The ad-funded streaming model in its present form was rejected as a viable future for the music and advertising sectors during a MidemNet keynote from David Jones, global CEO at Havas Worldwide and global CEO of Euro RSCG Worldwide.

Jones heads one of the world's largest communication groups and the first major advertising network to acquire a record label, Paris-based the Hours. He was interviewed by Billboard editorial director Bill Werde at the second day of MidemNet, the digital music conference that runs as part of the MIDEM trade fair and conference in Cannes.

Jones had plenty of positive things to say about the benefits to be gained from linking brands and music, not least in creating new business models for both the music and advertising sectors.

But the comments from such a senior advertising executive about the ad-funded services will surely have worried many in the audience, during a conference where executives from streaming services Spotify and We7 have been prominent on the panels.

"The key thing is I don't believe the interruption model will work," he said. "I think those models out there that say 'if you watch a commercial we will give you music for free,' I think will fail."

Jones compared the 'interruption' approach to TV advertising 30 years ago before remote controls when people "had to watch the ads," whereas today services need an "engagement model."

"Somebody will figure it out, and the person who does is going to make a lot of money, but I'm not a massive believer in the advertiser-funded models for music," he added.

Jones contrasted such approaches with the way his companies bring artists and brands together, which may once have been seen as selling-out but is "now actually a great, commercial way of making money."

He talked about "the power of social music," citing the Evian promo featuring roller-skating babies to a Dan the Automator remix of "Rappers Delight." The YouTube promo has now been viewed 95 million times globally, he said.

The advert was put together by BETC Euro RSCG, but it began with the music when Dan the Automator was commissioned to remix the classic hip-hop track, and fans were invited to submit their own remixes. Evian then publicly came on board following the buzz for the track - although it was always intended to marry the track with the brand and Jones said they "used music to give it [the campaign] credibility."

He estimated that it would have cost 100-200 times the amount they spent on that campaign to reach the same audience via a traditional TV advertising route. However, it will air as a TV commercial in the U.K. and U.S. next month, and Jones said the shift of advertising from TV to online is happening - but more slowly than media reports suggest.

The Hours, founded in January 2008, is controlled by Euro RSCG/Havas, which owns 51%. Jones announced that label, distributed worldwide by Universal, has now expanded into London in addition to Paris and New York. Its artists include Dan Black, Elbow (in France), Dada Life and Casxio.

Jones admitted he didn't want the Hours to become "massive," preferring to maintain it as an indie label - although he said the Hours has increased revenue by 300% since the acquisition. It also has a publishing division, but the overall strategy is about incorporating a music division within the advertising company.

"Putting music at the start is a massive opportunity," he said. He advised other labels - Euro RSCG/Havas continues to work with other music companies on advertising and branding campaigns - that in order to benefit from brand relationships, "being integrated on every level is critical."

For any skeptics, he added that "95 million downloads says that powerful music will excite the world's consumers."

Speaking to Billboard.biz after the keynote, Havas says, "We've seen the success of the Paris, New York model, we're one of the biggest advertising and communications groups within the U.K., we've got about 15-20 agencies, and we thought it made sense to continue the expansion with London."

The London division of the Hours has six staff and is situated in the existing Euro RSCG offices.

"The physical integration is a really key part," said Jones. "The fact you have people [Euro RSCG creatives and other staff] walking every day past the record label, it puts music much more at the front of their minds."

The label became well known in 2009 for its (pro bono) "Tck Tck Tck" awareness campaign for climate change with a cover of "Beds Are Burning" featuring Duran Duran, Mark Ronson, Jamie Cullum, Melanie Laurent, Marion Cotillard, Milla Jovovich, Fergie and Lily Allen.