gore, that it 
is particularly difficult to understand what that means and 
that that is not sufficient information to allow a parent to 
make an informed decision, particularly when you add to that 
that the packaging itself is quite descriptive as to the 
content of the game.
    So I think in our case, the existing system is quite 
descriptive. And again, all the research from the FTC across 
the board would suggest it is pretty easy to understand and 
desirable.
    Mr. Stupak. Well, I am sure you are all going to protect 
your own rating system. But do you not think it is a little 
ridiculous to try to figure this out when we have to go to try 
to buy something? Why do we have to have our own little fiefdom 
of commercial to target people? Why can't you just all use the 
same? If we are dealing with video or music or movies, it is 
all your senses, whether it is visual, audio or whatever. It is 
the makeup of the individual to draw from that form of art and 
take what they want from it. I do not think we need all this.
    Let me ask one more question before my time. Ms. Rosen, in 
your statement you said that music should be distinguished from 
video products because lyrics are more subjective. While loud 
music or tone may exacerbate the imagery created by a curse 
word or an explicit violent depiction, these lyrics would not 
be stripped of their harmful tone by soft music or soothing 
background. In my opinion, this would be like saying that a 
brutal depiction of a stabbing would be less disturbing in a 
movie if it occurred on a nice grassy pasture as opposed to a 
crowded city street with rats. How do you justify that 
distinction?
    Ms. Rosen. Look at Johnny Cash singing about ``Folsom 
Prison Blues'' and his experience. Look at Garth Brooks talking 
about domestic violence, or Dixie Chicks' ``Good-bye Earl,'' 
which depicts a woman murdering her husband. That is country 
music and people receive it differently. Look at Carmen or, you 
know, Tosca. It is certainly the case. ``Killing Me Softly'' by 
Roberta Flack is viewed differently. ``I Shot the Sheriff'' by 
Eric Clapton is viewed differently. So, of course, the context 
matters. Of course, the intensity matters. And, of course, the 
genre matters. And if we are all honest with each other, we 
know what bothers people the most is hip-hop music and its 
profanity.
    So what we try to do is recognize that reality in the world 
and label that.
    But if we had a rating system that suggested that ``Killing 
Me Softly'' by Roberta Flack should be rated for violence, I 
think we would all agree that that is really inappropriate and 
overwhelmingly suggestive.
    Mr. Stupak. Do you believe that ``Killing Me Softly'' by 
Roberta Flack, that song, is different than some rapper who is 
actually having gunfire going off in the back as he is singing? 
Do you think that there is a different degree there or the same 
degree?
    Ms. Rosen. Extraordinarily different, because I think that 
there is a lot of hip-hop music that is actually anti-violent 
using violent references to get their message across. It 
requires a level of----
    Mr. Stupak. So the music in the background that is being 
played certainly gives a different meaning to the words, to the 
lyrics. How is that any different than the movie where you have 
it, a killing on a subtle place as opposed to a graphic crowded 
city street I used.
    Ms. Rosen. Because in a movie, you can determine whether 
somebody is joking or whether they are serious. You can 
determine whether somebody is angry or whether they are happy. 
You can----
    Mr. Stupak. You also can determine that from music, can't 
you?
    Ms. Rosen. Not necessarily.
    Mr. Stupak. You don't think so?
    Ms. Rosen. Eminem is consistently misinterpreted, according 
to him. So I don't think you can say it is always easy, and I 
appreciate that you don't agree with that. It is just that, you 
know, that is how creators view this.
    Mr. Stupak. Thank you, Mr. Chairman.
    Mr. Stearns. I would say to my colleagues, we are going to 
have a second round, so I hope they will stay. The gentlelady 
from Wyoming, Ms. Cubin.
    Mrs. Cubin. Thank you, Mr. Chairman. Would the staff please 
give to Ms. Rosen the document I just gave them. I would ask 
you to read the highlighted part out loud.
    Ms. Rosen. Ms. Cubin has given me lyrics to an Eminem song 
and asking me to read them out loud, which I don't really want 
to do, and so I'm not going to.
    Mrs. Cubin. I can understand that. Pardon me? You are not 
going to do it?
    Ms. Rosen. No.
    Mrs. Cubin. And that is exactly what I expected. If what 
you are supporting today is so bad that you can't speak it out 
loud, and yet you can't tell the difference between that and 
Roberta Flack's ``Killing Me Softly,'' or ``I Shot the 
Sheriff,'' then there is something wrong with your thought 
process, ma'am.
    Ms. Rosen. It is a very good question, and I respect what 
you are saying. But I think the fact is that this record is 
stickered. It is not.
    Mrs. Cubin. This record is what?
    Ms. Rosen. This record has a logo on it. There's no reason 
to defend the lyrics because they are going to mean different 
things to different people.
    Mrs. Cubin. I think it's profoundly----
    Ms. Rosen. And so nobody is trying to fool anybody.
    Mrs. Cubin. Nobody is trying to fool anybody by 
differentiating between the song, for example. I have the song 
here that you talked about the lady who was raped. And I will 
read this part. I will read these lyrics. They are not 
pleasant. They are not comfortable. But they aren't so bad that 
a decent human being isn't embarrassed to read them in public. 
And I am going to tell you, I thought about--I didn't want to 
embarrass you. I thought about not sending those lyrics down 
there for you to read. But then I thought, if people don't know 
what we are really talking about, it is easy for you to 
sanitize the system that you have. That is so vile and so 
disgusting, what I just handed to you.
    This song, I will enter the lyrics for the record. And I 
will have those lyrics entered in the record to prove that 
there is a distinction, and it is a huge distinction, and you 
could easily--you could easily separate that kind of stuff from 
``I Shot the Sheriff,'' from ``Killing Me Softly'' if you had 
the desire to do so. I realize that you represent the 
entertainers that make their living from their music. I realize 
that. And I realize you are conflicted by that because they all 
go through your trade organization. But some of the things that 
you said--let me find my notes here; that there are gradations 
in movies that there are not in song, I think those lyrics that 
you refuse to read very clearly show that there are gradations 
in music just the same, and that they could be--that they could 
be broken down into, at the very least, extreme violent and 
sexual content, and then what you have now. I think--I know you 
could do that.
    Ms. Rosen. Well, I appreciate what you said, Ms. Cubin, but 
as a practical matter, the sticker as it exists, the parental 
advisory logo is already overly broad. It makes clear that 
these lyrics are explicit.
    Mrs. Cubin. I think that is the problem. That is what I am 
saying to you. That is the problem. It is overly broad. I, as a 
parent, I, as a parent, my children are now 24 and 28 and so, 
well, I am lying about that. They couldn't be that old. I don't 
know what got me there for a minute. They usually say they are 
about 10 years younger, and it is easier for me.
    And as has been stated before, I agree with Ms. Harman. 
Parents have to be the ones on the front line. We have to be 
the ones that make those determinations for our kids. But there 
is such a big difference between a 12-year-old hearing those 
kind of lyrics that, again, you refuse to read, and hearing 
lyrics ``I Shot the Sheriff.'' I mean, common sense would 
dictate that.
    Ms. Rosen. Which is why ``I Shot the Sheriff'' is not 
labeled.
    Mrs. Cubin. Well, then the song that you were talking 
about, the lady who had been raped.
    Ms. Rosen. Also was not labeled.
    Mrs. Cubin. When there is sexual content--now, don't try to 
go there. Don't try to say that because I presented you with 
something so disgusting you couldn't read it, that all of the 
music that is marked like that is that extreme. It isn't. And 
that is the problem. We can't differentiate as parents until 
after we buy the music how bad it is. And we would like to be 
able to differentiate how bad it is before we have to buy the 
music by having more levels.
    My time is out, but I don't have any desire to force that 
upon the industry, but I can tell you that the force is large 
and that the pressure is large and that if the industry doesn't 
try to accommodate parents in some way this way, then it will 
happen.
    Mr. Stearns. The time of the gentlelady has expired. The 
gentleman from Nebraska, Mr. Terry, is recognized for 5 
minutes.
    Mr. Terry. Thank you. I appreciate that, Mr. Chairman. I 
mentioned earlier in my opening statement that I had to excuse 
myself because I was speaking to three groups of 40 of Boy 
Scouts that are in the area for a jamboree. But I did my own 
little poll, by the way, and as scientific as I can do. Out of 
each one of these groups, you know, 100, 120 Boy Scouts, 
various ages, how many had the Eminem CD. And it was amazing to 
me, out of this group, how many raised their hands. I would say 
about a good third of each one of the groups. Well, maybe not a 
third. About 20 percent of each one of the groups raised their 
hands.
    My next question was to the cadre of scoutmasters, parents, 
surrounding these kids. How many of you, as parents, were with 
them when they purchased it and have listened to it? One. And I 
think that really begs the question of the discussion here 
today as we want the warnings on here to warn the parents that 
there is something graphic, explicit in here that may not be 
appropriate for children of certain ages. So the discussion--if 
we can agree to that, that perhaps maybe a 10- or 11- or 12-
year-old shouldn't be listening to Eminem. I'm not sure anyone 
under 17 should be listening to some of these lyrics. The issue 
then becomes, you know, how do we get the message to the 
parents, or what responsibility should there be on the store 
owners, like Wal-Mart?
    We had a staff member of this committee that went out and 
observed kids buying whatever at Best Buy, just went to kind of 
observe. There are absolutely no restrictions. Young kids 
obviously 13-, 14-years-old, buying material with parental 
warnings on it, without parents there, without a blink of the 
eye.
    So I want to ask Mr. Peeler and Ms. Rosen, where do we go? 
If we have a generic general warning of explicit labels, could 
we draw the line at a certain age and just say for you to be 
able to buy this, you need your parents warning? Or you need 
your parents here to purchase it? Would that be acceptable to 
place that type of restriction on a retailer? Would it be 
legal? Constitutional, I mean.
    Mr. Peeler. Well, I think you have two industries here. The 
electronic games industry and the motion picture industry have, 
on a self-regulatory basis----
    Mr. Stearns. Mr. Peeler, do you have your speaker on? Yes. 
I guess you do.
    Mr. Peeler. Yes. I hope so. As I was saying, you have two 
industries here, the electronic game industry and the motion 
picture industry that have been, on a self-regulatory basis, 
working with retailers and working with theater owners, trying 
to implement exactly that type of system. And that is probably 
the best approach.
    Mr. Terry. All right. Ms. Rosen, let me just point out the 
other observation of my very scientific survey. It was the 
range in ages in these Boy Scouts. Because some of these scouts 
are 14, 15, 16. There are others that were, you know, that were 
pretty young, 10, 11, 12 range. But they had the CD and they 
are listening to it.
    Are there any statistics out there, not on marketing, but 
on purchases of--that we would break down specifically in the 
age group? For example, this last Eminem, are there any 
statistics out there, Ms. Rosen or Mr. Peeler, that say X 
number or X percentage are believed to have been purchased by 
boys, girls, in the 12 to 16 ages range? Is there any way--is 
there anything out there, or is there any way to do it, to get 
that information?
    Ms. Rosen. No, not really on an album basis, unless the 
retailers were to keep track of that information. And I am not 
aware of any retailers that do. But, you know, over 70 percent 
of music is purchased by people over the age of 18. And I think 
that you know, it is--you can't help but notice when you make 
that--have that discussion in a group of Boy Scouts that they 
are actually in the Boy Scouts; that they are actually learning 
a set of values.
    There are exterior influences in context by which children 
and teenagers learn. And I think that somehow suggesting that 
if a teenager that doesn't get an Eminem CD, he is not going to 
know about profanity or about violence, because there is no 
other place they are going to learn about it, isn't realistic. 
What's more realistic is to know that there are parents and 
organizations and other places, you know, that are going to 
give people the messages and the context and the ability to 
absorb, you know, difficult subjects.
    Mr. Terry. All right. Well, let us--my last question, well, 
my time is up. So--my last question, specifically, Mr. Peeler, 
and to Ms. Rosen again, at least give us more information on 
the labels as a parent. Is there--could we have a warning on 
here that perhaps makes--says there are 147 uses of explicit 
language and 47 reference to violent acts on this CD? Can we 
break it down into something like that? What's wrong with 
giving that level of information?
    Ms. Rosen. I think in theory, nothing is wrong with giving 
it. The question is creating it, that what we try and do to let 
people know what explicit means. It means strong language or 
depictions of violence or sex or substance abuse. But different 
sentences may mean all three of those things or four of those 
things and other sentences may not. And I think there has just 
been numerous attempts to try and categorize this with a finer-
toothed comb and it is just too difficult to do. It is not 
practical. It doesn't--it is not true to the lyric.
    Mr. Stearns. The gentleman's time has expired. The 
gentleman from Oklahoma is recognized, Mr. Largent.
    Mr. Largent. Thank you, Mr. Chairman. We have heard almost 
everybody on the panel and up here talk about how it is the 
parents' responsibility; they are on the front line. They are 
the ones that are responsible for passing on the values. We all 
agree with that. But I want to speak up as a parent, not as a 
Member of Congress right now, and just tell you a little bit 
about what I feel like as a parent.
    You know, I tried to teach my kids not to smoke. And we all 
know that tobacco companies definitely marketed tobacco to 
young people under the age of 18 in the State of Oklahoma. And 
I taught my kids that, too. I never smoked. My wife never 
smoked. We, you know, did all that we could. But as a parent 
now, what happened, I have a daughter who did smoke. How did 
she get cigarettes? Through vending machines that were outside 
of a restaurant. So I tried to do the right thing in teaching 
my kids about not to smoke. But here a vending machine--all she 
had to have is the necessary quarters to put in the machine to 
get the cigarettes, and she was doing that.
    I don't know how I could have prevented that or anticipated 
that. I try to build into my kids, you know, the right values 
in regards to the movies that they watch. We get a subscription 
as a parent called Movie Guide that gives a--that does exactly 
what Mr. Terry said. Here's how many times profanities are used 
or obscenities and acts of violence and rates it for parents. 
