Los Angeles-based OTOY develops immersive entertainment experiences, whether that's through holograms, virtual reality or other technologies. Financial terms of the deal were not disclosed.
"We are now entering an era where it's not just cord-cutting and it's not just video on demand," OTOY CEO Jules Urbach told CNBC. "The screen itself is going away."
Though details are scarce, one confirmed beneficiary of the OTOY and HBO deal will be Jon Stewart. In November, Stewart and HBO had signed a four-year production deal with OTOY. At the time, OTOY said Stewart was to co-develop new technology that would help him rapidly produce short-form content multiple times a day, with additional projects in the work.
Urbach said that HBO and Discovery's investment goes past Stewart's project. He pointed out that both media and technology companies are looking at immersive digital content as the next evolution of media.
In October 2014, Google invested $542 million in Magic Leap, a digital visual technology company that is working on creating an eyeglass that would allow people to see holographic images in real world settings. It's seen as a competitor to Microsoft's HoloLens, another augmented reality device.
During this year's Tribeca Film Festival, almost 30 exhibitors presented VR content in a variety of ways that could encourage mainstream adoption of the medium. A report from Greenlight VR and Road to VR estimated that 136 million VR headsets would be sold in the U.S. in 2025.