• by Hank Kim , Richard Linnett , July 20, 2006

Wanna know what we did this summer? Cannes, of course  the International Festival of Advertising. From the cozy Havas Café on the Croisette to the woozy Gutter Bar to the stunning Eden Rock, this was a business trip, believe it or not, with some notable sightseeing on the side. For instance: Irwin Gotlieb, CEO of GroupM, stopping to meet Fernando Rodes Vila, CEO of Havas  their first encounter. Or Michel Roth, CEO of Interpublic, lunching on the seaside terrace at the Hotel de Cap in Antibes by day and hitting the pavement with the Gutter Bar crowd by night. Or Clive Davis, music mogul, cruising off the coast in a yacht.

And Woody Allen  yes, the Woodman himself  checking into a room at the Hotel Martinez, with a window view of the beer-swilling creatives and other carousing advertising swells on the street below. Surely he didn't mistake this for the film festival?

And there was a touch of home beneath the Riviera palms as the Arnold us team hosted a barbecue lunch to toast client Jack Daniels at the Havas Café. For the first time during Cannes week, the daily tapas menu at the café changed. (MPG imported an incredible tapas chef and his team from Barcelona.)

"Tonight, it's barbecue tapas!" joked Arnold creative chief Ron Lawner, who commanded a plush corner couch, Cuban cigar in his jaw, sitting next to a man who seemed to be related to him  perhaps his brother? On closer inspection, it was clear they were not brothers, but they were related: The mystery man was John Staffen, creative chief of the New York office of Arnold. A barbecue buffet was spread out on tables in front of a screen that featured images of Arnold's Jack Daniels creative. Tables were decorated with Jack Daniels statues and for one day, Euro pop was replaced by hillbilly tunes.

The Havas Café, which our agency creates each year on a terrace next to a Dolce & Gabbana store, was also the scene of a very public embrace by the Havas tribe of Vincent Bollore, who made his first-ever trip to the festival (by plane, not by boat, as the press reported). For Havas habitués, the café was an oasis of sorts in the midst of a sometimes chaotic and confusing tide of hundreds of advertising people who flooded Cannes for the week.

Cannes was not all pleasure. Besides the business of handing out awards, some advertising people attended panel discussions and presentations. One presentation in particular at our café really brought the Croisette crowd back down to earth  and almost made us choke on our Mojitos.

An MPG research director from Spain named Sara de Dios Lopez presented the findings of a study she conducted in nine markets around the world. The subject? The future of TV. Sara's research indicated that in the long run, broadcast TV will rely less on ads for revenue and more on providing content to consumers through syndication and other distribution models. In other words, TV could evolve into a sort of packaged goods marketer, providing goods and services rather than selling ad space.

At least that was the conclusion we got from the presentation  full disclosure  after our second Mojito.

Of course, big networks and marketers in the u.s. haven't lost their enthusiasm for the 30-second spot, but the reality, according to Sara, is that they are preparing for change  hence the confusing array of digital content extensions (iPod, Webisodes, mobisodes, video-on-demand) paraded at the 2006 upfronts. The nets are covering their butts. And well they should: The 2006 primetime upfront ad market, according to reports, is down.

Europe is already way ahead of the game in developing the new "goods and services" model for TV. Zenith Media put out a study earlier this year showing that TV subscription revenue surpassed TV ad spending in Western Europe for the first time ever. According to Zenith, pay TV (cable, satellite, digital terrestrial, VOD, etc.) revenue rose 6.7 percent from $29.4 billion in 2004 to $31.4 billion in 2005, compared to TV ad spending, which rose only marginally, from $30.7 billion to $30.8 billion. Zenith predicts that by 2014, pay TV in Western Europe will produce 57 percent of all TV revenues.

Could the same happen in the States? Tune in and pass the Mojito. Gracias.

Hank Kim and Richard Linnett are directors at MPG Entertainment. (hank.kim@mpg.com and richard.linnett@mpg.com)