Disney Closes Down OTT Movie Service, But Digital Locker, Multiscreen Strategy on its Way

It was a valiant, early-mover effort, but ultimately Walt Disney (News - Alert) Co.’s online over-the-top (OTT) streaming service did not make the cut at the House of Mouse. Disney Movies Online has now officially gone to the big magic castle in the sky, the company has announced.

However, there is plenty in the way of digital initiatives waiting in the wings to replace it.

The closure means that all purchases, upgrades and Magic Code entries are disabled from now on for the service, but users can still stream their existing movies through the end of the year via the Web portal.

Also, if users purchased a Disney Combo pack with a digital copy, the digital version can still be transferred and watched from either iTunes or Windows Media Player.

Otherwise, Disney is offering a refund for movies purchased or upgraded on Disney Movies Online.

Disney Movies Online was launched quietly in 2010 as one of the first studio-sponsored content-anywhere efforts, but it’s the “quietly” part that’s at issue. Few people even knew about the service. Making things more difficult is the fact that movie purchased there could only be viewed through the Web portal. There was no mobile access, no dedicated apps for various platforms, no gaming console or OTT box compatibility, and no ability to download films for offline viewing.

And, the service itself didn’t really offer much differentiation from what’s available on cable video-on-demand (VOD). Aside from deals with various pay-TV operators, Disney also offers its ABC television content via Hulu (News - Alert) Plus (of which Disney is part owner), and movies on the Amazon Prime online streaming service thanks to a deal the e-tailer made in the summer with EPIX that brings the studio’s popular Marvel Comics fare to the stable.

What Disney Movies Online did do, besides be early to market, is act as a launching platform for the studio’s ambitious digital locker bid, based on a technology called KeyChest. While all other major studios plus Microsoft (News - Alert), Intel and Best Buy have backed a competing technology, UltraViolet, Disney has gone rogue with its own version of a system that will allow users to buy digital copies of movies to store in the cloud and play back anytime and anywhere on compatible devices.

The launch of the streaming service and KeyChest together announced Disney’s entry to the digital content world in 2010.

While Disney Movies Online was a sort of foil for KeyChest digital copies, the media giant has something else waiting in the wings that promises to be much bigger. It will soon launch the Disney Movies Anywhere option (date TBD), which is likely to be much more flexible, multiscreen, multiplatform and geared for our ubiquitously connected world. 

As such, it could be a more suitable companion for getting KeyChest off the ground in a real way.

The studio noted that the existing offering simply wasn’t up to date. "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 to the Associated Press (News - Alert). "We made a business decision to close the service until we are able to provide the greatest value and experience to our customers."

Elsewhere in the world the company is already launching new digital shots across the bow. In Spain, for instance, it has teamed up with VOD website Wuaki.tv to launch a Disney-branded subscription VOD service featuring a library of content from Disney and Pixar.  

It also launched something similar on the ZON platform in Portugal earlier this month.