Zoom is one of a handful of popular video conferencing software. This platform has managed to take a sizeable market share despite fierce competition from its more seasoned contemporaries. Nevertheless, if you’ve ever wondered how Zoom makes money, we lay it all bare in this post.
What is Zoom Anyway?
Zoom is a cloud-based video conferencing platform that allows users to conduct virtual meetings. The platform supports a wide range of virtual communication, including video, audio, live chats, webinars, and screen sharing. Its main features include:
- One-on-one meetings: This feature is arguably Zoom’s biggest success driver. The platform allows users to host unlimited one-on-one virtual meetings for free.
- Screen sharing: This feature allows users to share the contents of their screen with one or more people. Here, others can view what is on your screen in real-time.
- Group video conferences: This feature allows you to hold live group meetings.
- Video recording: Zoom allows you to record meetings and events to view later.
Zoom is particularly popular with organizations with fewer than 500 employees. As a result, the video conferencing platform enjoys a sizable market share despite fierce competition from other players, including Skype, Google Meet, and Cisco WebEx.
Some of Zooms’ most attractive attributes include affordable pricing, simplicity and ease of use, high-quality HD video conferencing, and its seamless compatibility with the most popular operating systems, including Mac, PC, iOS, Android, and Linux.
Zoom was founded by Eric Yuan and launched its service on 15 January 2013.
How Zoom Makes Money
Before we get to how Zoom makes money, let’s first find out how much it actually makes. Zoom has an impressive financial track record spanning several years.
Zoom brought in $331 million in annual revenue and $7 million in profit in 2018. In 2019, Zoom’s annual income shot up to $623 million and $21million in profit. This figure swelled even further in 2020, with the technology company raking in $2.1 billion annual revenue, translating to $671 million in profit [Source]. Zoom is currently worth over $100 billion.
Further, Zoom’s CEO, Eric Yuan, sits squarely in the billionaires club. According to Forbes, the founder-CEO is currently worth $12.6 billion, earning him the #54 spot on Forbes list of the richest people in the world.
So how does Zoom make all this money? The video conferencing platform operates as a “freemium” business model. Freemium simply means that the company offers basic features at no cost, but charges a premium for advanced or supplemental features. So although Zoom is free for up to 100 users for 40 minutes, you will need to pay a fee if you wish to get more from the video conferencing service.
To this end, Zoom has four main products where it makes its money. Here’s a breakdown of Zoom’s products and how the company makes its money:
Zoom Meetings is the company’s most popular service and is arguably Zoom’s claim to fame. If you’ve ever used Zoom before, you are probably familiar with this feature.
Zoom Meetings plans include:
Basic – This plan lets you host unlimited one-to-one meetings for as long as you like, free of charge. You can also host group meetings for up to 100 participants for free. But there is a 40-minute time limit for any meeting with more than two people in it. The basic plan also comes with the Private & Group Chat features.
Pro – Most corporate meetings go for longer than 40 minutes. Zoom is literally banking on this fact. So to reasonably host virtual corporate meetings, you’ll need a paid plan. The Pro Plan is the first option and costs $14.99/month/license. It is highly recommended for small teams.
With this plan, you can host group meetings for up to 100 participants. You can increase the number of participants up to 1000 people if you opt for the Large Meetings add-on starting at $50 per month. Either way, you’ll be able to host group meetings for up to 30 hours and even stream your sessions on social media. Additionally, you get 1 GB cloud recording with this plan.
Business – The Business Plan costs $19.99/month/license and comes with all the Pro features. Other additions in this tier include hosting meetings with up to 300 participants, managed domains, recording transcripts, company branding, and single sign-on. This plan targets small businesses. Again, you can opt for the Large Meetings add-on service if you wish to host meetings with more than 300 participants.
Enterprise – The Enterprise Plan costs $19.99/month/license and has all the features of the Business Plan. You also get extra features like unlimited cloud storage and hosting up to 300 participants.
For businesses looking for more effective meetings, Zoom Rooms is a great offering. However, unlike Zoom Meetings, where you can get started right away, this option requires a physical conference room and video conferencing hardware like a computer, tablet, mobile, camera, speaker, big screen display, and microphone.
This service costs $49/month/room, and you can create up to 49 rooms. In addition, you get a 30-day free trial just to make sure that you like the service before paying.
Zoom Rooms comes packed with features, including one tap to join meeting rooms, host up to 1,000 video participants or up to 10,000 webinar viewers, and calendar integrations with Google, Office 365, and Exchange.
Zoom makes it easy to migrate from existing vendors like Cisco or Polycom. You won’t need to purchase new hardware. Also, Zoom will help you set up your hardware from scratch if you don’t already have a functional virtual conference room.
Lastly, you can purchase your hardware from Zoom partners like Yealink, Poly, Neat, and DTEN. Zoom makes a commission when you buy hardware from its recommended partners.
Zoom Events & Webinar
The Zoom Events & Webinar platform allows you to host private or public virtual events and webinars. These are actually two different services depending on the kinds of events you want to host.
