ESPN Ends Game for 3-D Channel for Now

Updated June 12, 2013, 7:52 p.m. ET

ESPN Ends Game for 3-D Channel for Now

By CHRISTOPHER S. STEWART

Television viewers like to watch big screens, really big screens—and even little ones. But so far, it seems, there aren’t too many who want to watch in three dimensions.

That is a conclusion at least that can be drawn from ESPN’s decision disclosed Wednesday to pull the plug on its three-year-old ESPN 3D network, citing “low adoption of 3D in the home.”The channel will stop broadcasting by the end of the year, according to a spokeswoman.

Like two other 3-D channels created in the 2010-11 period—by DirecTV DTV -2.00%and by a consortium of Sony Corp., 6758.TO -3.50% Discovery Communications Inc.DISCA -0.41% and Imax Corp. IMX.T -2.15% —the ESPN channel launched amid a craze for 3-D entertainment sparked by the 2009 movie hit “Avatar.”

But the craze didn’t last. DirecTV shuttered its n3D channel about a year ago. A spokeswoman said Wednesday there weren’t enough customers to justify a full-time channel, adding that DirecTV maintains a 3-D pay-per-view option.

The numbers tell the story. ESPN 3D this year was expected to draw just 300,000 subscribers, estimates SNL Kagan. That is out of a pay-TV universe of around 100 million homes. ESPN is majority-owned by Walt Disney Co. DIS -1.27%

“If ESPN can’t make a go at 3-D, what network can?” said Brad Adgate, director of research at Horizon Media. “I don’t think this bodes well for 3-D…The buzz is gone.”

While 3-D technology promised a brighter age of more immediate and up-close TV, the market for the channels was limited: Only 8.5% of homes had 3-D television sets last year, according to research firm IHS.

Not only were the sets costly, at least initially; they also required people to wear clunky glasses to get the three-dimensional effect. That proved a turnoff, one retailer said.

“Originally the glasses were heavy and needed to be recharged; now they are much lighter and don’t have batteries, but the 3-D future hasn’t gotten here yet,” said Tom Campbell, a director at Video & Audio Center Inc., a chain of high-tech electronic stores in southern California.

Meanwhile, in Hollywood, interest in 3-D films also has cooled. Disney gave up on its strategy of re-releasing animated movies in 3-D after “Finding Nemo” and “Monsters Inc.” performed poorly last year, and box office at 3-D theater screens for such recent releases as “Star Trek: Into Darkness” and “The Great Gatsby” wasn’t high.

Still, many studios believe the format is still a worthwhile investment because it remains more popular overseas, particularly in developing markets like China.

For networks, running a 3-D channel isn’t cheap: 3-D programming in general is much more expensive to produce than traditional-format shows. In some cases the costs can be as much as double, according to people familiar with the matter. The ESPN 3D channel’s closure comes as the network, which faces sharply rising sports-programming outlays, has been cutting costs elsewhere, including through layoffs.

ESPN, which operates several cable channels in addition to its flagship, has produced about 380 other sporting events in three dimensions—from college football to golf—since the ESPN 3D channel’s launch, it said, adding that it could revisit the format “if or when 3D does take off.”

Still, there are some who haven’t given up on the third dimension. A person familiar with the Sony-Discovery-Imax group said it was still investing in its channel.

“Although we don’t comment on the activities of other companies, their decision has no impact on our business,” said a spokeswoman for the channel.

Shipments of 3-D sets are expected to grow this year. Some sets now don’t require glasses. Mr. Campbell of Video & Audio Center predicted that “once you don’t need to wear glasses, you’ll see 3-D come into its own.”