As part of its ongoing penetration of the hospitality industry’s entertainment market, Tivus, Inc. announced recently that it has begun Phase II in its deployment of high-definition internet protocol television (HD-IPTV). The company follows a novel business model for hotel entertainment systems providers.

In March of this year, Tivus had announced what appeared to be a test installation in 300 rooms of a luxury Host Hotels & Resorts Inc. (NYSE: HST) hotel. With that deployment having gone well, the company has now placed its systems in 900 rooms.

Commented CEO and president Shiva Prakash on releasing the news, “We successfully completed testing of our ad-insertion technology in our lab — the core of our proprietary revenue sharing model… With nearly 900 rooms now live, Tivus’ inaugural installation has continued to satisfy hotel guests by creating a home-like experience; frankly, the response has exceeded our expectations.”

The company is focused on supplying hotels with entertainment profit centers beyond the staid, traditional areas of movies-on-demand as supplied by other companies. For example, one competitor, ETVi, a subsidiary of Ibahn Corporation of South Jordan, UT, offers hotels “revenue opportunity from: subscription TV channels; video & music on demand; Internet, Email & Radio on TV; business centre solutions and in-room, meeting room and public area high-speed Internet services,” according to its website. Though that description has been the prevailing business model, Tivus is torqueing up the game with a new approach.

“Another Tivus first, ad-supported IPTV allows hotels to migrate away from legacy video-on-demand systems,” said Prakash recently. “[Our] ad-supported, revenue-sharing business model capitalizes on new, fully interactive IPTV technology offering a completely interactive experience for the guest, such as ordering room or spa services, while turning the hotel’s entertainment system into a significant revenue center.”

The expanded development is a strong move for Tivus, since Host is partnered with a virtual Who’s Who list of luxury hotels worldwide and commands 62,000 rooms under its own name alone. For Tivus, which is already in a Doubletree hotel, the news is quickly generating fresh leads for the company.

CEO Prakash noted, “News of Tivus’ revenue sharing business model has traveled fast, as I have spent the last two weeks visiting certain hotel chains and properties that requested demonstrations. We are committed to our goal of providing hotel entertainment as a profit center to the world’s hospitality and gaming industries.”

The company also benefits from the quality of staff at the top. Prakash, formerly of International Business Machines (NYSE: IBM) and a veteran programmer himself, is joined by Chief Technology Officer Randall Francis. CTO Francis handled the first roll-out of on-demand video for a major supplier to Hyatt (NYSE: H), Sheraton, Regent, and other hotels in Pacific Rim countries, and is also widely experienced in other aspects of hotel servicing.

An important part of Tivus’ strategy, says its website, is its system’s ability to specifically target hotel guests with appropriate advertising. “Tivus protects, maintains, and anonymously remembers each guest’s unique settings and preferences and are securely available at any hotel property in the world with Tivus IPTV,” the site tells visitors.

As a special incentive to prospective clients, Tivus provides its HD flat-screen televisions at no cost. The Tivus IPTV system can also handle such guest benefits as scheduling shuttles, room and valet service, and even express checkout. Through the service, which is described as “fully customizable”, hotels are also able to present to guests their own marketing, such as discounts and travel packages.

With no apparent direct competition for such novel HD-IPTV service to luxury hoteliers, Tivus is well positioned for further growth.

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