On the surface, Zoom Webinar is very similar to Zoom Meetings in terms of functionality. But, there are differences. For example, Zoom Meetings allow participants to share a screen. Here, all the participants can see each other and turn on their video and audio.
Zoom Webinar, on the other hand, is more of a view-only platform. Here, only the host and designated panelists can share their audio, video, and screen. The participants can interact with the host via chat, Q&A, and polling questions but cannot actively participate in the event via video. However, the host can unmute attendees.
In short, Zoom Webinar is not unlike your traditional auditorium or lecture hall setup. Only, the experience is virtual. Zoom Webinar lets you host between 500 and up to 10,000+ attendees. The price varies depending on the number of attendees. For example, the service costs $79/month/attendee. However, you’ll need to pay $349/month/attendee for up to 1000 people and $99/month/attendee for up to 3000 participants.
With this plan, you can host unlimited webinars for up to 30 hours per session. You also enjoy CRM and marketing automation integrations, cloud recordings, audience engagement reports, and monetization, among other features.
Zoom Events is an all-in-one event management solution. You get all the features in the Zoom Webinar package and more. This package is best suited for events like large sales meetings, corporate summits, and trade shows.
You can host free or paid events, customize ticketing and registration, and even create a chat lobby where attendees can network during or after the session. Some of the extra features you get here include conducting multi-session events, a dedicated events hub to organize and showcase your events and hosts, and event reporting.
Again, the price depends on the number of attendees. You can host between 500 and 10,000+ people with your subscription. For example, Zoom Events costs $88/month/license for up to 500 attendees. You’ll need to pay $440/month/license for up to 1,000 attendees and $1,290/month/license for up to 3,000 attendees.
Zoom’s primary offering, video conferencing, is designed for in-depth meetings. But, sometimes, you need to make a quick call without video. Zoom Phone allows you to make VoIP calls, complete with voice, messaging, conferencing, and video.
The best part about Zoom Phone is the quick transition from phone call to video. You don’t need to dial into a different conference bridge or hang up the phone to switch. This option also integrates with other Zoom products such as Zoom Meetings.
Zoom Phone plans include:
US & Canada Metered – This option costs $10/month/user. It supports outbound calling and extension to extension calling. This is a metered service.
US & Canada Unlimited – This plan costs $15/user/month. You can make unlimited calls within the US and Canada. There’s also an add-on option that lets you make unlimited calls to 18 countries.
Pro Global Select – Costs $20/month/user. This plan allows you to make unlimited calls in up to 40+ countries. Like all other plans, you can also make and receive calls from your favorite device or app.
How to Get Started Using Zoom for Your Organization
One of Zoom’s major selling points is its ease of use. Even users who are not particularly tech-savvy shouldn’t have difficulty figuring out how the video conferencing software works. So if you’re ready to use Zoom for your organization, here’s how to get started.
Step 1 – Sign Up for a Zoom Account
Head over to the Zoom website to sign up for your free account. You’ll find the SIGNUP button on the top-right corner of your screen. Click on the button to start the registration process.
You’ll be asked to provide a few details like your date of birth and work email. Then, Zoom will send an activation email to the address you provided when signing up. Simply click the Activate Account button in your email to create your account.
You’ll be redirected back to the Zoom website to complete the registration process. Here, you’ll need to fill in your first and last name and create a unique password for your Zoom account.
Zoom also lets you personalize your account by filling in your profile. For example, you can add a profile picture, first and last name, job title, department, company, and location. All this information will be displayed together with your profile picture when Zoom users hover on your profile.
Step 2 – Choose Your Plan
You can start using Zoom immediately. But, you’ll be limited to 40-minute meetings for sessions with three or more people. So, it’s better to go right ahead and choose your plan.
The best plan depends on what you’d like to get from the service. But, you can navigate to Plans & Pricing on the main menu at the top of your screen. Here, you can see the packages that Zoom has to offer, what’s included in your subscription, and your total price. Everything is straightforward, so you don’t need to worry about hidden charges.
Alternatively, you can skip this step if you’ll only be scheduling one-on-one meetings. There’s a 30-hour limit per meeting, which is more than enough for anyone. You can upgrade to a paid plan as soon as you need to schedule larger meetings.
Also, keep in mind that the basic plan doesn’t offer cloud storage. So, you’ll have to save your recorded meetings directly on your computer, using up valuable space.
Step 3 – Do a Test Meeting
Go to this link to perform your first test meeting. It will give you a feel of using Zoom before you conduct or join actual meetings. Also, you’ll be able to test your video and audio to avoid any disappointment when it really matters.
This feature lets you launch a meeting, just like you would under normal circumstances. For example, you may choose to be the only participant or invite other users. Additionally, you can test your chat and screen sharing features in addition to the video and audio.
Now is also a good time to audit your meeting space. Preferably, you should perform your test where you intend to host the actual meeting. While at it, listen out for distracting background noises like a squeaky fan, echoes, and beeping devices.
Similarly, check that there are no distracting or inappropriate objects in your background. Alternatively, you can use Zoom’s virtual backgrounds. Again, this is an excellent time to choose a background and test it before your actual first meeting.