Zoom is a lifesaver. Whether you’re an entrepreneur trying to keep your company afloat during the lockdown, or a senior citizen connecting with family and friends, the app has made communication easier and life bearable during the pandemic.
Pre-Covid, Zoom was just another start-up slugging it out in the app market. Nobody knew about the company except for, well, the techies. But, when the global lockdown began, Zoom took off in popularity and was able to outpace industry giants in just under two years. But, how does Zoom make money? In this article, we’ll look at all of Zoom’s income streams as well as how you can use Zoom to make a living yourself.
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What is Zoom?
Yeah, we’re wondering ‘how does Zoom make money’, but first — what even is Zoom?
Zoom is primarily a videoconferencing application that allows people to communicate with each other using a computer, smartphone, or tablet. Users interact virtually using audio, video, chat, or a combination of all three. You can also call in from a regular phone if you’d like.
Using Zoom, organizations can hold 1-on-1 meetings or organize big video conferences with up to 500 participants. It also comes with features like screen-sharing that make it easy for participants to display information and organize presentations efficiently.
Overall, there are three things that make Zoom stand out from the rest of the videoconferencing tools in the market.
First, it’s so easy to use. The interface is intuitive and you don’t have to be a programmer or a member of Gen Z to use it.
Zoom can be used on all internet browsers, desktops, or on its handy mobile app. It’s accessible to everyone.
Second, it trumps its competitors when it comes to high-quality audio/video output. It has better call quality, meaning your call won’t lag — even if you add 150 participants in grid view.
Zoom’s basic version already comes with a high-definition resolution, but those with paid accounts can get up to 1080p resolution. Users can also record their video sessions in high quality and share them online easily.
Finally, it offers the best customization features. Users can use a wide variety of virtual backgrounds to use for their video feed, or emojis to liven up online meetings. It also provides break-out rooms, close captioning, and even a digital whiteboard for diagrams.
How Does Zoom Make Money?
In a nutshell, Zoom makes money primarily from its subscription-based plans. It also has revenue streams from advertising, hardware sales, and investing in up-and-coming products.
Zoom uses a popular business model that is known among internet start-ups as the freemium model. It is free to use but comes with a lot of limitations that incentivize organizations to upgrade to a paid plan.
In this case, the product is Zoom’s high-quality video call tool referred to as Meetings. It’s a basic free subscription that allows subscribers to connect through audio and video, and there’s also a chat feature that allows the exchange of text, images, audio files, and content among users.
How does Zoom make money with Meetings? Well, the plan comes with a restriction.
On the basic plan, zoom meetings have a 40-minute time limit and a maximum of 100 participants. For most of us, that’s enough for a social call or a quick meeting online. But, if you need more than that, you’ll have to shell out for a paid subscription.
The rationale behind the business model is to use the free plan to gain users and popularity and then monetize the organizations and enterprise customers once they’re hooked. Clever, right?
How Does Zoom Make Money With Standard Plans?
Currently, Zoom Meetings offers Pro, Business & Enterprise plans. Each of the features of these plans is targeted at small teams, small and medium-sized businesses, and large enterprises. But, they also sell other paid plans and add-ons, such as:
- Zoom Rooms — This allows large businesses or organizations to use its conference room systems to host online meetings seamlessly. If your organization does not have the hardware needed to set up a conference room, Zoom will also link you up with its hardware partners so that you can buy equipment. Zoom will also earn a commission from your equipment purchase.
- Zoom Phone — This is a cloud-based add-on service that integrates traditional phone features into your Zoom experience. You can have call recording, domestic SMS and MMS, unlimited calling to 18 countries, and able to make or receive calls from multiple devices or apps.
- Zoom Events and Webinars — This is a software product that you can license for months or years at a time, as long as you’re willing to pay for the fees. This tool allows you to host online web conferences (aka webinars) and takes care of everything from the registration page to distributing the recording afterward.
- Zoom United — This package bundles Zoom Meetings and Zoom Phone under a single subscription. It features Pro, Enterprise, and Business plans, depending on your needs.
- Zoom Contact Center — This is their latest product which is a platform that’s optimized for video, voice, and messaging.
So how does Zoom make money from these packages? Well, Zoom has essentially vertically integrated a bunch of features that would be useful to businesses that have a lot of video calls. Depending on the business’s needs, they will be able to choose from a wide variety of plans and upsells that provide them with capabilities such as larger calls, automation, or even enhanced branding functionality.
How Does Zoom Make Money With Enterprise Plans?
Zoom also makes money by offering more cloud storage or round-the-clock technical support for corporate clients, for an additional fee.
But, the big-ticket item on Zoom’s Income Sheet is its enterprise plans for organizations in industries like education, government, and healthcare. These packages are very expensive and feature a lot of add-ons that are tailor-made for the industry.
Zoom’s marketing is actually quite clever — by tailoring its services to these critical industries, Zoom makes itself indispensable. It’s much more reliable than its competitors, and once it is fully embedded in the organization, it protects itself with ‘switching costs’ from yearly contracts and the bureaucratic complexity of changing systems. Zoom gains a competitive advantage.
As business models go, the freemium model has been working for Zoom. It gives Zoom market exposure, allowing it to take customers from free services competitors, even though freemium has its flaws.
Another thing we can’t ignore is that Zoom had the added benefit of the pandemic lockdown to spur it to success. After it was launched in 2013, it had already earned a reputation in the tech industry for being the best video conferencing app by far, in terms of video and audio quality. But, when the pandemic started, Zoom quickly began leapfrogging over its competitors.
