Walt Disney Co. is pulling the plug on MovieBeam -- at least for now.

The company plans to close its experimental video-on-demand service later this week in all three of its test cities. Walt Disney Co. spokeswoman Michelle Bergman said the shutdown is necessary in order to upgrade systems as the company seeks potential partners to explore MovieBeam's "next phase."

It is uncertain, however, when -- or even if -- the service will be relaunched.

The decision comes nearly two years after Disney unveiled MovieBeam in Jacksonville, Salt Lake City and Spokane, Wash., in a bid to create new revenue streams for its TV stations and establish a direct pipeline to consumers.

In contrast to services that use the Web or cable, MovieBeam uses television airwaves to load movies wirelessly into a set-top box, giving viewers dozens of on-demand titles from which to choose.

The venture, championed by then-strategic-planning chief Peter Murphy, faced doubts inside and outside the company.

Some studio executives feared the service could cut into Disney's lucrative home-video sales.

Murphy was removed from his powerful post last month and placed in an advisory job in a sweeping overhaul of his department.

Analysts say the service has faced a tough time getting consumers to buy set-top boxes to put on their already crowded TV sets.

It has also faced stiff competition from cable operators and online firms such as Netflix Inc.

"We always thought it was an uphill climb for a product you have to rent," said Josh Bernoff, principal entertainment analyst with Forrester Research Inc. in Cambridge, Mass. "There are so many ways to get movies cheaply."

Bernoff speculated that MovieBeam could reemerge as part of a satellite-television service or, alternatively, could be built into high-definition TV sets.

Richard Verrier can be reachedat richard.verrier@latimes.comor 1-800-528-4637, Ext. 77936.