Markets Wired

The Federal Trade Commission today released the results of its latest nationwide undercover shop of movie theaters and movie, music, and video game retailers. The FTC conducted a survey with 13-to-16-year-old undercover shoppers to collect data about the extent to which retailers prevent unaccompanied children from buying tickets to R-rated movies, R-rated DVDs, Unrated DVDs of movies that were R-rated in theaters, M-rated video games, and music CDs labeled with a Parental Advisory Label – “PAL” – for explicit content.

The survey found that 20% of underage teenage shoppers were able to buy M-rated video games, a major improvement from all prior surveys, and down from 42% in 2006. While CD and DVD retailers demonstrated some improvement since the 2006 survey, roughly half of the undercover shoppers still were able to purchase R-rated and Unrated movie DVDs and PAL music CDs. The fact that so many children were able to purchase Unrated movie DVDs – some of which contain content that, if rated, might result in an NC-17 rating – indicates that retailers need to re-double their efforts in this area. Although movie theaters have improved since the 2000 shop, they still sold R-rated movie tickets to unaccompanied children 35% of the time, demonstrating no statistically significant improvement in ratings enforcement since 2003.

CORRECTED: May 16, 2008

The survey found that results of the undercover shopping varied by retailer and product. Three movie chains – National Entertainment, Regal Entertainment Group, and American Multi-Cinema – turned away 80% or more of the underage teens who tried to buy a ticket to an R-rated movie. Wal-Mart did the best of the major retailers shopped for movie DVDs, denying sales of R-rated and Unrated DVDs to 75% of the child shoppers.

With regard to M-rated video games, Game Stop rejected an impressive 94% of underage shoppers, while Wal-Mart and Best Buy spurned 80% of them. Some stores had very different results for different media. For example, while Best Buy rejected 80% of underage buyers of video games, it turned away underage shoppers for PAL music only 47% of the time, R-rated movie DVDs only 38% of the time, and Unrated movie DVDs only 17% of the time. Similarly, Target refused to sell M-rated games to underage buyers 71% of the time, but refused sales of PAL music only 40% of the time, R-rated movie DVDs only 35% of the time, and Unrated movie DVDs in only 23% of the cases.

Tables A through E break down the survey results by theater chain and retailer. The number of shops for each reflected that chain’s or retailer’s share of the market.

Table A:  Movie Theater Tickets (R-Rated)
Chain	# of Shops	% Able to Purchase
National Amusements	15	13%
Regal Entertainment Group	51	18%
American Multi-Cinema	35	20%
Cinemark USA	27	33%
Other	59	42%
Hollywood Theaters	15	47%
Marcus Theaters	15	47%
Carmike Cinemas	18	56%
Kerasotes Theaters	15	80%

Table B:  Movie DVDs (R-Rated)
Chain	# of Shops	% Able to Purchase
Wal-Mart	72	25%
Circuit City	16	31%
Borders	15	33%
Grocery stores	15	47%
Kmart	17	47%
Blockbuster	15	53%
Best Buy	34	62%
Barnes & Noble	14	64%
Target	31	65%
Transworld Ent.	18	78%

Table C:  Movie DVDs (Unrated)
Chain	# of Shops	% Able to Purchase
Kmart	15	20%
Wal-Mart	74	24%
Circuit City	14	29%
Grocery stores	14	36%
Borders	14	50%
Blockbuster	16	56%
Target	29	76%
Transworld Ent.	18	78%
Best Buy	32	81%
Barnes & Noble	15	87%

Table D: Video Games (M-Rated)
Chain	# of Shops	% Able to Purchase
Game Stop/EB Games	66	6%
Wal-Mart	62	18%
Best Buy	35	20%
Toys R Us	15	27%
Target	28	29%
Kmart	16	31%
Circuit City	16	38%
Hollywood Video	15	40%

Table E:   Music CDs (PAL)
Chain	# of Shops	% Able to Purchase
Kmart	12	17%
Other	44	41%
Circuit City	14	50%
Best Buy	53	53%
Virgin Megastore	15	53%
Target	30	60%
Borders	15	67%
Barnes & Noble	15	73%
Transworld Ent.	47	77%

The FTC works for the consumer to prevent fraudulent, deceptive, and unfair business practices and to provide information to help spot, stop, and avoid them. To file a complaint in English or Spanish, click http://www.ftc.gov/ftc/complaint.shtm or call 1-877-382-4357. The FTC enters Internet, telemarketing, identity theft, and other fraud-related complaints into Consumer Sentinel, a secure, online database available to more than 1,600 civil and criminal law enforcement agencies in the U.S. and abroad. For free information on a variety of consumer topics, click http://www.ftc.gov/bcp/consumer.shtm.

(08 secret shopper survey – corrected)