Netflix is slipping after Disney announced it will be ripping its movies from the platform

Netflix is falling after it was announced that it would be losing a big source of popular content.

In its earnings call after the bell Tuesday, Disney announced it would be pulling its movie content from Netflix's platform in order to begin its own direct-to-consumer service.

STOCK PRICE FOR NFLX

Full price information

Netflix fell after the news and is down 2.96% in early trading on Tuesday.

Netflix has said that desirable content is a big driver to growing its user base, so losing popular Disney content is a blow to the streaming giant. Disney's popular Marvel content is not expected to be part of the new Disney service and is expected to remain on Netflix even after the movies are pulled.

Disney said in its earnings release that the new service should be expected in late-2019.

STOCK PRICE FOR DIS

Full price information

John Janedis, an analyst at Jefferies, said the move simply reinforces how important Netflix's original content strategy is. Wall Street has assumed Netflix wouldn't be able to renew all of its content deals perpetually so making its own content will continue to be important for the company, Janedis said.

To bolster its original content offerings, Netflix recently made its first ever acquisition in Millarworld. The cult comic book company is known for the storylines behind movies like "Kickass" and "Kingsman."

Netflix is up 35.19% this year and is currently trading at $172.49.

NOW WATCH: Stocks have shrugged off Trump headlines to hit new highs this week

See Also:

SEE ALSO: Disney is falling after delivering mixed quarterly results and saying it'll ditch Netflix

Read Full Story

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.