We leave that out for our kids to review movies.
    And so they go to movies and we find out that the theaters 
will allow them to go into movies, even when they are rated R. 
They let them go in without checking any sort of 
identification. Blockbuster, you can go to Blockbuster and rent 
R rated movies, you don't have to show any ID for that. Then 
you find out, even the movie theaters that say no, you are not 
18, you can't go in. Well, the kid goes in a PG 13 and then 
jumps from that theater over to the R rated movie when the 
parents aren't looking or the theater owners aren't looking.
    So what do you do as a parent to protect your kids? You 
say--talk about pornography. I mean, this is a real cancer that 
is eating at our entire society. You say, well, parents should 
be the ones that guard what their kids are watching on 
television and cable and the Internet. But then you find out 
that the statistics say that 80 percent of our kids are first 
exposed to pornography at school or at the library, places that 
you would also think would be helping parents out to protect 
our kids. So when we say, you know, parents should be on the 
front line, that is absolutely right. But I want to tell you 
that--Jack, you talked about raising three kids yourself. Being 
a parent today is not like being a parent 20 years ago. It is a 
whole different ball game. A friend of mine told me just, when 
we went over to vote, that in an avalanche every snowflake 
claims innocence. Parents are facing an avalanche today, an 
assault on all the values that we want to pass on to our kids. 
Those values are under attack by the entertainment industry and 
many other avenues.
    Ms. Rosen, I have got to tell you that when I heard your 
testimony, the one word that came to my mind was shameless. I 
thought your testimony was shameless. I think some of the 
things that you--you couldn't even read the lyrics to the song, 
to a song that is shameless, that has zero redeeming value for 
our society. Zero. In fact, it is negative. And for you to give 
testimony to defend that is shameless to me. And I don't 
understand it.
    My question is, Mr. Tauzin raised a question. He said you 
also produced movie videos and that they had the same rating 
and you said yes. But we don't have a problem with the movie 
video, the music videos. Why is there not a problem with your 
music videos that are played on TV, and there is a problem with 
the stuff that you put on CDs? Why is there a difference? Why 
is there a higher level for what you produce for television 
versus what you produce to be sold at retail stores?
    Ms. Rosen. Well, obviously, artists are in control of their 
own vision and--but there are standards that have--that the FCC 
has, or that MTV has for playing videos, and it is relatively 
common for videos to meet that standard. And what artists do is 
create a true vision, and when that true vision is explicit or 
outrageous or potentially offensive, they put a sticker on it. 
They don't try and hide the fact that some people will find it 
objectionable. It is labeled. And some times, in most cases, 
there is an edited version of that music available. Wal-Mart 
won't sell labeled products. They will only sell the edited 
version.
    Mr. Largent. Let me ask you a question. Does the recording 
industry find it outrageous that the FCC has a higher standard 
than you have to meet with the CD that you sell at your retail 
store? Do you find it censoring that you have to meet a higher 
standard to produce a music video than to produce a CD? Does 
that violate your First Amendment rights to free speech?
    Ms. Rosen. Well, I think that the artists----
    Mr. Largent. Does it alter the artists vision that they 
have?
    Ms. Rosen. Well it may, but music actually starts with the 
music, and the video tends for a secondary interpretation of 
it.
    Mr. Largent. But still an artist's expression that is being 
edited, you do not find that offensive?
    Ms. Rosen. I think that artists are entitled to put their 
true vision in a recording. And so that if there are certain 
compromises that they have to make to get commercial 
recognition on MTV or sold to Wal-Mart, some of them are 
willing to make that and some of them are not, and we will 
support artists either way with that decision.
    But I think you just heard Mr. McMillon say that you know 
they would rather there be a rating system. So this is not a 
commercial decision on the part of the music community. The 
decision is based on a sense of principle and, you know, I 
understand that people don't agree. But it is one based on 
principle.
    Mr. Largent. Well, we could sit here and have a pretty 
eloquent argument about whether it is a marketing decision or 
whether it is an artistic expression. And I would tell you that 
I believe that it is purely a marketing decision that is being 
made by the companies that are producing this. Maybe not by the 
artist, but by the people that are producing this; that are, 
you know, stamping out the CDs. It is a marketing decision. It 
sells. Let me see. I had some other questions.
    Ms. Rosen, I had one other question for you.
    Mr. Stearns. The gentleman's time has expired.
    Mr. Largent. If I could ask unanimous consent 1 minute and 
one more question.
    Mr. Stearns. So ordered.
    Mr. Largent. And that is that you said in your testimony 
that words are subject to interpretation, which is why we don't 
put labels on books, just like we should not have labels that 
are age-specific on CDs. Can you tell us any names of any books 
that are being--inappropriate books that are being marketed to 
children today?
    Ms. Rosen. Well, you have to define ``inappropriate.'' I 
can't make a decision about what is inappropriate. I am just 
going to make--my point is that books are not labeled. You 
know, the final scene in Harry Potter--I don't want to ruin it 
for anybody who hasn't read it, but it is a murder scene. I 
mean, there is--you know, I won't let my kids watch Bambi 
because, you know, the mommy gets killed. There are things that 
young people are exposed to all over the place that your 
natural sensibility wouldn't go to saying is inappropriate 
because it doesn't have an angry beat or it doesn't have the 
profanity that some of the music does.
    So I think it is clearly true, Congressman, that there is a 
different standard that we accept, and we accept our 
responsibility. We put labels on it. I am--what I am simply 
saying is that to go to a more graded kind of level, with 
further interpretation is difficult and with that--in that 
regard, I urge you to consider books as the best analogy.
    Mr. Largent. But again, my point is--and I will close with 
this, Mr. Chairman, is first of all, in your testimony, you 
said that inappropriate books that are being marketed to 
children are not labeled.
    Ms. Rosen. I didn't say that. I said----
    Mr. Largent. Well, we can go back and listen to the 
testimony. That is what you said. I wrote it down when you said 
it.
    Ms. Rosen. Well, if I said that, that is not what I meant 
and that is not what my testimony says.
    Mr. Largent. Second of all, the point I would say that your 
industry is also making a decision to basically edit what they 
are doing in terms of what they produce on TV versus what they 
stamp out on a CD. So you guys are already doing what you are 
saying you are opposed to doing by the production of your music 
videos. And with that, Mr. Chairman, I yield back my time.
    Mr. Stearns. The gentleman's time has expired. If my 
colleagues want to stay around, we can continue. We have a very 
important discussion here, and so we will start another round 
here.
    Ms. Rosen, you said that you would not let your daughter 
look at the movie Bambi. Is that what you just said to us?
    Ms. Rosen. I did.
    Mr. Stearns. And why won't you let her look at the movie 
Bambi?
    Ms. Rosen. Because I find it too sad.
    Mr. Stearns. Because the mother gets killed, I think.
    Ms. Rosen. Yeah.
    Mr. Stearns. Yeah, okay.
    Ms. Rosen. That is my value.
