Disney Movies Online will cease to exist at the end of the year, Disney announced today. The little-known Internet movie service will close as of December 31, said the company in an email to users and on the site. “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 separate statement Monday. “We made a business decision to close the service until we are able to provide the greatest value and experience to our customers”. Another reason for the closure was that Disney Movies Online didn’t generate the number of users that was expected and the service was costly to run, says a source. Movies were not available for rent or purchase on the service as of Monday morning. Launched in 2009, Disney Movies Online let users buy and rent films from the vast Disney library, including Pixar offerings. It also allowed users who bought Disney DVDs or Blu-ray discs to stream movies online; it did not allow movies to be downloaded for offline use or be watched in a non-browser format. No launch date has been set for the more flexible Disney Movie Anywhere system, which the company has been developing in the past year. Here’s Disney’s statement on its shuttered site:

Disney Movies Online is closing on December 31st. As part of this change, purchases, upgrades, and Magic Code entries can no longer be made on the Disney Movies Online website. You can continue to stream your existing movies until December 31st.

You can still enter Magic Codes on DisneyMovieRewards.com, and Disney Movies Rewards services will not be interrupted. You can also continue to use your Disney member name and password to access and enjoy other Disney websites. In addition, if you purchased a Disney Combo pack with Digital Copy, your Digital Copy can still be transferred and watched from either iTunes or Windows Media Player.