how does zoom make money

How Does Zoom Make Money? Zoom Business Model Explained

DIGITAL MARKETING MARKETING TECHNOLOGY

If you are a business owner, leader, public speaker, teacher, tutor, mentor, student, or even a company employee, you may use the zoom video conferencing platform to ease your tasks. It is one of the best applications to let the speaker and consumer meet face-to-face and discuss their plans, but did you ever think about how does zoom make money? In this article, we have mentioned different ways that zoom uses to make money and stay profitable throughout the business days. Zoom lets people stream live video conferences, create and manage and host zoom meetings, and let users attend the meeting.

Overview:

Businesses and consumers widely use the zoom cloud meeting platform for their meetings and video conferences. Before covid-19 pandemic, zoom wasn’t too popular because it was a new concept to meet online and avoid physical meetings. Still, when the covid-19 pandemic hit the earth, the worst things happened people were dying, and social distance was the only possible and practical way to save lives. That boomed zoom meetings and its popularity because people started meeting online.

What Is Zoom Cloud Meeting?

Zoom meetings platform is a cloud-based video conferencing tool that users can use to meet virtually, show their presentations, and teach each other through Audio, Video, and chat. The application is very easy in itself, which is the biggest advantage of the zoom cloud meeting platform. The quality of the output video is very good, which is why the zoom meeting became too successful, with its market value in billions.

how does zoom make money
Pic credit- blog.zoom.us

Facts Regarding Zoom Cloud Meetings:

  • Zoom is a saas app that lets you meet individually, meet with many, and communicate with audio, video, text, and infographics.
  • You can conduct one-on-one sessions, meet with people up to 500 participants, share screens online with all, and coordinate for better information sharing.
  • You can co-host anything during the meeting. 
  • Zoom application has two products that make money for zoom. Zoom Meetings & Chat and Zoom Rooms and Workspaces.
  • You can attend zoom meetings on mobile, web browsers, and computers. 
  • Zoom Rooms and Workspaces let businesses use hardware like tablets, computers, cameras, microphones, and more to meet virtually.

How Does Zoom Make Money?

Zoom cloud meeting makes money with the following ways of business.

  • Subscription Fees
  • Selling Hardware
  • Add-ons
  • Placing Ads
  • Startup Investments

Zoom Is Free To Use!

Yes, you heard it right. Zoom company lets you conduct cloud meetings free, but it is for limited-time meets, and the number of participants is also fixed. That means, if you need to meet more than the predefined free number of participants, you must pay some fees to zoom. Also, if your meeting session is more than predefined free time, you will be required to pay some fees to zoom cloud meetings. 

Do you know that zoom cloud meeting is monetizing by placing ads in free meets to generate revenue through its free meets? Let us discuss the zoom business model in detail.

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Zoom Business Model:

Zoom cloud meeting is the largest video conferencing platform because of its high-quality video calls that don’t even leg, and competitors like Hangouts, TeamViewer, Microsoft Teams, and more cannot directly compete with the zoom app. Its free service is available with ads, and you can kill ads by subscribing to the zoom platform.

The Ways Zoom Make Money:

Don’t know how does zoom make money? As we discussed, zoom makes money through a subscription model, hardware rental solutions, ad services, and startup investments. Here is the eye-opening fact about zoom. In 2020, the zoom cloud meeting platform generated $622.7 million in revenue, and its net profit of it was $21.7 million. Do you think it’s too much? Wait for 2021. In 2021, the zoom cloud meeting platform generated $2.65 billion in revenue. Yes, it increased by 300%, and only Americans have generated 68% revenue. Isn’t that a great thing for the zoom platform? You can estimate the yearly profit of this company. Let’s discuss the revenue models.