    Mr. Stearns. Okay. That is your value. Would you let your 
young children go to Best Buy and buy ``Kill You,'' by Eminem?
    Ms. Rosen. No.
    Mr. Stearns. And why won't you let them do that?
    Ms. Rosen. Because that is my value.
    Mr. Stearns. Is your value, you think, so different than 
most mothers?
    Ms. Rosen. I really don't know. You know, I am a mom in a 
minivan and I disagree with everything Ms. White said, so I am 
willing to acknowledge that different people view different 
things differently.
    Mr. Stearns. Let me ask you this. Do you think the tobacco 
companies should be prohibited from marketing to children, to 
teenagers?
    Ms. Rosen. I don't really have an opinion one way or 
another about tobacco, Congressman. But I will tell you that 
art is different than tobacco.
    Mr. Stearns. No, but as a mother now, would you think it is 
okay for the tobacco companies to market to teenagers, tobacco? 
Just yes or no.
    Ms. Rosen. As a mother, I think it is my responsibility to 
instill, as Jack says, the moral shield in my children to 
resist all sorts of temptations that I believe are unhealthy 
for them.
    Mr. Stearns. So you think it is okay then to market to 
children tobacco. That is what you are saying.
    Ms. Rosen. I didn't say that.
    Mr. Stearns. Okay. Just yes or no, is it wrong or right in 
your opinion?
    Ms. Rosen. I don't know enough about it. I don't have a 
view.
    Mr. Stearns. Okay. But the FTC has said categorically that 
your industry is marketing, targeting 16-year-old people, 
children and under, and yet, you will not let your daughter 
listen--look at the movie Bambi. So I find it--the chairman, 
Mr. Tauzin, indicated to Mr. Valenti what the system for 
talking about films back there was, an X, and it was very 
simple. And what you have here, as he has indicated, is very 
simple, and you might have to move a generation forward. And I 
think that is what the chairman is trying to indicate to you.
    Now, you don't seem to agree. But I think from your own 
personal testimony, I would say to you that your industry 
should consider what we are suggesting here is that we might 
need something like the Federal Trade Commission. And then 
second, more importantly, that I think you are going to have to 
address the idea that Mr. Peeler said, that you are still 
targeting to the 16-year-old individuals or younger.
    Ms. Rosen. May I respond to that?
    Mr. Stearns. Oh, sure. Go ahead.
    Ms. Rosen. As I said before, with as much respect as I 
have, the fundamental premise of the FTCs accusation is 
incorrect. We do not create an age-based system here. So we are 
not determining what is appropriate for any age. So I--you 
know, it is my great----
    Mr. Stearns. But you just said that you would not let--how 
old are your children?
    Ms. Rosen. Two-and-a-half.
    Mr. Stearns. Okay. But if you had an 8-year-old, you said 
to me you would not let that child go to the store and bring 
home ``Kill You'' by Eminem. That is what you told me.
    Ms. Rosen. I think still not at 8.
    Mr. Stearns. Well, okay. But your industry has been 
targeting, the Federal Trade Commission says, whose 
responsibility it is, to people who are 16 years or older.
    Now Ms. White, I am going to come to you. You indicate in 
your testimony that you have written questions to the Motion 
Picture Association, and I have got the 12--I have got seven in 
front of me. While I talk to Mr. Valenti, could you come up 
with two of the questions that you would like answers this 
morning, and I will ask them for you and we will see if we can 
get an answer.
    Ms. White. I appreciate that.
    Mr. Stearns. Because, you know, that's what my job is, to 
let the poor constituent have the power of me.
    Mr. Peeler, when you issued your report in September and 
also in April, there was no response, and then they started to 
respond and then they didn't, the motion picture--the record 
industry. But the Motion Picture Association did indeed 
respond; isn't that correct? And Mr. Valenti has indicated they 
went ahead and responded. And I guess the question is, to Mr. 
Valenti, when you came up with these new guidelines, as a 
result of the report, you believed and agreed with the Federal 
Trade Commission. Is that the assumption that you said that you 
thought they were right and you wanted to correct that matter?
    Mr. Valenti. I believe that there were certain marketing 
practices that were revealed in this report by our member 
companies that I found indefensible, yes.
    Mr. Stearns. So you found them indefensible, and you did 
something about it.
    Mr. Valenti. Well, we put out our 12-point set of 
initiatives to try to rectify what I thought was some chasms 
that existed in the marketing plan to some of the companies. 
And I must say that I had 100 percent cooperation from these 
member companies, and they all agreed to these initiatives, 
which they are now complying with.
    Mr. Stearns. Has your industry witnessed any marked effect 
from the new marketing practice it has adopted since September?
    Mr. Valenti. I have heard from the companies that they 
have; that it is costing them money in their marketing 
practices now that--I do not know the extent of it. But it has 
been written in the press as well.
    Mr. Stearns. Okay. Ms. White, my time has expired, but I 
want to give you the opportunity to ask Mr. Valenti two 
questions that you feel are very important.
    Ms. White. Okay. Thank you. I appreciate that.
    Mr. Stearns. And we'd like Mr. Valenti to give a yes or no, 
if you could.
    Mr. Valenti. I will answer any questions anybody wants to 
ask.
    Mr. Stearns. Okay.
    Ms. White. Thank you.
    Mr. Stearns. Put the mike right close to you, Ms. White. 
Thank you.
    Ms. White. The first question that I get asked a lot by 
parents is about previews. Will the movie industry agree to 
show age appropriate previews at a movie, so if a child and a 
parent go to see a G-rated movie, they will only see a preview 
for a G-rated movie? If they go to see a PG 13 movie, they will 
only see previews for PG 13, et cetera. That's question number 
1. Is that part of your 12-point plan?
    Mr. Valenti. If you read our 12-point set of initiatives we 
say plainly and clearly that we do not intend to have R-rated 
movies in a trailer in a theater playing a G-rated movie. That 
is what the initiative says. A number of our companies have 
extended that. That is on their own initiative one step higher 
on PG movies.
    Mr. Stearns. Aren't you talking about previews?
    Ms. White. I am talking about all levels. He has so far 
said that their plan says they will not show R-rated previews 
before G-rated movies, which used to happen, by the way when my 
son was young, and we took him to G-rated movies. We are very 
concerned parents. We work really hard at it. He would see 
previews rated appropriate for all audiences pre-viewing the 
worst, the most violent and the most sexual scenes of upcoming 
R-rated movies. So, so far the industry has agreed to not to 
show that kind of extreme, an R-rated preview before the G-
rated movie.
    However, a lot of R-rated movies are aimed at teens and if 
they continue to show R-rated previews to PG 13 movies, they 
are marketing R-rated movies to teens, and that is my question. 
He hasn't answered that.
    Mr. Valenti. I think I just answered the question, Mr. 
Chairman.
    Ms. White. You said no R before G. What about no R before 
PG and no R previews before PG 13?
    Mr. Valenti. What I am trying to tell you is that we made 
some pledges in our 12-point set of initiatives. The very first 
pledge said we would not--our companies would work with 
theaters so that there would be no trailers for R-rated movies. 
