FTC to Slam Music Firms for Ignoring Self-Policing

A much-anticipated sequel to last year’s scathing Federal Trade Commission report on the marketing of violent entertainment to children is expected to single out the recording industry for failing to respond to federal officials’ recommendations.

The film and video game industries are said to have shown some progress but have not completely ceased the marketing of inappropriate material to children, according to industry sources familiar with briefings given to congressional aides.

The preliminary review of the marketing practices of the film, music and video game industries--called a “snapshot” by Senate Commerce Committee staff members who requested it--is scheduled to be released Tuesday.

In it, sources familiar with the report said, the FTC scolds recording companies for doing virtually nothing to address criticisms of marketing and rating practices lodged when the original report was issued in September.

The initial follow-up is the first of two reviews of the entertainment industry’s behavior requested by Senate Commerce Committee Chairman John McCain (R-Ariz.). McCain and other senators have pledged to monitor the industry’s practices in the wake of revelations about specific schemes to market mature material to minors--including commercials on morning cartoon shows and pitches to Girl Scout troops.

The issue has cooled since last year’s presidential election campaign. Some entertainment executives have expressed relief that the Bush administration has shown little inclination to engage in culture wars--a sharp contrast to the vows by last year’s Democratic White House ticket of Vice President Al Gore and Sen. Joseph I. Lieberman of Connecticut to give Hollywood six months to “clean up its act.”

The report could reignite such concerns. Aides to McCain said he would decide soon after the report’s official release whether to call more hearings now or wait for the in-depth review due from the FTC in the fall. And Lieberman, making good on his vice presidential campaign promise from his seat in the Senate, plans to introduce legislation this month to give the FTC authority to prosecute entertainment companies for violating voluntary agreements to clean up their practices.

The initial follow-up comes just after the second anniversary of the April 20, 1999, massacre at Columbine High School in Littleton, Colo. The shooting deaths of 12 students and one teacher--and the suicides of the two teenage gunmen--led then-President Clinton to ask the FTC to investigate whether entertainment companies were trying to attract children to adult-rated movies, music and electronic games. The answer was “plainly yes,” according to investigators.

Since then, the video game industry has been commended by some parent groups and politicians for making the most headway in trying to keep adult-rated video games out of children’s hands. Still, those familiar with the latest FTC report say there is room for improvement.

Movie industry officials expect criticism for not having a uniform standard for marketing. Some in the industry regard that objection as unfair, however, because it reflects the fact that some studios elected to go beyond the 12-point plan drawn up under the guidance of Jack Valenti, president of the Motion Picture Assn. of America.

“The FTC report got our attention and changed behavior, but we’re still in the business that we’re in,” said one studio executive, adding that Hollywood has grown accustomed to occasional political turbulence.

The recording industry is almost certainly in for the harshest assessment. Current guidelines by the Recording Industry Assn. of America avoid the industrywide standard sought by federal officials and call instead for individual labels to work with artists to determine which material should carry “parental advisory” labels.

The industry also has resisted providing age guidelines for possibly offensive material. Last year, the FTC criticized the industry for making no distinction between content inappropriate for 7-year-olds, 12-year-olds and 16-year-olds.

Sources acquainted with the new findings say the report also will admonish the recording industry for failing to provide parents with access to lyrics on demand and for continuing to market material with “explicit content” to minors.

Music executives also speculate that the FTC will turn its focus to how retailers enforce their own policies against selling stickered albums to children. In an undercover study of 383 stores conducted for the commission’s first report, unaccompanied children ages 13 to 16 were able to buy stickered records 85% of the time.

RIAA officials on Saturday defended the music business, saying the criticisms are only part of the story.

“We are the only industry that offers edited versions of our stickered material to consumers,” RIAA spokeswoman Amy Weiss said. “And we have a system in place that the FTC’s own report said 75% of parents find useful and effective.”

Still, one record executive, requesting anonymity, predicted “a bad year” on Capitol Hill for the music business: from issues of Internet access to music to artists’ rights and standard recording contracts. “It’s going to be a completely divided industry,” the executive said.

Congress’ ability to get Hollywood to change its ways may lie mainly with politicians’ power to embarrass.

And the atmosphere has changed in the seven months since top movie studio executives were called on the carpet by McCain for snubbing his initial request to appear at congressional hearings. Some big Hollywood names, although not the biggest, showed up when summoned for a second hearing, apologizing for and expressing shock about instances such as 10-year-olds being used in focus groups for movies later rated R.

But when lawmakers angry about the findings looked for legal remedies, they came up short. FTC Chairman Robert Pitofsky, at the request of Congress, examined his agency’s power to force Hollywood to honor its voluntary rating code and found “significant and unsettled 1st Amendment issues” as barriers to federal oversight. Pitofsky’s assessment has been cited time and again by entertainment industry officials, who like to point out that they are one of the only businesses to voluntarily turn away customers.

Pitofsky, whose term expires this year, went on to say that, while it might be possible to craft careful legislation to allow the FTC to prosecute, such efforts could slow or halt self-regulatory initiatives.

Music industry leaders say it was just such concern about setting themselves up for prosecution that led them to withdraw voluntary industrywide standards for the marketing of mature material that had been offered by the RIAA in advance of last year’s 105-page FTC report.

At the time, RIAA officials successfully dodged the brunt of Congress’ wrath with a preemptive offer to standardize marketing guidelines for material rated unsuitable for those age 17 and under. But record executives say they balked, and the RIAA rescinded the memorandum after some lawmakers said they would pursue ways to levy civil penalties against companies that failed to adhere to voluntary initiatives.

Recording executives now are bracing for sharp criticism from the FTC for withdrawing the plan.

“The position was, if we’re going to try and do something, and by virtue of doing it get sued for all sorts of civil penalties, we just won’t institute this,” said one senior record executive familiar with the FTC report. “We’re not going to take any chances.”

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Garvey reported from Washington and Leeds from Los Angeles. Times staff writer Meg James in Los Angeles contributed to this story.