In the early days before the Internet bubble had burst, the online medium was all about eyeballs and page views. Business Models were hardly talked about since it was the days of freebies and portal mania. However when the internet bubble burst, Industry watchers finally realized that mere page views were not enough to sustain an Online Business. If an Internet Business were to succeed, Online Properties had to think beyond banner advertisements, they had to create a Business Model that would offer their visitors more value added services and move up the value chain, rather than offer freebies and get lost is the cyberspace for ever.
The approach to generate revenues from online greeting card sites has also changed. Now more Greeting Card sites have begun to generate revenue from subscription models, relying more on customers that are willing to pay for sending unlimited cards for a fixed fee. While this decision to abandon the free model and move to subscription based model is bound to reduce the size of online audience, it would definitely attract quite a core and loyal bunch of users which in turn would significantly increase Return On Investment for such Greeting card sites.
While the above case is true in case of an imperfect market condition where there is a demand and supply gap, the truth, is that a significant number of visitors would not be ready to pay a fee for a greeting card service that they would find else where for free. And since the nature of the service is such that it is easily replaceable and can often be substituted easily along with the fact that entry barriers to this Industry is quite low. Today Online Greeting Cards have become one of the most important and frequently used viral tool for corporates. Apart from attracting a very high traffic during the holiday season, it is often used by marketers to enhance their brand value, provide information about new product launches to their target audiences and communicate with their customers and clients. A Paid Model would be unable to replicate the success of the free model.
While a few paid cards do provide value additions like printing services,online scrap books, address books and gift vouchers and often tie up with other online Merchants, they are unable to communicate with the mass audiences. Free cards have attracted the mass markets and the traffic to free card sites have often skyrocketed during holidays like Halloween, Thanksgiving Christmas, New Year and Mothers day to name a few . During peak seasons more and more visitors flock to these free greetings site since they are reluctant to spend on greeting cards that are paid. Also, since most of them starts shopping for the holiday Season they would rather spend on a Paper Cards rather than paying for an Online Postcard.
In fact Greeting cards have been one of the most popular application on the Web, and they are popular because they are free. A paid services model in online cards, however rational business sense it might seem to make, would probably never be able to achieve the popularity of free card services. Online cards are primarily sent by audiences that are driven by the basic nature of services rather than value additions. It may be interesting however to see what percentage of subscribers actually renew their subscriptions every year. The industry is waiting to find out if the market for cards has indeed matured to support a subscription based model, or does free content still rule.
