Vice and HBO announce content partnership

HBO moves into news
HBO moves into news   

In a partnership that elevates upstart Vice Media, and brings HBO into the daily news business for the first time, the firms are announcing the most expansive content deal for either company. HBO is making Vice, known for an edgy youthful approach, its news source, both on its linear TV channel as well as its new streaming, over-the-top service, HBO Now, launching early next month.

This is a key move for HBO to go after Vice's younger demographic, especially as its new stand-alone HBO Now targets those consumers who don't pay for a cable or satellite TV bundle, a group which likely overlaps with Vice's younger demographic.

Most notably, the two media companies are launching a daily Vice newscast—five half-hour shows per week, 48 weeks per year. HBO is extending Vice's weekly documentary series on HBO by four years, and expanding it from 14 to 35 episodes a year. HBO is also committing to 32 Vice-produced specials over the next four years.

And all this new Vice content will be front and center on HBO Now—there will be a Vice-branded channel. The question is how many new subscribers this deal might help add. Vice has made headlines and drawn millions of viewers with shows that take an unconventional approach—including embedding a correspondent with ISIS, and sending Dennis Rodman, with a documentary crew, to visit with Kim Jong Un in North Korea.

Last year, Vice closed a $500 million financing round—half from Disney and Hearst through A&E, half through TCV—valuing the company at more than $2.5 billion. The new deal certainly boosts Vice's valuation, and sets it up further for an IPO, which CEO Shane Smith is considering. And in 2013 Vice sold 5 percent to 21st Century Fox and launched Vice Films, a joint venture to produce and distribute feature-length films.

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And Thursday's news is just the latest in a series of deals. The media company partnered with Live Nation to launch an online destination for original music programming. And it recently joined with Canada's Rogers to build and launch new digital channels for the media company. And earlier this year Vice partnered with Snapchat's new "Discover" content offering, distributing its news and entertainment in the fresh format.

In addition to these media deals, Vice also has an advertising business—providing its partners with branded and native content, and digital ads through its publisher network.

CNBC has an exclusive interview with Smith, coming up on the "Closing Bell."