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Spanning TV, From Color to Streaming

In an Exclusive Interview, Dish Network CEO Joe Clayton Reflects on a Career in the Vanguard of Television and CE Innovation 3/30/2015 8:00 AM Eastern

If you’ve been in the consumer-electronics business for any part of the past 40 or so years, it’s been hard to miss Joe Clayton.

 

Dish Network president and CEO Clayton, 65, who announced his retirement in February, started his career at RCA 42 years ago when color TV was king and the company was the market leader. He eventually led RCA’s marketing and sales of TVs, as well as VCRs in the U.S., and later in the Americas and Asia, for the brand’s new parent company, Thomson Consumer Electronics — but that’s only part of the story.

 

Years prior to joining Dish, Clayton helped launch the competition — DirecTV — in 1994 with the RCA brand at Thomson, in cooperation with Hughes Electronics.

 

After leaving Thomson in 1996 Clayton joined the telecommunications industry as CEO of Frontier Corp. and president of Global Crossing North America.

 

Clayton returned to the consumer-electronics business when he joined what is now SiriusXM Radio, first as CEO and later as chairman, helping to introduce new home and car hardware and signing content deals to radio contracts. These deals included contracts not just with numerous sports leagues, but with Howard Stern, the self-proclaimed “King of All Media.”

 

In his own words announcing his retirement, Clayton complimented his colleagues at Dish and more than a few from his RCA days: “We were able to launch the Hopper, DishNet and Sling TV; navigate two spectrum auctions; and deliver our customers throughout.”

 

In between all of this, Clayton found time to give back to the industry and his community. He’s been a longtime supporter of the Consumer Electronics Association (CEA), serving as its chairman and becoming a member of its CE Hall of Fame in 2008. He’s served as a member of the EchoStar board; a trustee of Bellarmine University in Kentucky, his alma mater, where he was named Alumni of the Year in 1996; and a member of the Dean’s Advisory Board for Indiana University’s School of Business.

 

A native of Louisville, Ky., and a devout Roman Catholic, Clayton and his wife Janet have been married for 30 years. They have five children — four girls and one boy — and recently welcomed their first grandchild into the family. Clayton sat down with TWICE editor at large Steve Smith recently to talk about his career and the industries he has served so well.

 

TWICE: Why retire now? And what are your proudest achievements at Dish?

 

Joe Clayton: I’ll start with the obvious. I’m getting kinda old, buddy! I’ll turn 66 in the fall but really, from a business standpoint, we just had a successful Consumer Electronics Show — the best I ever had. We launched Sling Television [which is] off to a great start. We just finished the wireless spectrum auction with great success. Most of the Auto Hop litigation is behind us. I just got a great management team here that I feel pretty good about, and it is time to let them grow.

 

We also got some major programming agreements behind us with Fox and CBS, and that bodes well for us in the long-term.

 

TWICE: Getting back from CES, I mentioned to a couple of millennials I know about the Sling TV, the inexpensive no-contract streaming TV service from Dish for any mobile or home CE device, and they want it now. How does that rank with other introductions you have been involved with?

 

JC: I think it will rank up there with the first and industry categories we have created over the past 40 years — up there with the VCR, maybe not HDTV but close, satellite TV, satellite radio. … I believe that [Sling TV] will be a real home run.

 

TWICE: More than once you have described yourself as an “RCA man.” You started with RCA in New York back in 1973. How did RCA help form your management style and approach as an executive and CEO?

 

JC: I think I got the training I needed at RCA, and I was fortunate to get a mentor by the name of Jack Sauter. I think most people today want a person whom they can trust, respect and learn from. That is what Jack Sauter was to me, and I hope I have been a “Jack Sauter” to a few people along the way.

 

I had a number of jobs [at RCA] from black-and-white TV merchandising manager, to color TV and VCR. I sold in multiple marketplaces.

 

The secret is understanding the marketing equation. Those last two feet [at retail], whether it is a service or a product, is still true. If you understand what the price, the volume, the mix, the consumers’ wants and needs, you can pretty much give the consumer what he or she wants. That’s what I have tried to do over 42 years. And I got all that as a trainee at RCA back in ’73.

