- Disney is pulling its catalog from Netflix.
- Disney is launching its own streaming service.
- Shares of Netflix are diving on the news.
Netflix is down big after hours following Disney's announcement that it will pull its library of content from Netflix.
Disney said it will launch its own streaming service in 2019 and will also launch a separate dedicated streaming service for ESPN content as early as next year.
Disney CEO Bob Iger said the new service will include Disney Pixar movies, a "significant amount of Disney products from the studios over time" and a library of television content. "We're going to make a significant investment in original Disney-branded television and motion pictures for just this platform," Iger said.
Netflix shares were down more than 4 percent as of 4:16 pm ET in extended trading.
The loss of Disney's library will be a big hit to Netflix given that it provides plenty of both new and nostalgic content. Wall Street might also be worried that other Netflix partners could follow suit, especially if Disney is successful in moving out as an individual player in the space.
CNBC reached out to Netflix for comment but a spokesperson was not immediately available.
— CNBC's Michelle Castillo contributed to this report.