The 9-Pointer Response to answering how does Zoom make money

how does Zoom make money

Ever since Covid-19 entered our lives, the ‘real-life scenarios’ have shifted categorically to the ‘virtual world scenario’. Facilitating this process to the core is – Zoom, the cloud-based platform for conferencing, where users can communicate remotely through audio/video/chat facilities. Undoubtedly as users, we highly benefit from its superior communication formats, but how does Zoom make money? It has its add-on, freemium and subscription-based models to fall back on.

Hold on! This write-up will acquaint you with more (upto 9 strategies of its revenue policies). Curated with the assistance of some of the experts from this domain, this will look into the finances of Zoom, its marketing strategies, and some business acumen. Start reading up –

How does Zoom make money – details upfront

#Just note – Zoom had a record-breaking 2.13 million downloads daily in 2020! As one of the best online connecting sources – it officially served over 90,000 schools in over 20 countries during the pandemic. 

Getting to the fiscal details now –

Zoom forms a triad in terms of its revenue earnings – the subscription service (the payments are taken on a monthly basis), add-on service, and hardware solutions. In 2020, its revenues were kept at $622 million, which rose to $2.65 billion in 2021. So, how does Zoom make money? Here it is –

#1. Zoom Meetings

The company’s core offering and the most used product from its range of assortments facilitate video-conferencing and sharing of content, URL, and chats via Zoom Chat.

Available for both personal and online group meetings, this format of digital assistance is priced at:

$14.99 (Pro license) and $19.99 (Business license).

how does Zoom make money
Image Credit: Money Inc

#2. Zoom Marketplace – OnZoom

This is Zoom’s marketplace for hosting online events – (both paid and free of cost). Here, even the ones who are attending can book a spot.

Currently, despite the potential – the company does not charge any fee for hosting. Rather – this is a mode of free advertisement that the company promotes.

#3. Zoom Phone Services

Another of the procedures from where the service provider earns some ‘real cash’. Launched in 2019, you can choose a calling plan or choose its prepaid option. You must want to know how does Zoom make money in this format? The plans are as follows –

  • The usual Pay as you Go – $10
  • Regional Calling (Unlimited) – $15
  • Local Calling (allowed in over 40 countries) – $20
  • International Calling (Unlimited) – $10

To all of these, some usage charges are levied on a per-minute basis. When it comes to the Prepaid plans – it ranges from $20 to $100 depending on the respective plans.

#4. Zoom Video Webinar

Offering the attendee bracket between 100 to 10,000 and more – this webinar could pinch your pocket somewhere within the range of – $40 to $6490.

#5. Zoom Hardware Rental

Adopting the business model of Hardware as a Service (HaaS) – Zoom rents out its hardware to customers. The amount ranges from $2.99 to $200.

#6. Zoom Rooms

Do you want a dedicated meeting environment in shared spaces? Zooms has Rooms (renting hardware from Zoom) at rates between $25 to $200.

how does Zoom make money
Image Credit: Clevertouch

#7. Zoom United

A package deal offering Zoom Meetings and Phone – offers the Pro facility at $25 and the Business facility at $30.

#8. Zoom For Business

Another key playing arena that will satiate your query of how does Zoom make money. Sticking to the B2B format and serving 4 industries – Finance, Healthcare, Education, and Government – it has specific plans for each domain.

  • Education – (a batch of 20-150 students, the rate is fixed at $7.50/ per student).
  • Healthcare – For smaller enterprises ($14.99) while larger enterprises ($19.99).

#9. Add On Plans

This has 5 add-ons:

  • SIP Room Connector ($49)
  • Audio Conferencing ($100 for general conferences, additional $10 for specific dial-ins)
  • Large Meeting (For a range of 500 to 1000 participants – the fee ranges from $50 to $90 on the lower bracket and $500 to $900 on the higher bracket),
  • Cloud Recording (starting at $40 for 100Gb, to $100 for 500Gb and $500 for 3Tb)
  • Premier Support (price not disclosed)

The Business Model of Zoom

To a great extent, the segment mentioned above has answered your query of how does Zoom make money? But how is this process carried out? As you scroll down this document, you will get the hang of the business model Zoom follows to reach its fiscal standards – a 369% rise in the last quarter of 2020. 

1. The Freemium Model 

One of the best economically accepted business models – the ‘freemium business model’ ensured that the users could get to use selected features of this teleconferencing app for free. Naturally – as the features enhance, so does the money – but given the list of positives, people do invest in the same – thereby making it a successful ‘crowd-garnering’ strategy.

2. The User-Experience is easy 

You already know that to use Zoom, you would not require to download the app (the app itself has multiple features not extended to non-subscribers). Therefore – it becomes important here to understand that the user experience of Zoom is of better quality since it includes non-subscribers with just an invite in the mail.

This benefit is not found in other conferencing apps – a business model that kickstarted bringing more crowds to the base of users (it increased from there).

3. Security is another key to their success rate 

Data theft is a reality in the virtual world. Zoom specifically guarantees you safety on its platform. From upgrading the app timely to fixing bugs and ensuring guidelines for cyber security – this factor makes people choose Zoom over its contemporaries.

how does Zoom make money

4. The diversification of the services 

Compared to Google Hangouts or Microsoft Teams – Zoom offers its audience – video-conferencing, telecommunication, webinars, virtual modes of business setups, a cloud-based phone system, and a hardware package. Clearly – it was a win from the start!

What to learn from Zoom’s business model

No invention to date has come without its share of criticism. The same was the story when Zoom CEO and curator – Eric Yuan shared his strategy to kickstart this platform in 2011.

With Skype and Microsoft tools already making a mark in this video-conferencing domain, a simple virtual communication app would never earn returns on investment.

So, what was required to answer the query that you now have how does Zoom make money? – An explicit marketing outline and reaching out to the audience’s demands. Zoom achieved this. Here’s sharing the learnings –

#Lesson 1 – Who was the Target Market? What were they missing? 

The target market was always the corporate structure. What they were missing? An unambiguous user-friendly design in the video-conferencing mode. Despite being the best in the market then, Skype had its own set of issues.

It is here Zoom made the required changes and captured the market unequivocally.

#Lesson 2 – A Saleable Product 

A fact that Yuan understood at the very beginning was – correct marketing strategies do not always soar up the product to the heights of success. Apart from that, as a backup – a robust application is required which will attend to all the needs of the user.

Looking forward to Zoom’s further success

It is no secret that Zoom’s popularity has been enhanced by its global user number crossing 300 billion daily. Speaking fiscally, the revenue generated has grown by 88% in 2020, thanks to Zoom’s strategic policies. This write-up on how does Zoom make money digitally documents the procedures for you. If you want more updates on Zoom-related info – keep checking this page.


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