How Does Zoom Make Money?

zoom business plan

As the vaccines are rolling out and the pandemic seems like it might finally be coming to an end, I think it’s safe to say that most of us wish COVID-19 had never happened at all. However, one company that made out pretty well during the pandemic was Zoom, a video chatting platform that most of us are way too familiar with nowadays. 

Over the course of 2020, Zoom’s share price went up a whopping 425%. Zoom’s video chatting interface is easier to use than Cisco’s WebEx, has a wider range of features than Google Hangouts, and can be used on a wider range of devices than Apple’s FaceTime, so it’s no wonder why the app has enjoyed such widespread adoption. Plus, for most of us, Zoom doesn’t cost a thing.

Is Zoom Free?

If you’ve ever used Zoom, you probably noticed that it’s totally free, and there are no ads while you’re using the app. For most of us, you don’t have to pay anything to Zoom if you want to chat with your friends or relatives virtually. And you never have to click out of annoying ads while you’re in the middle of a conversation. So, how does Zoom make money?

Zoom’s Freemium Model

Like a lot of apps out there these days, Zoom operates on a freemium model business plan, which pretty much means that you have to pay for certain features. Essentially, a freemium model draws users in by offering a free version of the app and then encouraging users to pay real money for premium features.

Apps like Candy Crush have utilized the freemium model effectively by getting players hooked on their game and then requesting that they pay money for added power-ups or other in-game features. Zoom’s freemium model works in a similar way, offering a free version in the platform and then requesting that users pay for increased functionality.

Zoom’s paid subscription plans are pretty much just geared towards businesses that need more chat rooms, chat time, or storage space for files. Premium Zoom plans offer subscribers unrestricted chat times, whereas the free version sets a 40-minute limit. Paid versions also allow users to add as many people as they choose to a chatroom, whereas the free version restricts the chatroom size. Premium users can also record their conversations or even live stream them to social media.

So, if you’re just trying to video chat your besties, you’ll probably never give Zoom a cent. But if you’re a business that’s needed to do virtual meetings during the pandemic, you’ve most likely helped Zoom get a whole lot richer by paying for one of their premium plans. And while Zoom’s stock price surge seems to be slowing down a bit at the moment, there’s no doubt that they came out a whole lot better on the tail end of the pandemic.

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