If we discuss video conferencing, the initial name that pops into our minds is that of Skype. Skype’, which was acquired from Microsoft at $8.5 billion back in the year 2011 together with Google Hangouts and then standalone services such as GoToMeeting. However, there are a variety of apps that have been developed over time to facilitate video conferencing. One of these is Zoom. Zoom has gained popularity in recent times during the lockdown time for online meetings and video conferences all over the world.

Zoom Video Communications Inc. (ZM) provides a first video communication platform used by millions of users around the world for business and personal use. It connects users via video phones, chat, and content sharing and compatible with many devices. Zoom’s meetings can accommodate as many as 1000 participants, while webinars can be scaled to 50,000. Zoom earns money through subscriptions.

How Does Zoom Make Profit

The former Cisco Chief Executive Eric Yuan founded Zoom in 2011 in San Joss, California. But the market was filled with Microsoft’s Skype, Google Hangouts and Webex from Cisco. So how did Zoom’s model compare to these rivals?

Particularly, Zoom, the video conferencing platform took the competitive advantage of people wanting to work from home, especially in the COVID-19 pandemic. The cloud-based conferencing software provides high-quality and friction-free video and audio chat with up to 100 participants during 40 minutes. For more extensive conference with more features, paid subscriptions are offered for $15-20 per month.

What Is The Process By Which Zoom Work? And How Do Zoom Earn Money?

As of 2017, there were more than 700,000 companies and 58 percent from Fortune 500 companies, and 96% of the most prestigious universities and colleges use Zoom.

In the wake of COVID-19’s locking downs Zoom reached a high of hosting over 300 million meetings a day on their platform , with more than 2.13 million app downloads daily for 2020 that’s how zoom’s owner make profit. Connecting students and teachers from over 90,000 schools in 20 countries, Zoom is able to sustain education via online learning.

As we have already mentioned, Zoom offers businesses and private users with video conferences and chat. The freemium business plan permits 100 participants to participate in time-based meetings for just 40 minutes.

The premium Zoom package provides users with greater numbers of participants, more timetables, and other advanced features. You can organize group meetings that can accommodate as many as 10,000 people simultaneously.

Let’s look at how Zoom earn money with its premium offerings as well as other services. 

1. Zoom Meetings and Chats

It is possible to host and join Zoom Meetings on your desktop, browsers, or mobile devices. Chat is an extended version of the application that lets you interact with groups, create groups, and exchange audio and text files, as well as image/text documents via Zoom.

As a user You have access to Zoom Meetings as a free or paid subscription. There are four different types of plans.

• Zoom Basic :

  It’s intended for a private meeting. This free version permits unlimited one-to-one meetings with 100 people for up to 40 minutes. Zoom doesn’t take extra charges fort this subscription.

• Zoom Pro:

   It’s suitable for small teams, costing $149.90/year/license or $14.99/month/license. It allows up to 100 attendees with unlimited group meetings, 1GB recording for each license, and social media streaming.

• Zoom Business:

   It’s suitable for small and medium businesses, costing $199.90/year/license or $19.99/month/license. It can host up to 300 guests Single sign-on, control domains and branding of the company. It also offers cloud recording transcripts as well as brand-named templates for email invitations. That’s one of the best way which zoom earns money from.

• Zoom United Business :

   This plan includes all functions that are included in Zoom United Pro. You will have unlimited call facilities in the US in addition to Canada. It can host meetings for up to 300 attendees.

• Zoom Enterprise: It has all the features of business, and more. And it’s the most featured and premium subscription from where Zoom earns money.

Thus the owner of Zoom makes money from Zoom Meetings.

2. Zoom Rooms and Work-spaces

Zoom Rooms can be described as systems for conference rooms that allow users ( typically large companies ) to conduct Zoom video conferences seamlessly.

Rooms are available for a 30 day trial for free. If you want to keep using Rooms after the trial expires, then you can purchase an annual subscription for $49 per room. The greater the number of rooms that organizations would like to connect to via Zoom Rooms, the higher amount of they’ll have to spend. For instance, to buy the plan that allows that includes 10 rooms, businesses will need to pay $ 490 per month. This is how zoom make money from rooms.

Suppose the clients are already using conference rooms in place with Polycom, Cisco, or Lifesize equipment. In that case, they are able to utilize the Zoom connector for conference rooms to begin Zoom Meetings directly through existing conference room equipment.

If they don’t have any existing conference rooms and want to purchase equipment from Zoom’s hardware partners, including companies such as HP, Lenovo & Logitech to mention a few. If required, Zoom also provides customers with assistance in installing their rooms for conferences, to name a few.

3. Zoom Events & Webinars

While Zoom Meetings along with Webinars offer similar functionality and features however, they do have some distinctions.

