SIRIUS GOAL IS TO BE RETAILER-FRIENDLY—NEW CEO CLAYTON
Five years to week after departing CE industry, former RCA veteran Joseph Clayton Tues. assumed pres.-CEO post at Sirius Satellite Radio and told us in interview that learning “how to be retailer-friendly” would be company’s top priority as it prepared 3-city commercial launch Feb. 14. “We'll be putting on a full court press for CES,” Clayton told us. “First and foremost we have to learn how to be retailer- friendly.” Aftermarket sales of digital radio will be most important prong of Sirius’s strategy for 2002, he said, echoing letter and spirit of strategic plan expressed earlier by other Sirius executives. OEM factory build-in of receivers by automakers is priority that will follow later.
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Consistent with launch plans, Clayton said Sirius would have series of regional rollouts much as RCA did when he introduced DirecTV program there. Sirius launch is scheduled for Feb. 14 in Dallas, Denver and Houston -- and Clayton hinted possibly one more, to be announced at CES in Jan. “We'll take a regional approach and try different offers at different times and places to learn price sensitivity as we did with DirecTV,” he said. “We're going to make the product very consumer-friendly, and work hard on that with our retailers as I've done with any product where I've ever been involved.” Clayton said he took Sirius car radio for shakedown on recent trip totaling 14 hours: “I wanted to make sure this thing really works before I took the job.”
Asked about competitive challenge posed by rival XM, which says it’s available nationally on same retail store shelves for which Sirius will vie for space, Clayton said: “The market is in its infant stage and no one is going to get a big lead here and take over. You can look at it financially and believe we're at a competitive disadvantage because our content is commercial free, so we don’t have revenue from that. But no commercials is a customer benefit that you bet we'll be emphasizing.”
Other strong point, he said, will be Sirius’s relationships with retailers and vendors, biggest asset that company said Clayton would bring. “In retail we'll have a managerial advantage, and the same will go for dealings with our hardware vendors,” he said. To accomplish that, Clayton plans to recruit CE industry veterans, including former colleagues from his RCA/Thomson days. “There’s going to be a few gray-haired guys around here,” said Clayton, who is 52. As for $350 million cash that Sirius has said it has on hand and would be sufficient to take company through most of 2002, Clayton said: “We'll use it judiciously through the regional rollouts, then ramp things up. I think with all we've got going for us, we'll get new investors.”
Since resigning from RCA parent Thomson after Thanksgiving weekend in 1996, Clayton was CEO of Frontier Corp., Rochester, N.Y., telecom acquired by Global in Oct. 1999, then was vice chmn. of telecom provider Global Crossing. He said he would remain on Global Crossing board and now was in transition period of wrapping things up there: “Hey, I'm still a big shareholder there. I want to leave that place in good shape. Operationally, we are in good shape.” Clayton said he was happy to return to CE industry, where he spent entire career at RCA. “I feel I'm really coming back home, and it’s exactly what I needed. The telecom business was getting kind of hairy.”