Shipboard Satelite Network Inc. (SSN) (CIN 4/15/87), the New York-based company planning to offer cable television news and special events to cruise ships next month, has run into some marketing snags.
Shipboard Satelite Network Inc. has been soliciting advertisers using passenger demographics that cruise line executives say are greatly exaggerated.
In the media kit obtained by CIN, the company claims that 93 percent of luxury cruise ship passengers purchase oriental rugs and original paintings or sculptures; 39 percent earn over $100,000 per year; 99 percent take at least one foreign trip per year; 83 percent are between the ages of 30 and 59; 94 percent own their own homes; and 73 percent attended college.
The media kit claims the statistics were estimated by combining passenger surveys conducted aboard the QE2, and "various other" demographic survey sources, including CLIA.
A Cunard spokesperson said "Those percentages are not right for the whole industry, they probably just reflect the QE2 passenger profile, and even there they sound a little stretched."
James Godsman, President of CLIA, said his organization's data does not get into the types of spending habits quoted in the kit, but concentrate mainly on age and income. Godsman said "We know the average cruise passenger makes more than $25,000, and our figures for that age category (30 to 59) are more like 50 percent, not 83 percent," he said.
Spokespeople from NCL, Admiral, and Carnival, whose ships are mentioned in the media kit as being "selected when programming begins," said the numbers even were quite overblown. According to their comments, the average cruise passenger is not nearly as affluent, young and educated as the SSN media kit claims. "I don't think even Sea Goddess passengers would fall into their profile," said one executive.
William Kaiser, Vice President Marketing with SSN, admitted the company's media kit may be exaggerated as all media kits tend to be, but said this doesn't mean cruise passengers are a poor audience for upscale product advertising. "So they may not all buy oriental rugs, that's a matter of cultural taste, but it doesn't mean they can't afford an expensive automobile," he said.
Kaiser said his company has sold commercial time to five advertisers, including two auto makers, a credit card company, a beer company and a telephone company.
Interested Lines Waiting
When SSN publicly announced its intentions at a news conference in early April, the company promised programming would begin by June, when a public offering of its stock would take place raising the necessary capital to begin operations. The public offering has not gone through yet and regular calls to the company this past summer by CIN and interested cruise lines have all met with the same response "We are still waiting (for the public offering), it could be any day now."
A preliminary prospectus said that SSN has no clients as of yet. A spokesperson at Admiral Cruise Line said the company is interested and may sign down the road, but has adopted a wait-and-see attitude. The Stardancer is mentioned m the media kit as a "selected" ship.
Carnival is still waiting. "Since trying to get our support over a year ago, they still have nothing concrete. No product," said Roger Blum in Carnival's operations department. "We are interested, but it's up to them to give us the product. I called them last week and heard the same thing, that they are still waiting," said Blum.
A spokesperson at Ainbinder & Co., the securities firm underwriting the deal, said the stock is expected to go on the market at $5 per share by the end of September.
Carnival's Jubilee and Celebration are both mentioned in the media kit as selected cruise ships for SSN's programming. Blum said both ships are equipped with the shipboard receiving system manufactured by Sea Tel. Currently, most cable signals are scrambled, however, and the Sea Tel equipment is now useless until either SSN comes through or problems connected with cable companies selling descrambling devices to ships in international waters can be overcome.
When scrambling became a problem for Carnival's Jubilee, said Blum, Sea Tel told him that programming would become available soon through SSN, a new company. For all intents and purposes, the two companies seem to be working together to bring cable to cruise ships. According to Kaiser, Sea Tel is a stockholder in SSN.
Lines Expected to Sign
Kaiser is firm on the October delivery of his product. "We are fully operational and geared up to start as soon as the money from the offering comes," he said. He also said SSN has just signed a contract with Turner Broadcasting System Inc., to use that company's Cable News Network news broadcasts as part of its programming. He added he expects about ten lines to sign, among them Princess, Exploration, Holland America, Sitmar and Home Lines, in addition to the other lines mentioned here.
Home Lines, which just announced it would offer a shipboard magazine containing advertising to its passengers soon, has postponed signing. "The concept is good and it's to our advantage to provide passengers as much as possible," said David Sutherland, Vice President, Marketing Development and Planning. "But at the present time, we won't sign because we don't want to subject passengers to too much advertising. If it starts to bother people, then advertisers much either," he said.
Cruise lines rebroadcasting SSN's programs will it won't help be paid a base fee of $1,000 per month, and can earn additional money for promotions.