360 viewer in unity, texture appears warped in the top and bottom

I am making a 360 viewer in unity, to view a 360 photo I used to have a cubemap attached to a skybox, and it worked great. But the weight of the cubemaps forced me to switch to textures.

All of the 360 viewer tutorials say to just put a sphere with a shader on it, and put the camera inside. When I do this, it doesn't work very well, because when I look to the top or bottom, I see the image warped like so: (The chairs are suppossed to look normal)

It did not happen when I used a skybox.

Does any one know why is this happening?

Thank you very much!

The shader you choose does not handle equirectangular distortion very well. At the poles (top and bottom) of the sphere much image information has to be mapped on very small space which leads to the artifacts you are seeing.

You can write a specialized shader to improve the coordinate mapping from your equirectangular image onto the sphere. At the Unity forums a specialized shader has been posted.

Shader "Custom/Equirectangular" {
    Properties {
        _Color ("Main Color", Color) = (1,1,1,1)
        _MainTex ("Diffuse (RGB) Alpha (A)", 2D) = "gray" {}
    }

    SubShader{
        Pass {
            Tags {"LightMode" = "Always"}

            CGPROGRAM
                #pragma vertex vert
                #pragma fragment frag
                #pragma fragmentoption ARB_precision_hint_fastest
                #pragma glsl
                #pragma target 3.0

                #include "UnityCG.cginc"

                struct appdata {
                   float4 vertex : POSITION;
                   float3 normal : NORMAL;
                };

                struct v2f
                {
                    float4    pos : SV_POSITION;
                    float3    normal : TEXCOORD0;
                };

                v2f vert (appdata v)
                {
                    v2f o;
                    o.pos = mul(UNITY_MATRIX_MVP, v.vertex);
                    o.normal = v.normal;
                    return o;
                }

                sampler2D _MainTex;

                #define PI 3.141592653589793

                inline float2 RadialCoords(float3 a_coords)
                {
                    float3 a_coords_n = normalize(a_coords);
                    float lon = atan2(a_coords_n.z, a_coords_n.x);
                    float lat = acos(a_coords_n.y);
                    float2 sphereCoords = float2(lon, lat) * (1.0 / PI);
                    return float2(sphereCoords.x * 0.5 + 0.5, 1 - sphereCoords.y);
                }

                float4 frag(v2f IN) : COLOR
                {
                    float2 equiUV = RadialCoords(IN.normal);
                    return tex2D(_MainTex, equiUV);
                }
            ENDCG
        }
    }
    FallBack "VertexLit"
}

Again, it's not my own code but I tested it on android devices and as a standalone PC version. It results in very smooth poles.

Please note: This shader does not flip normals of your sphere. So if you want your camera to sit inside the sphere you have to invert its normals with a 3d program or with the shader. Try adding Cull Front after line 9 above and the shader will apply its texture to the "wrong" side of the model.