R rated for violence is what the pledge says, in any theaters 
that is showing a G-rated movie. That is our pledge. That is 
what we said publicly, and that is what we are complying with.
    Ms. White. I just want to say that a lot of parents are 
concerned about their children at PG and PG 13 movies seeing 
previews to R-rated movies.
    Mr. Stearns. Are you happy with your replies?
    Ms. White. I am happy that I got a simple reply, but I am 
not happy with this policy.
    Mr. Valenti. Well, I think I also said this to Ms. White 
when she wrote us. I responded. I responded to every one of her 
missives which come to me over the years.
    Ms. White. Excuse me. I have only sent you one.
    The Stearns. My time has expired. I think we have given you 
both an opportunity and now the distinguished chairman of the 
full committee, Mr. Tauzin, is recognized.
    Chairman Tauzin. Thank you, Mr. Chairman. Jack, I want to 
read you a statement that Ms. Rosen makes in her testimony. The 
debate over music keeps coming back to the same thing, despite 
all of the trappings and new ways to look at the--the fact is 
that some people just don't like the music. And that is a 
freedom of expression issue. Let me ask you, does the rating 
system that the motion picture industry follows, that it has 
agreed to follow, does it, in any way, contravene or limit the 
freedom of expression of movie makers in America?
    Mr. Valenti. Does it contravene freedom of expression?
    Mr. Tauzin. Yeah.
    Mr. Valenti. It's voluntary.
    Chairman Tauzin. You can make any movie you want, right? 
You can make the most violent, the most sexually explicit----
    Mr. Valenti. Absolutely.
    Chairman Tauzin. Anything you want in America?
    Mr. Valenti. Correct.
    Chairman Tauzin. You said about the rating. So the rating 
system doesn't say to anybody you are not free to express 
yourself in a movie, does it?
    Mr. Valenti. No director, no producer has to cut one 
millimeter of his film.
    Chairman Tauzin. If he doesn't want to. He just doesn't get 
the rating he might like, right?
    Mr. Valenti. That's right. He may not get the rating he 
wants, or he can go to the marketplace, Mr. Chairman, without a 
rating.
    Chairman Tauzin. That is right.
    Mr. Valenti. The strength of this rating system, the reason 
why it has withstood challenges in the court is it is not 
compulsory, it is not government inspired, it is totally 
voluntary.
    Chairman Tauzin. And as a result it doesn't limit freedom 
of expression. And it gives out a great deal of information 
that parents and others can use in deciding whether to take 
their children to that movie or watch it, right?
    Mr. Valenti. That's right. And Mr. Chairman, and also point 
out that I know in one of the bills introduced in this House 
and in the Senate, they refer to adult-rated movies. That is a 
misnomer. The adult rating category is NC 17. The R rating is 
not adult rated because children can get into an R-rated film.
    Chairman Tauzin. Thank you, Jack. The other question I want 
to ask you is it difficult for the industry to make those 
ratings work? Is it difficult to figure out which movie gets an 
R and which one gets a PG 13 or whatever?
    Mr. Valenti. Yes, sir, it is.
    Chairman Tauzin. It is difficult, isn't it?
    Mr. Valenti. It is difficult.
    Chairman Tauzin. But you do it.
    Mr. Valenti. Because you are dealing with subjective--it is 
subjective.
    Chairman Tauzin. But you do it. It's difficult, isn't it?
    Mr. Valenti. Yes, sir. It is.
    Chairman Tauzin. Now let me go to you, Hilary, because that 
was your word.
    Ms. Rosen. I knew where this was going.
    Chairman Tauzin. Ms. Rosen, that was your word. You said 
maybe parents would like us to differentiate between the music 
you wouldn't read to us--and by the way, if you were going to 
read--if you were about to read it, I just told Ms.----
    Mr. Valenti. I think you are using me as a stalking horse, 
Mr. Chairman.
    Chairman Tauzin. Yes, I was. But you were a good one and I 
appreciate it.
    Ms. Cubin gave you some music. If you were going to read 
it, by the way, I was going to stop and ask as a point of order 
that we give a parental warning to everyone. I read that stuff.
    Ms. Rosen. As would be appropriate.
    Chairman Tauzin. And I thank you for not reading it. But 
these are your words, that, well, parents may like us to 
differentiate between the most violent, the most explicit and 
something else. But it's too difficult. But you see, Mr. 
Largent pointed out something. It was pretty interesting. He 
pointed out that the industry does, in fact, target videos in a 
way that they fit television. So music videos are, in fact, 
compromised. The vision of the artist is, in fact, changed a 
bit so that it fits the television requirements. So I gather 
several things from this. One, that is probably difficult, but 
you do it. The industry does it. And No. 2, that it is not a 
matter of principle. It is a matter of marketing. And if you 
want to get your music video on television, you compromise. The 
artists compromise and he designs it a little differently so it 
fits television.
    It is a matter of choice, isn't it? It is a matter of 
marketing. If you want the television market, you change the 
product so that it fits the requirements of television. If you 
don't want it, you can make music videos that will never be 
seen on television. You just market them some other way.
    My point is, that your artists do, in fact, make decisions 
just like the motion picture association artists make decisions 
about what they want to say and how they want to say it. And 
they do it for marketing reasons. I assume some of these 
artists who produce the CDs may choose--they may choose to do a 
CD that doesn't get that parental warning on purpose, because 
they think maybe they will sell more CDs to a different class 
of people. And others choose instead to accept this warning on 
their music because they want their vision, however violent or 
however expressive it is. They want it, exactly as it is, 
unaltered, unfettered by any government or association telling 
them that what to say, how to say it. And that is their right.
    And by the way, I will fight with you, alongside of you for 
their right to do that if they want to do that. But the point I 
am making is that all of those artists are just like the 
artists in the Motion Picture Academy. They make choices about 
whether they produce that CD or the one you wouldn't read or 
``Killing Me Softly With His Song.'' And they make it based 
upon whether or not they are going to get that label or not. It 
isn't a matter of principle. It is not a matter of limiting 
freedom of expression, isn't it. It is really a question of is 
it too difficult. I mean, that is the defense you make to a 
more differentiated rating system. It is too difficult. That is 
really what it gets down to, isn't it?
    Ms. Rosen. There are so many places to go with that 
question.
    Chairman Tauzin. Well, just take it anywhere you want to 
go.
    Ms. Rosen. And it is a thoughtful question that deserves a 
thoughtful answer. And you, know despite the jokes, this is a 
serious issue, and I understand that. I am not exactly sure 
what it is you are asking for because if you have a rating 
system like the Motion Picture Association, where they 
basically rate everything, they are 500 movies a year?
    Mr. Valenti. 650.
    Ms. Rosen. 600 movies a year, compared to the music 
industry, which commercially releases about 370,000 songs a 
year, just commercially. And then of course we know----
    Chairman Tauzin. You are saying it is more difficult, music 
is more difficult?
