Clayton Explains His Decision To Join Dish

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Lake Maggiore, Italy

- Joe Clayton, president/CEO of Dish Network, outlined plans for his company during a one-on-one interview with Gary Shapiro, president/CEO of the Consumer Electronics Association (CEA), at the organization's 15th annual CEO Summit, here.

Clayton, the legendary RCA sales and marketing executive, former chairman of Sirius, former chairman of CEA and CE Hall of Famer, shared with attendees his decision to join Dish Network full time last May and replace founder Charlie Ergen as CEO, as Ergen retained the chairmanship.


Clayton explained he had been on the board of Dish's parent company EchoStar for two years and knew Ergen for 20 years. Clayton had been approached by Ergen a couple of times to be a full-time executive with Dish, but he finally relented when Ergen had his wife Candy approach him at a board meeting earlier this year and said, "We need your help."

Shapiro reminded the audience that Clayton was always a technology innovator. He was an early advocate that digital TV had to be FullHD and  when Clayton helped put DirecTV, now his key competitor, on the map in the mid-1990s, "We signed a 1 million units or one-year exclusive [for the RCA brand under Thomson], and we sold the 1 million in 10 months at $800 each. And Charlie Ergen was a DirecTV distributor at the time."

Clayton explained he took the job right after Ergen improved EchoStar's capabilities by buying the Hughes Network, gaining spectrum and buying Blockbuster.

"We have always been a technology innovator, first with the DVR. We bought Slingbox, and we didn't have as many places as we wanted to demonstrate our technologies," so Blockbuster fit the bill," Clayton said.

He explained, "We don't have as many retail floors to demonstrate our technology as in the past. Now we have 1,500 of them."

Dish is using those stores to go after the Latino market. Customers can go there to pay bills, and may have additional partners to get into the wireless business.

When asked by Shapiro about Ergen, whom Shapiro said had a "brilliant ... yet frugal reputation" - he is famous for having his executives sharing rooms on the road - Clayton cracked, "I told him that I wouldn't share a room with him. I told him I would be who I am. I am a jacket and tie guy, and I wouldn't donate money to Democrats."

He added, "I am here to change the wireless business. I flunked retirement [he retired after being chairman of SiriusXM], but I have changed businesses [and introduced technologies] over the years like VCR, satellite TV and radio, and HDTV."

When asked what his goals for Dish Network are for the next five years, Clayton explained, "I hope we are a growing [multibillion dollar] company. With the pay-TV market saturated, I want to develop the Latino market, convert the commercial market from analog to digital, broaden Blockbuster with partners, and with what I call the 'Ergen Wireless Company' become a top three or four player in broadband and wireless ... behind AT&T and Verizon."

Shapiro asked Clayton how the pending AT&T merger - whether it is successful or not - affects Dish's wireless and broadband plans. The Dish CEO quipped, "Part of our wireless play will be to have a telco partner - Sprint, Lightspeed, Metro PCS, Leap, Quest ... I hope I'm not forgetting anyone and mentioned all of them. We need a telecommunications partner."

Clayton mentioned Dish's Blockbuster Movie Pass, which began Oct. 1, and is available to Dish Network customers starting at $10 per month. It features what Dish described as a pay-TV industry first: a subscription streaming movie service bundle available on the TV or PC." Dish claimed the package "is unmatched by any other cable, satellite, telco or online streaming movie service."

Shapiro asked if this was a type of "Netflix killer," and Clayton noted, "Blockbuster will offer streaming real soon ... and add more service providers. The whole world is changing, and it is coming out of the Cloud."

Commenting on Netflix, he said, "It is a great company ... a force to be reckoned with." But he said the decision by Netflix to separate its DVD and streaming services "was a good one, the communication about that left a little to be desired," he said adding. the mea culpa, the apology about raising prices and making the separation move did put kerosene on the fire.

Clayton said Dish can provide movie, TV and subscription movie services via satellite, streaming or via the Cloud. "We can do all of the above - one company, one bill, one connection," he said.

When Shapiro asked about the future of subscription services and the theories about "cord-shaving" - cutting back on satellite or cable TV services by consumers or "cord-nevers," who are young people who just watch TV via the web - Clayton said, "The subscription [model] won't go away, it will be modified. We hope to be focused on what consumers want and not an 'all you can eat' [subscription] approach."

Clayton concluded with a mantra that has been his sales and marketing view since his days at RCA: "We have to provide ease of use, choice, variety and value."


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