CHICAGO – Consumers looking to send electronic greeting cards may now have to reach for their credit cards on American Greetings Corp.'s Web sites.
The largest publicly traded U.S. greeting card company began last week to require customers to buy a one-year subscription in order to send some electronic greeting cards, a service that was previously free, David Poplar, a company spokesman, said on Monday.
The move is part of a trend by Internet companies to charge for certain content and services as they try to boost revenues amid a sharp downfall in advertising.
Customers will have to buy the one-year subscription in order to get access to birthday and holiday cards, Poplar said. The subscription rate is $19.95, but the company is currently offering a charter subscription for $11.95, he said. Some cards will still be available without a subscription.
"Generally the everyday, 'thinking of you' greeting will be free," Poplar said.
Customers who click onto the www.americangreetings.com Web site will find a notice featuring cute cartoon animals that says: "In appreciation of years of loyal service, we want to give our characters what they always deserved. Some of our characters will always be free, but to keep the critters happy (hey, even bears need honey!) we must now charge a small fee for unlimited access to our most popular greetings and features."
Other American Greetings-owned sites, including www.bluemountain.com, contain similar notices.
Cleveland-based American Greetings, the largest electronic greeting card company, has been expanding its online business through acquisitions, including the $35 million purchase of Bluemountain.com earlier this year.
But the move to charge for cards sets the company apart from other online card providers.
Top competitor Hallmark Cards Inc. plans to keep its online greetings free.
Spokeswoman Kathi Mishek said Hallmark's business model has relied on the cards to bring customers to the www.hallmark.com Web site, where they can purchase other gift items, as opposed to relying on advertising revenue.
Online entertainment network eUniverse Inc. also plans to keep offering cards for free on its www.flowgo.com site, though it will start charging a fee for other features on the site, said Joe Varraveto, chief financial officer of eUniverse.
"Basic greeting cards for the foreseeable future we intend to have as a free service to our users," he told Reuters in a brief interview.
American Greetings shares were up 63 cents at $13.81, a rise of 4.8 percent, in early afternoon trading on the New York Stock Exchange. Since Sept. 11, the stock has risen 16 percent, outperforming the Standard & Poor's 500, which has been about flat.
Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox