NEW YORK (AP) — ESPN's decision to shut down its 3-D channel by the end of the year is the latest sign the format won't revolutionize entertainment as the industry once hoped.
Troubling signs for 3-D have been on the horizon for the last year or so. ESPN 3D's audience ratings were below The Nielsen Co.'s measurable threshold, and in March, the Motion Picture Association said box office revenue for 3-D showings in the U.S. and Canada held steady at $1.8 billion in 2012. The number of 3-D films released in the period dropped by 20 percent.
"The ESPN decision is a sign that the 3-D ecosystem is not healthy," said Laura Martin, an analyst with investment banking firm Needham & Co. "It must be there's not enough demand for 3-D TV."
The sports network said there weren't enough viewers to make 3-D broadcasts worth it. It didn't say exactly how many viewers it had, but the number was "extremely limited and not growing," the network said.
Last year, an estimated 6 percent of TVs in the U.S. were able to show 3-D programming, according to the most recent data from research firm IHS Screen Digest. Even homes that have 3-D TVs don't appear to be using them very much, said IHS analyst Sweta Dash.
The lack of programming and the discomfort of having to wear special glasses could be contributing to the problem, she said.
"It's not convenient for people to watch for hours and hours with glasses," Dash said. "They get tired."
ESPN 3D launched in 2010 as one of nine 3-D channels that followed the release of James Cameron's blockbuster film, "Avatar." TV makers rushed to introduce 3-D sets as well. ESPN said at the time that it expected a "3-D tsunami" in the industry.
3net, a 24-hour-a-day 3-D channel that launched in February 2011 under the ownership of Sony Corp., Discovery Communications Inc. and Imax Corp., appeared to be unfazed by ESPN's announcement.
"Although we don't comment on the activities of other companies, their decision has no impact on our business," the venture said in a statement.
IHS's analyst Dash said there appears to be a bigger appetite for 3-D TVs overseas in markets such as China. IHS estimates that 49.6 million 3-D TVs will be sold globally this year, up from 32.8 million last year.
And home video sales of 3-D Blu-ray discs are still growing. IHS says it expects consumers worldwide to spend $668 million on 3-D Blu-rays this year, up from $416 million last year.