With Zoom Meetings, participants can use the same screen, switch on the audio and video, and be able to see the other participants. However Zoom Video Webinars permit viewers to only view the screen. The host has control over their views. Participants can engage with the host via Chat, Q&A, or even by responding to polling questions.

Furthermore there is a feature in Zoom Webinars hosts can turn off any participant if they want to.

Webinar licensing starts at $14.99/month and can be extended to $64,900.00 per year/license. We can easily make an assumption of  how much money does zoom make a year. Zoom webinar can accommodate the participation of up to 10,000 people starting with 100. Based on the type of license purchased and the number of participants is able to participate in the webinar via video in Zoom.

Additionally, Zoom acts as an marketplace for apps to earn money. Customers who are already customers can install their own applications such as Slack, HubSpot or Trello to improve the user experience.

However, Zoom also offers packages that cover various industries such as education, healthcare Finance, and Government sectors.

4. Zoom Phone

Zoom Phone makes the application to be a complete collaboration solution for companies and businesses. It has traditional phone capabilities inside the application, which makes Zoom an all-in-one solution for messaging, calling, and video conference.

Zoom Phone is a cloud telephone system that allows users to make speedy VoIP calls without the need for video. It uses the same tools available within Zoom Meeting. Zoom Meeting suite. The cost is $14.99 per host for a month which is $12.49 for each host monthly, which is billed annually..

Here are a few of the Zoom Phone features:

• Voicemail and call recording
• Call management with AI and route routing
• HD audio
• IVR and Auto-attendant to redirect calls

5. Zoom For Business

Zoom also operates the business-to-business (B2B) business model of revenue. They provide their services to four (4) sectors: Education, Healthcare, Government, and finance.

Over 700,000 companies and 58 percent from Fortune 500 companies, and 96% of the most prestigious US universities utilize Zoom in 2017. A few of these businesses and organizations include Fidelity, Capital One, Johns Hopkins School of Medicine, NIH, and the CDC.

Education: Zoom offers online classes for students in K-12 and higher education schools.

20 Students 149 and above: $7.50 per student/licence ($150 to $1,117.50 per month)

Health: Zoom plays an important part in the growth of Telehealth.

Small clinics and service providers: $14.99 per month

Larger enterprises: $19.99 per month

FAQ’s On How Does Zoom Make Money:

Does Zoom offer a free service to make use of to teach online classes?

Zoom is available for free meetings in 1:1 format for an unlimited amount of time. However, once we get to group meetings, zoom is free for only 40 minutes, after which you will have to pay a fee.

• IS ZOOM SECURE?

While it has a massive following, Zoom has been reported for privacy concerns and security fraud. The lawsuit claims that a lot of Zoom accounts and photographs and email ids were sold via the dark internet. Since users typically log in to Zoom by using a Facebook login, hackers are able to access their private data easily.

Zoom was developed with businesses in mind, which is why there is a expectation of more security and greater privacy. But, Zoom has come under scrutiny for the security and privacy concerns that have been surfacing in recent times. Zoom is being sued 17 times in the month of April that range from breaches of contract to securities over privacy violations , as well as false and misleading claims regarding the security and privacy practices of Zoom.

• Does Zoom Profitable?

Zoom was profitable in the year 2019 after it’s IPO on April that same year. In the course of the COVID-19 epidemic, Zoom witnessed a significant increase in its use, as working at home was the common place. Many educational institutions that had switched to online courses have also begun making use of the platform more frequently. The number of active users per day had increased to an astounding 300 million by the end of April. This is why Zoom stock increased from under $70/share to over $150 per share. In October the market cap surpassed the record of $140 billion.

• How Much Money Zoom Makes A Day?

Zoom earned an income of $622.7 million in the year 2019 and it increased to $671 million in 2020.  

• Are Zoom’s services only for business?

Zoom has recently started providing packages for important industries, including finance, education, health and the government sector. These packages help to increase productivity by making use of the equipment and resources that are already in use.

In addition, Zoom for healthcare aims to aid clinicians and paramedics keep up with the changing requirements of the field. With collaborative healthcare and telehealth becoming more popular, the requirement for an integrated communications system. This can be a significant step towards increasing the quality of care for patients while creating an environment for wellness by more effective internal communication.

Conclusion

Zoom has grown in popularity as today’s world has come to heavily rely on regular videoconferencing for essential operations–especially when you have to work from home. In the COVID-19 pandemic, Zoom became popular and eventually became the most popular video conferencing system. The quality of their video and audio streaming as well as their simple platform played an important part in making them an instant hit. How does Zoom generate revenue? They allow users to test out their products and services and convert them into paying subscribers to access upgrades. This kind of business model, coupled with price competition has allowed them to expand quickly. Zoom saw a net profit of 88% by 2020. Its current valuation is at $47 billion.