A group headed by former Canadian Association of Broadcasters president and CEO Glenn O'Farrell is dangling a $97 million carrot in an apparent attempt to get broadcasters and the CRTC to embrace its plan to open up U.S. ad avails to Canadian advertisers.

Ottawa-based MédiadeNovo last week announced its "non-simultaneous substitution" (NSS) strategy, which it says would enable broadcasters to recoup at least some of the ad revenue lost from non-simulcast airings of U.S. programs.

The proposal comes as broadcasters and cable companies are locked in a protracted battle over broadcasting fees and support for local programming, with the CRTC trying to mediate a solution between the two sides.

MédiadeNovo chair and CEO O'Farrell said the NSS strategy adds another layer to an existing proposal projected to funnel an estimated $100 towards Canadian program development in its first three years.

While Canadian networks show most of the U.S. programs they've purchased in simulcast with their American counterparts–replacing the U.S. commercials with Canadian ads–occasional scheduling conflicts require them to air the shows either before or after their U.S. airdate, where they lose the benefit of commercial substitution.

In a December report prepared for the Canadian Film and Television Production Association, consultancy Nordicity pegged the amount lost by broadcasters because of this practice at $97 million a year–an amount validated by the Association of Canadian Advertisers.

According to O'Farrell, MédiadeNovo's so-called commercial insertion system–which provides the ability to store and insert content into cable companies' digital streams–is "readily adaptable" to offer NSS to Canadian program rights holders on a purely cost-recovery basis.

"We're not looking to make any money on that," he said. "We're prepared to use our technology with the collaboration of the rights holders and the BDUs [broadcast distribution undertakings] so they can make good on their program rights."

O'Farrell described the strategy as "an additional layer of program integrity measures" for broadcasters that, if implemented, would "fortify and optimize" the television marketplace.

"I don't suggest that $97 million is going to fall into anybody's lap overnight," he said. "This is something that's going to be worked at, but it's a step in the right direction of mitigating a large part of that."

Broadcasters have resisted previous attempts to open up the two minutes per hour of ad avails on U.S. cable channels such as CNN and A&E–which are currently used by BDUs to promote Canadian programming–but with the industry in the midst of a prolonged economic slump, O'Farrell believes the climate is right for such a venture.

The MédiadeNovo proposal calls for 70% of all ad sales from local avails to go toward Canadian program development. The company pegs sales at $30 million in its first year, reaching between $60 and $65 million a year by the third year.

"It all comes down to the reality of where this is going," said O'Farrell. "The end game here, we feel, is that local avails will be made for sale in Canada. Everybody is looking forward and saying ‘Where's the solution?' and here's a solution that kicks back 70% of every dollar sold on local avails back into programming."

Calls to the CAB and the Association of Canadian Advertisers were not returned by press time.