How Does Zoom App Make Money: Business Model Explained

When we talk about video conferencing apps, Zoom is the most successful and frequently discussed one. Let’s start with a brief overview of Zoom’s history to understand the idea of this app and its goals. This company began as a startup in 1991 in California and reached huge success in 2019. It is hard to overestimate its role and influence during COVID-19 because of social distancing and remote work.

At that time, Zoom became a competitor for such market titans as Skype. This article will be helpful for everyone who would like to know how Zoom makes its money and how big its revenue is.

How Does the Zoom App Work?

Zoom is a cloud-based video chat app users can install on their computers or mobile devices. It is supported by multiple OS and also available as a Chrome extension and Outlook plugin. Its core features include scheduling, hosting, and attending videoconferences.

Extended services include inviting others, recording meetings, sharing the user screen, etc. Zoom allows thousands of participants, making this app convenient for webinars, huge business meetings, and other events.

Keep on reading to find out more about the Zoom business model, which would be helpful if you plan to create your own video call app and make your enterprise profitable.

How is Zoom Making Money?

Let’s have a closer look at the monetization strategies and 4 products that Zoom offers to its users. 

Zoom Business Model Explained

All the products operate according to a freemium model, by which a company provides restricted services for free and an extended feature-set only for the paid model. So, if you are wondering how does Zoom earn money, the answer is – they sell subscriptions. 

This approach provides users with numerous benefits and meets the needs of most target audiences in different spheres. The free model allows this app to reach a wide audience, and once they explore the convenience, they become interested in purchasing a paid plan. In 2020, this model also enabled Zoom to reach the largest growth in brand recognition in the US. Many companies were inspired by this outstanding example and decided to develop their own solutions for video conferencing.

#1 Zoom Meetings and Chats

This key feature offered by Zoom enables users to make video calls or chat via their app. The free version allows only 40 minutes, and the number of participants is restricted to 100. To receive access to the whole set of features, the users have to pay a monthly or annual subscription fee. The free product version is the most beneficial for personal meetings. There are 4 different subscription models, depending on the number of participants and necessary functionality:

• Zoom Basic is a free version with the restricted functionality we mentioned above. 
• Zoom Pro is a great pick for small teams. Up to 100 participants can take part in meetings with unlimited duration. 1 GB recording and social media streaming are also available.
• Zoom Business is beneficial for small and mid-size companies. It offers to host up to 300 participants, single sign-on, domain, and business branding management. The users can also record transcripts and send invitations via branded email templates. 
• Zoom United Business enables meetings with over 300 participants, unlimited calls within the US and Canada.
• Zoom enterprise includes the functionality of previous plans and more.

#2 Zoom Rooms and Workspaces

This is a system of conference rooms that enables organizing video meetings between the company or organization members. It looks like a conference room and serves as a meeting and collaboration point. This product aims to build an online space where all the co-workers in various locations can conveniently communicate and solve tasks. The users need to pay extra for the subscription to the Zoom Rooms. 

Zoom offers installation support for enterprise members from their professional services unit. This approach guarantees that the special conference rooms are installed and run as seamlessly as possible. 

Starting a video meeting is easy via the conference room connector. They also included an option to buy special hardware certified by Zoom and provided by their partners. This way of making money is beneficial for both sides, as Zoom receives profit from every sale, and hardware manufacturers promote their products to a broad audience. This idea will be helpful if you want to start the development of your own video conferencing software. 

#3 Zoom Phone

This is a solution developed for making fast cloud calls. It is also targeted at business needs and tries to replace ordinary phone calls. Here are the features it includes: 

• making and receiving calls from numerous devices
• unlimited calls for US and Canada
• messages
• voicemail
• recording calls
• blocking numbers
• Call routing based on AI
• Secured HD audio calls to guarantee clear communication
• Redirecting calls via IVR and auto-attendants

These and many other features are available for the monthly fee ($14.99 per host) and annual fee ($12.49 each month). Such a pricing system is common for all Zoom products.

#4 Zoom Video Webinars

This service enables broadcasting Zoom meetings to up to 10,000 people in view-only mode. The host can manage their view and communicate via chat or polls. Webinar hosts can add from 100 to 10,000 active participants, according to their subscription model.

Moreover, this platform interacts with other online management tools like Slack, Trello, etc., as a marketplace. This enhances the participant experience and serves as an additional source of monetization. 

Finally, How Much Money is Zoom Making?

And now, let’s move on to the concrete numbers. Zoom saw a boost in revenue in 2020 when downloads increased rapidly, and this tendency continues in 2021.

By the end of 2020, Zoom had revenue of $2.6 billion, which was 317% growth compared with the previous year. In 2019, the revenue comprised $623 million. Moreover, the number of participants increased by 2,900 percent in 2020, with the biggest leap during the second quarter of 2020 due to COVID-19.

These numbers are impressive, and according to the forecasts, the estimates for 2022 are also very promising. 

To Sum Up

Zoom revolutionized the software solutions industry in 2020 and earned good money by attracting numerous users. It was possible because of its unique business model and approach to its users.

We hope that our article about how zoom makes money inspired you to build your own solution and choose an optimal monetization strategy.