Game Politics (gamepolitics) wrote,
Game Politics

PSV Ratings Dead? Circumstances Mysterious...

Has PSVratings gone belly-up?

PSV, a media content rating service based upon a proprietary system, emerged in recent years as a would-be competitor to the ESRB, MPAA and other ratings formats. The company, however, appeared to enjoy little success, at least in regard to video games.

A source familiar with PSV told GP that the company had recently ceased operations in the wake of a fraud investigation by the Securities and Exchange Commission (SEC). This source also said that PSV employees did not receive their final paychecks when the company closed its doors without warning.

Indeed, the listed phone number for PSV is no longer in service, although the company's website is still up. In an e-mail to GamePolitics, CEO David Kinney confirmed that the company had shut down:

"PSVratings laid off all employees and suspended operations on May 30, 2006. We are fully cooperating with the SEC in their investigation. We are in the process of recapitalizing and I remain active in ensuring that we maintain our leadership position in the independent ratings industry."

It remains unclear to what extent the PSV closure is related to a June 6th SEC complaint against Frank Russo. Russo is listed by the Los Angeles Better Business Bureau as chief financial officer of Veritasiti, a corporate entity with ties to PSV.

The SEC alleges Russo orchestrated a Ponzi scheme in which investors were defrauded. The watchdog agency also claims that Russo "invested at least $11.5 million in client funds in a California corporation, which Russo co-founded with a friend from college."

Kinney, a Harvard graduate who has testified before both the U.S. Senate and Federal Trade Commission on ratings issues, is also listed as CEO of MediaData Corp., which describes itself as "the industry leader in entertainment media research and analysis."

MediaData is one of several corporations with links to PSV. The L.A. Better Business Bureau lists both PSV and MediaData as controlled by Veritasiti. David Kinney is named as contact person for Veritasiti, and the phone number, like that of PSV, is disconnected. Entering into a web browser redirects users to the MediaData website.

Neither Kinney, PSV nor any of the associated companies are named in the SEC complaint. Although Kinney expressed high hopes for PSV in this CNBC interview, some found it difficult to understand the company's business model given the labor-intensive nature of its rating process as well as entrenched competition it faced from industry-controlled rating systems for video games, movies, television and music.

PSV came in for a brief mention in the 2005 Annual Video Game Report Card issued by the National Institute for Media and the Family. However, NIMF president Dr. David Walsh told GP last December, "We were not paid by PSV to do that study nor did we pay them... We don't have any relationship with PSV." Walsh indicated then that he did not believe PSV would be invited to NIMF's planned video game ratings summit. That event was recently announced for October 21-22.

Our source told GP, "I think Walsh wasn't too keen on working with us, but (PSV) wanted to work with him... We tried to participate on the Rating Awarness Month but were given a polite no."

It's important to note that there are no known allegations that either David Kinney or PSV have committed any wrongdoing. The SEC complaint against Frank Russo notes that a jury trial is demanded.

The ESRB declined to comment on the PSV situation.

GameDaily Biz and GameSutra picked up this story and each added some additional info.

UPDATE: David Kinney wrote in to say, "We have never positioned ourselves as competitors of MPAA or ESRB but rather as a robust supplement to the ratings each provides... We do not advocate censorship nor do we seek to replace MPAA or ESRB. In fact, to the contrary, we see them as being in the best position to determine who can or cannot purchase or view the offerings of the industries they represent while PSVratings provides consumers with objective information to enable them to make informed purchase and rental decisions based upon their own personal standards of suitability... The business model for PSVratings was and remains to provide this objective data free of charge through an advertiser supported"

Tags: david kinney, frank russo, mediadata, psv ratings, sec, veritasiti
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