Warner Bros. TV prexy Peter Roth has expanded his domain, launching a division devoted to lower-cost cable TV and reality fare.

Warner Horizon Television will operate separately from Warner Bros. TV, but both will report directly to Roth — who has sealed a new five-year deal to remain with the company.

Roth is still hammering out details on the new unit but is soon expected to name a separate team to run Warner Horizon TV.

Goal is to create smaller-budget scripted fare for cable TV, where Warner Bros. TV already produces hit shows such as FX’s “Nip/Tuck” and TNT’s “The Closer” — thanks to its production deal with the Shephard/Robin Co., which is behind both shows.

“There’s an opportunity that exists in the original, made-for-cable series space, and it seems to us that cable networks are hungry for programming,” Roth said. “The creation of Warner Horizon allows us to move aggressively into cable (but) it doesn’t represent a retreat from our traditional network production activities.”

New company will also take over the primetime reality business currently handled by Warner Bros. TV Group’s Telepictures arm (“The Bachelor”), which will revert to focusing on daytime and syndie fare.

“Collectively, we felt it was best if we realigned our primetime programming assets and put them all under Peter,” said Warner Bros. TV Group prexy Bruce Rosenblum, who announced the changes Wednesday. “This is not a reaction in any way to the job that Telepictures has done to date. They’ve created a great foundation.”

That means Roth — no stranger to unscripted product from his days of letting Mike Darnell loose at Fox — will be working more closely with reality producers such as “Bachelor’s” Mike Fleiss.

“I’m looking forward to re-entering a form I haven’t been in in a while,” Roth said.

Rosenblum and Roth said creating a separate company allows them to focus on creating an indie studio mentality at Warner Horizon while still handling bigger-budget projects at Warner Bros. TV.

“Hopefully, they will be more nimble, more flexible in creating new business models,” Rosenblum said, adding that Warner Horizon won’t necessarily be limited to cable.

“If there’s an opportunity to do a lower-budget scripted series at one of the five networks, we should do it,” he said. “We should be looking at opportunities for original content for the Internet, broadband and wireless as well. Wherever content is exhibited, this production unit should find itself exploring that.”

Still, Rosenblum said it was important for the studio to dive into the cable world given the sheer amount of original production going on there.

“There is a business model that is workable, and creative talent that has desire to produce for that medium,” he said. “The execs on our roster are looking forward to expanding their ability to sell content to those networks.”

Warner Horizon appears to be similar in form to 20th Century Fox TV’s Fox21 division, launched two years ago in a bid to produce lower-cost fare. Fox21 has already produced the Fox laffer “Free Ride” and is behind the TNT drama “Saved,” among other fare.

“This has to be where the industry is going if we’re to remain a healthy business,” said 20th Century Fox TV prexy Dana Walden. “I applaud Warners for taking this step. The business is not going to tolerate the rate at which production costs are escalating — it’s out of whack with profit opportunities.”

Execs rumored to join Warner Horizon include Telepictures execs David Auerbach and Brooke Karzen, as well as former Telepictures business affairs head Alan Saxe. Company is expected to formally announce its structure in the coming days.

As for Roth, the widely respected exec is now firmly in place at Warner Bros. TV beyond 2010. Exec, who joined the studio as president in March 1999, signed his last five-year deal in 2002.

Under Roth’s watch, Warner Bros. TV has led all studios in supplying primetime series — placing 33 on skeds this season, including 17 returning skeins. He’s overseen the development of hits such as “Two and a Half Men,” “The West Wing,” “Smallville,” “Without a Trace” and “Cold Case.”

“His relationship with network execs and creative talent are legendary,” Rosenblum said. “I’m anxious to see what he can now do in his expanded sandbox. Peter is the ideal guy to build these businesses from scratch.”

Roth said his decision to stick with Warner Bros. was a “no-brainer.”

“This is a company whose culture and history and whose methodology works perfectly for me,” Roth said. “I’m an executive, that’s what I do, and in terms of which company I’d like to work with, I can’t think of a finer or more supportive one.”

Before joining WBTV, Roth spent seven years at News Corp., including gigs as head of Fox Entertainment and of 20th’s production unit. Earlier in his career, Roth held senior posts at Stephen J. Cannell Prods. and ABC.