SAN FRANCISCO -- Forget Hallmark. Personalized photo holiday cards are hogging all the mantel space this month. Digital photography, easy-to-use websites and advances in printing technology have fueled double-digit growth for photo cards, despite the rampant popularity of online photo sharing.
"Especially at the holidays, most people like getting cards in the mail," said David Haueter, associate director of the consumer and professional imaging group at research firm InfoTrends. "It's not the same when you get an e-card."
His firm predicts that U.S. consumers will spend nearly $450 million on photo cards this year and that the market will see robust growth for the next few years.
Although three big companies -- Shutterfly, Snapfish and Kodak Gallery -- dominate the market, there's still room for plenty of smaller players.
Tiny Prints, a company that emphasizes high-quality printed products, including photo cards, stationery, calendars, photo books and mounted prints, exemplifies the explosive growth.
The three founders started it 6 1/2 years ago with their life savings of $10,000 and say they have been profitable from Day 1. Tiny Prints has grown to have 1 million customers -- and 250 full-time and 200 part-time employees -- without spending any outside money. (It has received venture capital, but has not spent it.)
"In 2003 we saw that a major revolution should and could happen in the on-demand printing space with the convergence of key manufacturing and Web technologies," said Tiny Prints CEO and co-founder Ed Han. "That was a space passed over in the first dot-com boom."
He and his partners, Kelly Berger and Laura Ching, were also paper aficionados.
"I firmly believe certain communication is done better in writing and asynchronous" rather than online, Han said.
Tiny Prints' initial focus was birth announcements. Hence the name, which refers both to tiny newborns and to the company's underdog size at inception.
But these days, Tiny Prints isn't so small. At this time of year -- the biggest season for all cardmakers -- it has 28 Hewlett-Packard Indigo digital printers -- industrial presses the size of a Ford Focus -- churning out printed materials at the rate of about 1 million cards a day, Han said.
Han said two things set Tiny Prints apart from competitors: craftsmanship, which includes stylish designs and high-end paper, and lots of customer service.
It often contacts customers about their orders to suggest improvements. "We intercept those files in the middle so we can give them some love," Han said.
Becky Peterson, a Menlo Park, Calif., radiologist, has used Tiny Prints for about 3 1/2 years for her children's birth announcements, Christmas cards and address labels.
"The customer service is amazing," she said. "I placed an order for cards and two minutes later received a phone call from a designer asking me if I wanted the photo edges to be asymmetric or not -- and it was 9 o'clock at night. I was extremely impressed by their attention to detail."
Despite being a business centered on paper, Tiny Prints incorporates digital features. Customers automatically get a digital RSVP service to accompany any invitation orders. This year all holiday cards come with a free hosted website that provides a simple template where families can upload 50 photos to share.
Unlike printing of digital photos, which is a commodity business with razor-thin margins, specialized printed products such as cards, calendars and photo books are much more lucrative, said Chris Chute, manager of digital imaging research for IDC. He and other experts said the key for a company like Tiny Prints would be spreading the word about what makes them stand out.
"If you can hook into some positive viral effect, you can carve out a nice business for yourself," Chute said.
Although younger consumers eschew printing and do everything online, that changes once they have children, he said.
"No matter what your generation is, as soon as you get older and start a family, that's when all this photo-publishing starts to kick in," Chute said.
(E-mail reporter Carolyn Said at csaid(at)sfchronicle.com."
(Distributed by Scripps Howard News Service, www.scrippsnews.com.)
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