    Ms. Rosen. Let me keep going here. So if you did it in the 
context of everything--there should be a rating system for 
everything, so there was G-rated music and R-rated music and X-
rated music or NC 17, then you get to a place where you are 
really making value distinctions between Johnny Cash.
    Chairman Tauzin. No, no, no.
    Ms. Rosen. Let me just keep going for a second.
    Chairman Tauzin. I don't want you to go there because you 
are suggesting that we are asking you to make value 
distinctions that would censor or limit free speech. I want to 
be very clear about that. I am only asking whether or not you 
haven't already agreed that, difficult as it may be, that you 
rate some music one way and rate some music differently. You 
have already agreed to that. The only reason you don't 
differentiate even more is that it is too difficult. Is that 
correct?
    Ms. Rosen. It is not that it is difficult because nobody 
wants to work hard. It is difficult because it is too 
subjective. And I think----
    Chairman Tauzin. Well, Jack said the same thing. Jack said 
that the reason that it is difficult to rate movies is because 
it is so subjective.
    Ms. Rosen. But there is more data for movies.
    Chairman Tauzin. But they do it.
    Ms. Rosen. There is more data in movies. But let me go to 
what that would result in, because if the goal is to say, well, 
I mean, what's the goal? To say that----
    Chairman Tauzin. The goal is to simply give parents a 
little more information about how violent, how explicit this 
movie is as compared to literally to separate the varieties of 
this kind of music from one another so parents can know.
    Ms. Rosen. Frankly, that is not an issue that comes up.
    Chairman Tauzin. The movie industry did that. They went 
through this same process and they went through the same 
grueling, horribly difficult process by which those of us in 
our positions who desperately want to protect the right of your 
artists to their free speech in whatever form they want to use 
it. And I say it again. I will defend, as we should all do, to 
the death, the right of every artist in your association to 
make whatever music they want to make. But the music industry 
went through the same process and concluded, I think correctly, 
that Americans deserved a differentiated system of knowledge 
about what this music contains; the videos contained, rather. 
And I am suggesting to you, I am telling you, if we did another 
meeting in Peoria and invited your artists to come and the 
parents of Peoria to come and sit down with you in an open 
forum, you would get an earful. You would get an earful from 
those parents like you are kind of getting an earful from some 
members here, not because they don't think your artists have a 
right to make the music you won't read today, but because they 
simply think that music, as compared to a lot of other music, 
is so different, perhaps it ought to be labeled extraordinarily 
different from a lot of the other music that still gets an 
explicit parental warning category. That is all.
    There is a huge difference between some of that stuff. And 
as difficult as it is, difficult as it was for the movie 
industry to do it, maybe it is in the best interest of the 
recording industry for marketing purposes for the good of its 
relationship with its audience and the consuming public of 
America, and for the good of parents like yourself who are 
concerned about their children, that this is just one more 
useful tool the industry could give parents to literally do 
what you agree is a much more difficult job of raising kids 
today.
    Let me conclude with a thought. You used the word ``killing 
me''--the music ``Killing Me Softly'' as an example of music 
that shouldn't be rated. It has got a good message in there. 
You know, the song is about someone who is hurting. And it 
literally says he is ``killing me softly with his song, with 
his words.''
    And there are parents in America who think some of this 
music is killing this children softly. It is killing their 
value systems, killing their innocence. It is killing their 
sense of where they are in the cultural growth curve. And they 
would like to know a little bit more about which of the stuff 
has that potential and which doesn't before their kids go out 
and buy it.
    And I just will urge you one last time, I don't want to see 
our committee or the FTC regulating your industry any more than 
I wanted to see it regulating the video industry. Jack will 
tell you I stood against the Senate bills and I will stand 
against legislation to regulate you here. But I ask you again 
to listen to the voices of American parents, as you heard it 
today from these members, and I know you hear it from the 
Senators as you would hear it in Peoria, and give this a second 
look. I think you might come to a different conclusion, as 
difficult as that may be.
    Ms. Rosen. Mr. Chairman, I spend a lot of time up here, and 
this industry is the benefit of a lot of good public policy 
from this Congress and this committee. It is my nature to be a 
compromiser. I would love to be able to sit here and tell you 
and tell this committee that we can do what you want if, in 
fact, there was something specific about it, that we could get 
our arms around. But I think it is not easy for me to sit here 
and tell you that this is a decision based on principle.
    We have already heard from Wal-Mart that we would sell more 
if we did what you are saying you want. It is not that--it is 
not that we don't want to do the work. It is not that we don't 
care. Our industry is full of as many parents as this Congress 
is full of. These are very extraordinarily delicate and 
interpretive and subjective issues, and we think we are doing 
the best that we can in terms of how we inform people. We don't 
want anyone to feel fooled by the rating system they have. 
That's why we deliberately make it as broad as we do.
    I sat here and said, as I have said publicly for the last 3 
months, the FTC was right to tell us that we weren't 
implementing our guidelines properly and we have to do a better 
job at that. But I have too much respect for this committee to 
walk out of here and have you walk out of there and think that 
you have told me something and now I am going to go do 
something. The FTC report in the fall is probably going to 
criticize us just as much as the last two have. And I--that is 
not something that makes me happy. It is just a fact of life 
because of this difference.
    Chairman Tauzin. I appreciate that, and my time has 
expired. I am going to yield back. I am not--I didn't come here 
today to tell you what to do. I came here today to ask you to 
listen to the voices of American parents. And that is a good 
request. It is the same request I made to the video industry 
when they were faced with similar criticism and similar bills 
in the Congress to actually tell you what to do. I don't want 
to be there. I want to help defend against that relationship 
between the government and our people. I think the First 
Amendment was designed to protect you from us in that regard. 
And I respect it for that.
    I am not here to tell you to do a doggone thing. I am here 
to ask you to listen a little more carefully to the voices of 
American parents. That's all.
    Thank you, Mr. Chairman.
    Mr. Stearns. The gentleman's time has expired. The 
gentlelady from Wyoming, Ms. Cubin.
    Mrs. Cubin. Thank you. First of all, Hilary, I want you to 
know I think you have earned your paycheck today. And you have 
done a good job of explaining your industry's position, and we 
do just have some legitimate disagreements. But that is okay. 
That doesn't mean we can't continue to work together and try to 
make everybody better for having done that. I want to just add 
one little point and then we are all close to being free to go.
    Off the Grammy dotcom Web site I was curious, as I 
mentioned earlier, about--that album Eminem's album that won 
best rap album of the year, got the Grammy for that. I wanted 
to know what--how Grammy winners are selected because, you 
know, I didn't know that. But they are selected, as you know, 
it is a most prestigious award, and it is awarding--it is 
awarded from the Academy's voting membership to honor 
excellence in the recording arts and sciences. It is truly a 
peer honor, and sales and chart positions don't have anything 
to do with it.
    I think that an album like the one--and by the way, I would 
not have let you read that either. I wouldn't want to embarrass 
you like that and I would have stopped you if you had started. 
But the album that has words that neither you or I will speak 
in public to be the best rap album of the year sends such a bad 
message about whether or not your industry does care about our 
kids. And I believe you do. But it really sends a message. I 
don't need to say it anymore. Thank you all for being here. 
