China Demands Shutdown of DisneyLife Service (Report)

The sudden suspension of DisneyLife comes amid a crackdown in China's digital media space.

DisneyLife may be coming to an untimely end in China.

Chinese e-commerce giant Alibaba Group and Walt Disney Co. announced a multi-year licensing agreement to bring the over-the-top (OTT) service to Chinese subscribers in December.

But China's media regulators have already demanded that it be shut down, according to The Wall Street Journal.

Alibaba Group says DisneyLife is "down for an upgrade" and that it has issued refunds to subscribers. But according to the Journal's sources, China's media regulators requested the suspension.

An experiment in cable unbundling, DisneyLife allows users to connect directly to Disney content, including films, cartoon series and games. All the service requires is an internet connection and a special Mickey Mouse-shaped digital device, which Alibaba began selling in China in December for $123 (799 yuan). The service launched in the U.K. around the same time last year.

The first quarter of 2016 has brought a tightening of control to China's digital media sector. In March, Beijing introduced potentially stringent but vaguely worded restrictions on online publishing, particularly by foreign firms.

Last week, regulators required Apple Inc. to shutter the iBooks and iMovies components of the iTunes store in China. Apple says it hopes to get the services reinstated soon.

The sudden closures could be an ominous sign for the technology and entertainment giants, which have both achieved considerably more market access in China than their competitors. Disney is set to unveil its $5.5 billion Shanghai Disney Resort in June, and Apple has reported strong sales for the iPhone in China over the past two years. Both companies have emphasized to shareholders that China is integral to their future growth.