 

TWICE: For those who don’t know who [longtime RCA executive] Jack Sauter was, can you explain to our readers his position he had in the industry and what kind of man he was?

 

JC: Well, you knew him, but he was 6 foot, 8 inches, and we called him “8-foot-6.” He was larger than life. And he basically did launch the color TV and the VCR industry. I don’t think anyone would argue with that. He had a track record for success I tried to draft on and learn from, and it is going to be hard to explain to people of today because there are not CEOs and executives like that in the consumer-electronics industry.

 

TWICE: In a statement about your retirement, Charlie Ergen, founder of Dish, said, “I think I’m going to be a better CEO than I was before, and part of that will be some of the things I learned from Joe. I never had a mentor myself.” How did hearing that feel?

 

JC: Obviously, it made me feel good, but we’re different people. We have complementary skills, not supplementary skills. I’m a marketing man and all about branding. He is more of a promotional and entrepreneurial man. Mix them together, and I think we made a pretty good team.

 

I think some of the highlights of being here four years are that I’m very proud that we have been able to commercialize the technology and branding it with the Hopper. It differentiated our product in the marketplace. We are in the sea of sameness in the pay TV industry today. You were with me down at Cowboy Maloney’s when we introduced [high-speed Internet product] DishNet, and when we introduced Sling TV. All of these are good for the consumer and are growth opportunities because pay TV is going to decline because the price has gotten so high.

 

We tried to bring together video, wireless, broadband all together. … That’s the future.

 

TWICE: The CE industry has been made up of some brilliant and volatile people over the years. Who were some of the more memorable characters who come to mind?

 

JC: Jack Wayman [founder of International CES] would have to be on the top of the list. Jerry Kalov [longtime industry executive] from a CEA perspective, both were mensches for me. I most certainly respected Jerry McCarthy when we had the many [color-TV market share] battles between RCA and Zenith.

 

I could certainly go on to mention so many people at RCA [circa 1970s to 1990s], from Bill Boss to Joe Donahue, Roy Pollack — those are the people who impacted me in my life.

 

TWICE: What about retail executives? JC: The best merchant I ever met was Walter Bruckart [longtime merchandising executive vice president] of Circuit City. He understood technology, and he understood how to add value to a product and not just cut the price. The easiest thing to do in the world is cut the price. All you need is a pencil with an eraser. Bruckart would take a product, add something extra to it and create a value for the consumer. Circuit City was never the same after he left.

 

TWICE: You are a major contributor to your alma mater, a private Roman Catholic institution in Louisville, Bellarmine University. You have honored your parents there with a plaza named after your father Paul and a scholarship after your mother Mary. How much of an influence were your parents on your life and career?

 

JC: Well, my father never went to college — he owned a retail liquor store — but he was a great husband and father. He was a man of faith who served his church. He expected you to do the right thing. I learned early in life that I didn’t need an ethics course to know that lying, cheating and stealing were wrong. And if I ever did any of those things, I would know there would be just compensation for not doing things the right way.

 

My mother is 91, and we just moved her to be closer to my brother and our family. She was the best damned cook I’d ever seen. And all she did was give. We call her the “prayer machine.” A day doesn’t go by that she doesn’t do a rosary or a novena. So if anyone in the family needs something, we go to my mother, or “Grandma Clayton,” as my kids call her, for her help.

 

TWICE: How has your Catholic faith shaped your business approach?

 

JC: I try to treat everyone the same way I want to be treated.

 

I hope they put on my tombstone: “He was tough, but he was fair.”

 

TWICE: In the 20th Anniversary issue of TWICE in 2006, we asked you about the most memorable technologies you have seen, and you mentioned satellite radio and satellite TV. What else would you include today?

 

JC: I will go back and say that time-shifting started with VCR. DVD, even though it seems like not much today, back in the 1990s it was a big deal.

 

With HDTV, I always said I had five kids before we established that standard! HDTV established the basic video quality we have today and gave birth to Ultra HD 4K that will be a difference maker as well … but you can’t have the hardware without the content, so we are waiting on the programmers to come up with a plethora of 4K content.

