Disney Movies Online to close at end of 2012

The Walt Disney Co. said it will pull the plug on Disney Movies Online, which has struggled to keep up with rival streaming and digital locker services since launching in 2009.

Site limited users to buying and renting movies from the Disney library and streaming movies they purchased on DVD or Blu-rays, similar to UltraViolet. A major drawback, however, was that users couldn’t download files for offline viewing or access them from mobile devices or videogame consoles.

Company is expected to replace Disney Movies Online with a more feature-filled Disney Movies Anywhere service.

“The digital environment is rapidly evolving and Disney Movies Online does not have the flexibility that many users today demand,” a Disney spokesperson said in a statement. “We made a business decision to close the service until we are able to provide the greatest value and experience to our customers.”

Disney is the only studio that does not support UltraViolet’s digital locker, which has 6 million registered users, up from 1 million in February, and is backed by most major retailers.

Disney Movies Online will officially shutter Dec. 31. Mouse will refund digital pic purchases made through the site. That may not amount to much, however, as Disney said the service never attracted as many users as it had hoped.

Disney chief Bob Iger is still keen on embracing digital platforms.

“The opportunity to monetize owned IP is only growing because of new technology,” Iger said during a conference call earlier this month to discuss the company’s third-quarter and full-year earnings results. “We will see growth in revenue and bottom line. It’s an exciting time for intellectual property owners.”

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