The current film rating system that the Motion Pictures Association of America implements did not start out with five different tiers. It was in the 1930s when Hollywood began to self-regulate and impose content regulation guidelines on films due to criticism from the public and the push for censorship on certain subjects.
Back then, the industry turned to Will H. Hays to draft for them a set of guidelines that will ensure moral standards on the films being put out in theaters. This document was called the "Hays Code".
For the first couple of decades, it governed the way films were made based on the morality being depicted so that parents may rest assured that the films they will see won't adversely affect their children. But as times changed, people in the industry felt the need for the Hays Code to change as well.
In comes Jack Valenti, in the 1970s, who proposed a classification system that comprised of four tiers: G, M, R, and X. Later on, M would be replaced by PG, and so the rating system was as follows: G for general audiences; PG for films wherein parental guidance is advised; R stands for restricted, and requires that anyone under 17 be accompanied by an adult; and X, which is strictly prohibited for anyone under 17.
When the 80s came in, a few things happened that urged the MPAA to add an intermediate PG-13 rating. Ronald Reagan's presidency brought with it a stronger sense of morality in the public sphere which affected the film industry as well. But more than this, three films in particular drove the industry to action toward a more nuanced rating system: Poltergeist, Indiana Jones and the Temple of Doom, and Gremlins.
And so, today, the MPA's film rating system is comprised of five tiers: G for general audiences; PG which urges parental guidance; PG-13 which strongly recommends parents to exercise caution with their children; R for films which require adult supervision for those under 17; and NC-17, which is for clearly adult films.
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