This has been a grueling hearing.
    Mr. Stearns. I thank the gentlelady. The gentleman from 
Nebraska, Mr. Terry.
    Mr. Terry. Thank you. I have got one follow-up comment and 
a follow-up question to you, Ms. Rosen. One is we talk about 
the level of subjectivity, and you know it is kind of like art. 
You know, where do you draw the line. But they have been able 
to do it in the movie industry to some extent, and I think that 
is why they are here, to kind of show that they have been able 
to take something subjective and do something objective with 
the rating. But you can't convince me that you get 10 
reasonable folks in a room and they can't tell the difference 
between ``Killing Me Softly With His Song'' and ``I am going to 
choke this radio announcer, this principal, this student body, 
the counselor, get me the machete from O.J. I am going to make 
everyone's throats ache.''
    You can't tell me that is so subjective that we can't tell 
the difference in the meanings. And then you go on to the 
course of this song if I am going to kill you and then some 
other graphic lyrics. You can't convince me that 10 reasonable 
people can't see the difference between those two sets of 
lyrics. That just doesn't make sense to me. But let me--that is 
my comment.
    Now, here's my question. You have mentioned how there is 
the cleaner or edited versions of these songs or CDs that are 
also marketed. As much as I love music, it is--it used to be my 
hobby. I almost saw every concert that came through Omaha, 
Nebraska, and there used to be a lot more than there was now. 
So I mean rock and roll was--I know it. But now I don't get to 
buy that much music. And like I said, I think the only rock and 
roll CD I have been able to buy to Smash Mouth, because my son 
liked that song ``All Star'' so much.
    But if I walk into Best Buy today, how do I know, as a 
parent, an edited version versus a nonedited version? How well 
are those marketed? And in what percentage relative to the 
unedited version is an edited version also distributed?
    Ms. Rosen. That is a good question. The edited version is 
indicated on the top spine where it has the album information 
in a store, so it won't have the parental advisory level, and 
it will say ``edited version'' on the top spine.
    Mr. Terry. All right. And then how, in what percentage or 
what, some objective measurement is an edited version also 
distributed relative to the unedited version.
    Ms. Rosen. Well, the--another good question that--the way 
it works is this a record company makes music available to 
retailers. And buyers who work for Mr. McMillon and other 
stores around the country then place orders with the record 
companies for their own stores. And so it is really up to the 
retail store to determine the mix that they want for their own 
community and their own stores.
    Wal-Mart, for instance, through their distributors, won't 
order any music with a parental advisory label. Other stores 
order more. The fact of the marketplace is that--and Mr. Peeler 
mentioned this before. Most stores order more of the labeled 
version than the edited version because that is what they 
believe will sell to their consumers. But we make both 
available to them.
    Mr. Terry. I appreciate that you make both available. But 
just--I am curious to know an objective measurement of how many 
of the edited versions are out there versus the unedited. And I 
do realize--I appreciate your comment that the retailer makes 
that decision.
    Ms. Rosen. I don't have those numbers.
    Mr. Terry. Is there a measurement out there, so if I ask 
you could you get that to the committee?
    Ms. Rosen. I don't think there is one, but I will check.
    Mr. Peeler. Mr. Terry, our report has a figure, 90 percent. 
About 90 percent of sales are the explicit version.
    Mr. Terry. All right. Because that--I will thumb through 
once in a while when we go into Best Buy, and I have got to 
tell you, at least at Best Buy, unscientific, by any means, I 
don't even remember even seeing an edited version of some of 
these. And again, that is their decision.
    Ms. Rosen. Well, it is.
    Mr. Terry. I was even surprised that there was----
    Ms. Rosen. You know, it may say something about what the 
marketplace requires, but we are making actually an effort in 
our advertising now to alert people to when an edited version 
is available, so that they will know not only that a record has 
a parental advisory label, but also that an edited version is 
available, so that they can begin to go into stores and ask the 
retailer for the edited version, so that if the retailers 
aren't stocking them, they will begin to purchase it for their 
own customers.
    Mr. Terry. Well, that is interesting because that raises a 
good point. I walk into Best Buy, as opposed to Wal-Mart, to 
buy a CD. I don't even know if there is an edited alternative 
that may be more appropriate under the age circumstances, 
whatever ages we have in our children. So, you know, that may 
be something that we can also----
    Ms. Rosen. The retailer will always know. But we are making 
an effort to make sure the consumers know.
    Mr. Terry. I appreciate that effort. I am also curious--it 
seems to me that a lot of the edited versions that I at least 
hear about aren't necessarily entire CDs, but maybe the pop 
song, the hit song off of that CD. Is that accurate, or is that 
the edited version is usually just that one or two songs versus 
the entire CD?
    Ms. Rosen. Well, no. But sometimes there are albums where 
there is just too much profanity to edit, so they will take a 
song, a whole track off an album. So people--they try and make 
an effort to sort of be responsive. But if it is just a single 
song it would be a single, not an album.
    Mr. Terry. Okay. And the Eminem CD that we listened to 
prior to this hearing, there is probably no edited version of 
that because I think it just probably would be a silence for 60 
minutes.
    Ms. Rosen. There actually is an edited version.
    Mr. Terry. Yeah. Or as Barbara said, just maybe some sounds 
of chain saws going in the background.
    Ms. Rosen. There is an edited version.
    Ms. White. But if I could say, as a parent, that is a real 
problem because the kids are getting basically the same message 
in the edited version of some of them, you took some of the 
words out but the theme, whether it is misogyny or rape, 
killing, it is the same.
    So a lot of the parents have told me they are upset when 
they buy an edited version and it is the same, you know, R-
rated, X rated song with some words taken out. It is a real 
problem.
    Mr. Terry. Yeah. And just in closing, that hooks up to the 
point that I made in my opening that you hear a cleansed 
version and as a parent, you go, you know, that is close to a 
line that I would draw as a parent, but I will allow it. And 
then you don't know that that is a cleansed or edited version. 
And then when they go, you allow them, as a parent, to buy a 
CD, that that ain't what they are buying. So--thank you, Mr. 
Chairman. I yield back.
    Mr. Stearns. I thank my colleagues. We have concluded the 
hearings. But I thought Mr. McMillon, you and Mr. Lowenstein 
have not had the opportunity to answer any questions during 
this 3 hours that we have had this hearing. So I was going to 
welcome your comments before we close. Mr. McMillon, if you had 
any comments on what you heard, or perhaps any insights that we 
have missed, we would appreciate your summation.
    Mr. McMillon. I rather enjoyed not answering a question, 
sir. Thank you. Thank you for having me.
    Mr. Stearns. All right. You are welcome. And Mr. 
Lowenstein?
    Mr. Lowenstein. I have been around long enough to know that 
if they haven't asked you a question at a congressional 
hearing, you should get out before you get in trouble.
