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Disney to pull movies from Netflix, plans own streaming service

(Reuters) - Walt Disney Co (DIS.N) will stop providing new movies to Netflix Inc (NFLX.O) starting in 2019 and launch its own streaming service as the world's biggest entertainment company tries to capture digital viewers who are dumping traditional television.

Disney's defection, announced on Tuesday alongside quarterly results showing continued pressure on sports network ESPN, is a calculated gamble that the company can generate more profit in the long run from its own subscription service rather than renting out its movies to services like Netflix.

In turn, Netflix and rivals such as Amazon.com Inc (AMZN.O) and Time Warner Inc's (TWX.N) HBO are spending billions of dollars to buy and produce their own content and stream it straight to consumers.

Disney's entry into a crowded subscription streaming market and the cost of technology to support its own online services could weigh on earnings, Wall Street analysts said.

Disney stock fell 3.8 percent in after-hours trade. Shares of Netflix fell 3 percent.

The new Disney-branded streaming service will follow a similar offering from ESPN that will be available starting in 2018, the...


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