 

And I believe that Internet video is one of those great things that is coming down the pipe faster than most broadcasters and programmers want to admit, and consumers will vote with their wallets real soon. Ultimately, it will be a precursor to what is going to happen with wireless video and the Internet in the future.

 

TWICE: How important has CES been in your career in the introduction and development of new technologies? CEA calls it “the launching pad of new technologies.”

 

JC: I can’t speak for anybody else, but I’m a big proponent of CES. It depends upon what stage your company is in. At RCA, it was more about public relations. For Sirius, it was PR and building a [retail] distribution base. As we moved to Dish, it has mostly been about public relations and touting our technology. And we have had major announcements the four years I’ve been here [at Dish].

 

I’m a big believer of CES being a “launching pad,” to use their words, of new products, technologies and most certainly of categories and industries over the past 30 or 40 years.

 

TWICE: If you were asked some advice by retailers on how to market CE products today, what would you say?

 

JC: First of all, cutting the price doesn’t make you a marketer and it doesn’t make you a merchandiser. I don’t think there are many good ones left in the industry today.

 

A true merchandiser was like Bruckart, who found a way to take a product, add value, and differentiate it though customer service or a better warranty — you get the idea. Merchandising is hard; it is all about adding value. Today’s retail environment is all about cutting the price.

 

That’s why I tried to use the Hopper and technology to differentiate us in the marketplace to sell a better mix. All customers are not created equal. Some have a better credit score, some have higher incomes, some own your products longer. … You have to earn that loyalty. I’m not sure that is the case today.

 

TWICE: In your CE Hall of Fame speech in 2008, you said, “The success of our products is driven by one constituency, the consumer, not government mandates. The consumer is king and will determine our success in the marketplace.” One, do you still feel that way, and, two, what did you mean about government mandates?

 

JC: Well, anytime the government tries to regulate anything, they screw it up. I believe in free-market enterprise. If there is one thing that I hoped I taught Dish employees, it’s two words: “think consumer.” If you do what you believe is right for the consumer, you will make the right decision 99.9% of the time. I’ve always built my career around to try to give the consumer what he or she wants. You’ll win every time.

 

I’ve always tried to be consumer- centric no matter where my travels have taken me.

 

TWICE: A few years ago I asked you why you came out of retirement to join Dish, and you said, “My wife Janet said I had to go out and get busy .” One of your bios said that after college you were supposed to go back to Kentucky and sell whiskey. What will we expect from you in the future? Sell some whiskey? What are your plans?

 

JC: One, my wife Janet will still be the CEO of the house. And, two, I just had a grandson nine months ago, so I hope to spend more time with Samuel Clayton Stovall, and my youngest daughter will be leaving for college. So if my wife will still stand me, I hope that will free us up to a little traveling — you know how I love to hunt and fi sh. I will be trying to help my university as much as I can, whether it is time, talent or treasure. And I try to help people who love America as much as I do.

 

Snapshot: Joe Clayton

 

Career Highlights: Retiring as president and CEO, Dish Network, after a 45- year career; was president/CEO and later chairman, Sirius Satellite Radio; president, Global Crossing North America; president/CEO, Frontier Corp.; EVP, marketing and sales, Americas and Asia, Thomson SA; joined RCA in 1973 as a management trainee.

 

Industry Activities/Honors: Past chairman, CEA and CEMA; video division chair, Electronic Industry Association/Consumer Electronics Manufacturers Association; elected to the Consumer Electronics Hall of Fame, 2008; named CEA Digital Patriot, 2013.

 

Education: Is a trustee at his alma mater, Bellarmine University, which named him Alumni of the Year in 1996; earned MBA from Indiana University School of Business, where he sits on the advisory board and was inducted into the school’s hall of fame in 2008.

 

Personal: Lifetime member, International Bluegrass Music Association; has traveled throughout the world for hunting expeditions; enjoys watching University of Kentucky basketball and spending time with his family.

— MCN/TWICE Staff

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