    Mr. Stearns. Okay. Well, let me just say in conclusion, 
there are two bills in the Senate and there is one in the House 
that are dealing with this hearing that we have had. I believe 
most of the thrust of these bills are dealing with antitrust 
measures to allow industry to come together to cooperate to 
solve this problem. At least one of the bills in the Senate, 
but as I say, there are three bills here, so I think this 
hearing has not been on the bills, but it is sort of 
preliminary here, so I suspect you are going to be over in the 
Senate very soon for a similar type of hearing dealing with 
their bills.
    I think the conclusion here is that the Federal Trade 
Commission came out with a report in September and a report in 
April and indeed, they complimented the video game industry for 
what they were doing, and indicated that they were not 
targeting children. Then, they indicated that the Motion 
Picture Association was, and the Motion Picture Association 
took steps, and felt, as Mr. Valenti said, that they should 
take steps. But at this point the recording industry started to 
take targeting guidelines, but decided not to, and the Federal 
Trade Commission has indicated as we stand here today at this 
hearing that the recording industry continues to target teenage 
populations 16 and under, and the recording industry does not 
agree with that, and will not attempt to provide any 
guidelines. And so with that, what we heard, we thank all of 
you for your time. And I think it was a very good hearing, and 
the committee is adjourned.
    [Whereupon, at 12:25 p.m., the subcommittee was adjourned.]
    [Additional material submitted for the record follows:]

        Prepared Statement of Video Software Dealers Association

    Mr. Chairman and Distinguished Members of the Subcommittee,
    The Video Software Dealers Association (VSDA) submits this 
statement for the record of the hearing examining the entertainment 
industry's efforts to curb children's exposure to violent 
entertainment.
    VSDA shares with parents the concern about the impact on children 
of depictions of violence, and the Association does not believe that 
children should be able to obtain videos and video games that their 
parents determine are not appropriate for them. Accordingly, we are 
pleased to report that for more than a decade the nation's video stores 
have been doing their part to make sure that America's children do not 
have access to movies rated R by the Motion Picture Association of 
America (MPAA) and video games rated M by the Entertainment Software 
Rating Board (ESRB) without their parents' consent.

Video Software Dealers Association
    Established in 1981, VSDA is a not-for-profit international trade 
association for the $19 billion home entertainment industry. VSDA 
represents more than 2,000 companies throughout the United States, 
Canada, and 22 other countries. VSDA members comprise the full spectrum 
of video retailers (both independents and large chains) and operate 
more than 11,000 video stores across the nation. VSDA also includes the 
home video divisions of all major and independent motion picture 
studios, video game and multimedia producers, and other related 
businesses which constitute and support the home video entertainment 
industry.

Parental Empowerment Programs
    The home video industry has for more than 10 years maintained a 
proactive and effective program to help parents make well-informed 
choices on the movie and video game content rented for their children.
    We start with the premise that the best control of entertainment is 
parental control, and there is no better place than in a home video 
store for parents to control the content of the movies and video games 
to which their children have access. Video retailers aid parents in 
making more-informed entertainment choices for their families through 
parental empowerment programs that combine ratings education with 
voluntary ratings enforcement. They do this by using VSDA's ``Pledge to 
Parents'' program and the similar, company-specific programs used by 
VSDA members Blockbuster, Hollywood Video, Movie Gallery, and others.
    The centerpiece of Pledge to Parents, established by VSDA in 1991, 
is a commitment by participating retailers:

1. Not to rent or sell videos or video games designated as 
        ``restricted'' to persons under 17 without parental consent, 
        including all movies rated R by the MPAA and all video games 
        rated M by the ESRB.
2. Not to rent or sell videos rated NC-17 by the MPAA or video games 
        rated Adults Only by the ESRB to persons age 17 or under.
    In addition, many retailers solicit from customers individualized 
instructions regarding what types of videos can be rented or purchased 
by family members. Thus, these voluntary systems allow parents, if they 
so choose, to be even more restrictive than any industry- or 
government-enforced system would be.

FTC Reports on Entertainment Marketing
    The September 2000 report of the Federal Trade Commission (FTC), 
``Marketing Violent Entertainment to Children,'' showed the programs of 
video stores to be the most effective of any that the FTC examined.\1\ 
It did not identify a single specific instance of a video store renting 
an R-rated movie or an M-rated video game to a person under 17 years of 
age. Regarding the findings in the report on sales of videos and video 
games by mass merchant retailers, as opposed to video stores, major 
retailers such as Wal-Mart, Kmart, and Toys R Us have resolved to work 
through the logistical barriers to ratings enforcement in their stores. 
The FTC's April 2001 follow-up report, while not focusing on ratings 
education and enforcement by retailers, did suggest some improvements 
in advertising and online marketing practices of mass merchant and 
other sell-through retailers (as opposed to video rental stores). VSDA 
is reaching out to these retailers to assist them in responding to 
these suggestions.
---------------------------------------------------------------------------
    \1\ ``Parents have significant controls over the videos their 
children rent because of limitations established by the major rental 
outlets . . . Blockbuster Video and Hollywood Video, the dominant home 
video membership stores, have responded to parental concerns by 
adopting policies that give parents the option to restrict the videos 
rented by their children . . . [R]enting R-rated videos usually 
requires a degree of parental involvement.'' Federal Trade Comm., 
Marketing Violent Entertainment to Children: A Review of Self-
Regulation and Industry Practices in the Motion Picture, Music 
Recording & Electronic Game Industries, 20-21 (2000). VSDA believes 
these findings are true also for the vast majority of other chains and 
independent video retailers, as video stores of all sizes have 
effective parental control policies. Also, please note that Hollywood 
Video has changed its policy to require that parents must affirmatively 
give their consent to their children's rental of R-rated videos and M-
rated video games, rather than presuming parental consent in the 
absence of other instructions, and will shortly have full 
implementation of this policy.
---------------------------------------------------------------------------

Conclusion
    VSDA's Pledge To Parents and other voluntary ratings education and 
enforcement programs demonstrate the home video industry's commitment 
to the communities that our member video stores serve. More 
importantly, they support the rights of parents to make fundamental 
decisions involving their children, while emphasizing the need for 
parents to take responsibility for what their children watch and play. 
The report of the FTC shows that these programs work.
    Finally, we must caution against the temptation to use legislation 
to attempt to reduce the level of violence in entertainment. Since the 
FTC issued its report last fall, we have seen pressure to enact 
legislation to prevent truthful advertising about the content of 
entertainment (H.R. 2246/S. 792), to impose a universal rating for 
violence in entertainment products (H.R. 1916), and to grant an 
antitrust exemption to entertainment manufacturers for activities 
related to ratings (S. 124). We must keep in mind that, in addressing 
the issue of violence in American society, the government cannot 
infringe the constitutional rights of video retailers and their 
customers--or of parents to raise their families as they see fit. 
Ultimately the responsibility for raising children lies with their 
parents, not the government and certainly not video store clerks.
    We are confident that this subcommittee will conclude that our 
voluntary efforts and partnerships between parents and retailers are 
preferable to government action in this area.
    Thank you for allowing us to share our views with the subcommittee.

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