  • Subscription Model:

Zoom provides different services, and one of them is free services. Here, the participant limit is less than 100, and the meeting time allowed is 40 minutes. After this time, the meeting will end up automatically, and your session will be interrupted. But zoom offers a phone plan of $10 per month per user. There is also another plan known as $14.99 per month per license. Zoom teacher’s plan is $7.50 per student license. Zoom also gives healthcare units a small business plan of $14.99 per monthly license. If you are an educator, you can start zoom’s hybrid business plan of $19.99 per license per month, which includes 99 licenses, and the participation limit is 300.

  • Selling/Renting Hardware:

Do you know that zoom provides a hardware service to businesses and individuals? This business model is essential for telephone and video conferencing. Some hardware devices like cameras, speakers, phones, and more are available for rent; zoom charges you $2.99 to $200 per month. That’s a really strange and real business plan for zoom users.

  • Add-ons:

Zoom cloud meeting offers various add-on services to its users, like professional zoom meeting recording. It may cost you anywhere between $40 and 500 per month. It depends on the storage capacity of your video conferences. So, you will be charged more if you need to record more hours. 

You are also allowed to add audio conferencing that can quickly enhance your meeting, and it only charges $100 a month. If you need to host a large meeting with more capacity, you may have to pay an extra $50 per month, which lets you host 500 participants. You can also pay $90 per month for hosting 1000 participants. That’s how does zoom make money. 

Do you know about Room Connectors? They help desktops, mobile devices, and different endpoints that you can use for $49 per month per connector.

  • Ads Placed:

If you have not subscribed to the zoom cloud meeting platform, you can still use zoom for free, but zoom has started monetizing its platform for free meetings by placing ads in meetings. So, you will be shown some ads to generate revenue for the zoom meeting. Of course, it’s not the biggest part of zoom’s revenue, but it compensates for what it provides its users for free. Zoom was announced in 2011, and it started showing ads to users that don’t pay to use the product. It benefited both zoom and users because zoom wanted to generate revenue from free users, and users needed free products. Zoom generates a huge amount from ads because millions of zoom users are actively attending meetings.

  • Investments Revenue:

Back in 2011, when zoom was launched, it couldn’t invest in other startups to grow revenue, but after getting success, according to the reports, it has made more than 20 investments in 20 different startups. The total investment amount is more than $100 million, which makes zoom one of the most successful investment apps that is a startup. Through its investments, zoom makes money when shares have greater prices than they’ve purchased. Of course, they trade shares and earn money.

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Facts Of Funding/Revenue/Zoom Valuation:

After reading everything about how does zoom make money, it’s time to go through some facts. We don’t know how much these facts meet the reality or even if they’re true or rumors, but we have used official sources that had collected and posted these facts. It means we have summarized what trusted sources say about zoom revenue, investment, and marketing cap. So, let’s point them about quickly.

  • Crunchbase said that Zoom raised $276 million, but this investment wasn’t raised in a single investment round. It was done in eight rounds of venture capital fundraising.
  • Some popular investors that increased the value of the zoom cloud meeting platform include Horizons Ventures, Sequoia Capital, Emergence Capital, and others. They all gave a big round of investment.
  • When zoom became a public limited company, its IPO raised another $365.8 million. It was announced in April 2019. That was when zoom was estimated to be valued at $9.2 billion, but today, the zoom cloud meeting platform has a market value of $47 billion. That’s a huge profit for investors.
  • In 2020, zoom generated millions of revenue, but the actual early net revenue was $623 million (in the year prior). From that, the net profit of the zoom Cloud meeting was 10x compared to 2019. That’s amazing. In 2021, zoom generated $2.65 billion, whereas covid-19 pandemic helped it earn billions. 
how does zoom make money
Pic credit- businessinsider.in

Wrapping Up:

Did you understand how does zoom make money online? If you are an active member of zoom meetings, there is no question you are making money for zoom meetings, even if you don’t subscribe or don’t pay a single penny to the platform. The reason is the ad revenue we discussed in this article. We have talked about five different ways that zoom uses to make money, and there is no doubt that zoom’s cloud meeting platform is profitable. Did you invest in zoom IPO? What is your portfolio’s current status, and did you know about zoom IPO? Let us know that.

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