Hilton strikes deal for interactive TV in hotels

NEW YORK (Reuters) -- Hilton Hotels Corp. and LodgeNet Entertainment Corp. on Tuesday said they struck a deal for LodgeNet to provide interactive television services to 220 Hilton hotels in the United States.

Financial terms of the deal were not disclosed.

In a joint statement, the companies also said they have formed a 50-50 joint venture company, InnMedia LLC, to offer high-speed Internet access via TV to hotel guests -- both Hilton's and its rivals'.

Hilton was also granted the right to buy up to 2.1 million LodgeNet shares, or more than 17 percent of its outstanding common stock, over the next seven years at $20.44 per share, the companies said.

Sioux Falls, South Dakota-based LodgeNet's interactive television service, enabling on-demand movies and music, Nintendo 64 games, Internet access on the television and other features, will begin being phased in during the fourth quarter and will continue as existing contracts expire, the companies said.

The agreement includes Beverly Hills, California-based Hilton's owned, leased and joint venture hotels in the United States, which covers about 70,000 hotel rooms, the companies said.

LodgeNet also will become the preferred provider of these services for Hilton's more than 1,600 managed and franchised hotels in the United States and Canada, the companies said. Hilton will market and promote the LodgeNet system to the owners of these hotels, which represent nearly 250,000 rooms.

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Hilton Hotels
LodgeNet Entertainment

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