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Mr. Chairman, members of the
Subcommittee, I am Gary Severson Senior Vice President and General Merchandise
Manager, for Wal-Mart Stores.
My predecessor, Doug McMillon,
testified before your subcommittee in July last year on the issue of the
entertainment industry’s efforts to curb children’s exposure to violent
content. I understand the hearing
today is a follow-up to the July hearing and the purpose is to review the
recording industry’s marketing practices.
Before addressing the marketing
issue, I’ll briefly describe Wal-Mart’s approach to our customers and
entertainment ratings.
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 a majority of our customers would 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 most R rated content.
Our buyers for movies determine which 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 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, the recording
industry has not provided us a rating 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 most edited versions of music on selected product.
This product is labeled “edited version.” Our buyers for music
determine which music to carry based on their best judgment. As we testified last year, from our perspective, an unbiased,
standardized ratings system would help our customers determine whether specific
music is appropriate for their needs and tastes.
If the recording industry adopted a
rating system, we would educate our customers about the rating system; train our
associates about our company policy on the sale of rated music, and would most
likely age restrict the sale based on the rating.
We would enforce the restriction through a register prompt as we do with
R rated movies and M rated video games.
Marketing of Music
Marketing of music is generally a
partnership between the recording industry and the retailer.
The recording industry will fund the marketing and provide the content in
coordination with the retailer.
As for Wal-Mart, our marketing of
music is much more limited than that of other retailers.
Our main approach is to market music in a store and drive customer
traffic to the entertainment area where we display the music. We display the music to encourage sales.
Occasionally we will do television and print advertising of title
specific music. We control the
content of the advertising and try to insure the ad is appropriate and appealing
to our customers.
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
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