By the end of 2020, Zoom had nearly doubled its all-time high of revenue that it had seen in 2019. In 2020, investors even mistakenly pumped a penny stock by over 240% by mistaking its ticker for Zoom. Then, Zoom hit its breakout year in 2021, with its revenue reaching a cool $2.6 billion — over 400% growth compared to its revenue from 2020.
But, now that we’ve covered the question ‘how does zoom make money?’, let’s talk about something that’s more important.
3 Ways To Make Money With A Free Zoom Plan
Let’s not forget that this is a website dedicated to helping people find ways to make money online. Subjects like ‘how does Zoom make money’ are interesting, but we’d rather help you make money instead.
Like everything else on the internet, there’s always a way to make good money off something free as a basic Zoom Meeting plan. Let’s start with one huge benefit. Zoom allows you to record stuff. As long as you keep it below the 40-minute mark, you can generate some cash without even upgrading to a Pro Plan.
If you have an online coaching business, you can offer a free 15-minute strategy for prospective clients. Simply put a link where people can request you for a Zoom Call so that you can get to meet them, talk to them, find out what their problems and offer advice to help them figure out solutions.
If the small business likes the advice and wants more, then you can convert them to a paying client — and you’re in business!
Further down the line, you can increase your offerings while still staying within the free plan. You can keep client calls limited to 30 minutes, set up a 90-day coaching program, and have up to 100 attendees.
And, while taking your clients through your series of lessons, you can record it so that it can be rewatched or broken down to be the subject for an e-book or an online course — two shiny passive income streams for your business.
Host Webinars Or Workshops
Whether you’re hosting creative workshops, taking sales calls, or using video conferencing in your business, you can usually accomplish what you need without paying for a Zoom Webinar Plan. You can even record a webinar to then distribute to prospective clients.
Just keep it in under 40 minutes, pack a lot of valuable content in it, and use a simple PowerPoint presentation to help people visualize what you’re teaching. Hit record, and then boom — you’ve got a webinar video that you can sell as a downloadable file or stream on your site.
Consulting is a booming industry, and Zoom is the go-to tool in the space. It’s perfect for helping you make money online, since it is the best way for you to connect with your customers. You can use it to connect with your prospective clients, or you can even put up a payment gateway so that people have to pay you for your time.
For example, if you have an online business consultancy, you can build a registration page on your website where your clients can enroll and include a PayPal/Stripe link to make it convenient for them to pay you.
Once they submit their payment, an email will be automatically sent to them with their Zoom link and meeting password so that they can attend the video call.
But, that’s not the only type of consulting it works for. Whether you’re interested in becoming an SEO consultant, a business automation consultant, or even a life coach, Zoom is a powerful tool in your arsenal.
Level Your Business Up on a Paid Zoom Plan
Once you’ve got some profits to re-invest in your business, then a paid plan can be a good investment. Here’s how Zoom can make money for you.
Webinars (i.e. online seminars) are a great tool for communication. If your business relies on webinars to promote a product or train a target market, getting the Zoom Webinar plan will help you reach a larger audience — as many as 500 people in total.
Zoom Webinars are also great for single-session, one-to-many presentations. You can organize town-all-style panels or host live event entertainment sessions as additional activities for your webinars.
If teaching is your livelihood, you can reach more prospective students if you are a paid user. You can host a one or two-hour class on Zoom where you can teach your topic extensively as well as interact with your students.
If you enroll in a Pro Plan, you can host meetings with up to 100 people for a maximum of 30 hours. It also comes with 1 GB of cloud storage so that you can record your meetings, save them, and then playback as needed. This is perfect if you’re recording lectures on a certain subject. There is also an option for social media streaming.
Always remember to record your webinars so that you can repurpose them as an online course or an ebook that you can sell as training for clients later on. Or, at the very least, you can offer access to the webinar as an incentive for them to join your email list.
Being a paid Zoom subscriber also gives you access to some cool add-ons. For instance, you can avail yourself of events management platform. Using this feature you can schedule and host events, list and sell tickets and promote your events by email or through social media.
A virtual summit is an online event consisting of a variety of talks and sessions that are accessible to people joining from all over the world. It can be a single-day or multi-day event and can be a combination of different panels or workshop sessions.
Clients pay to join a virtual summit because they are interested to learn about the topic and interact with experts. They also join to network, so a virtual summit will help generate leads for entrepreneurship. Many big business owners consider it a powerful marketing tool that can be used to expand a business.
To maximize this opportunity, you should get the Zoom Events Plan because it’s a combination of zoom meetings and zoom webinars. With this paid account, it gives you access to multiple hosting sessions like:
- Hosting pre-recorded or semi-live sessions, and uploading them
- Hosting live sessions with quick speaker/attendee interaction
- Making these recorded sessions available on demand for conference attendees
It also allows you to install Breakout sessions for participants which are great ways to seek networking opportunities for your businesses to grow. Learn more about what virtual summits can do for your business.
In summary, Zoom isn’t going away anytime soon. As more and more businesses adopt hybrid or remote work as the norm, Zoom will become the videoconferencing staple for large companies and organizations. Even if a new competitor arises in the start-up space, it’s more likely that Zoom will acquire them before they can actually pose a threat to the videoconferencing giant.
And, even though the question ‘how does Zoom make money’ is interesting, the real question is how Zoom can make money for you.
Want to check out some business models where you can use Zoom to pull in $1,000, $3,000, or even $10,000 per month? Check out our Hustles page — there are more options than you may have realized!