You’re on Mute: Inside the Online Video Communications Market
Back to school looks pretty different for many of you these days, though it has a common theme. It’s a verb (getting ready to Zoom). It’s an access code (where’s my Zoom link?). It’s a way of life (six hours of Zoom classes today!).
Since the start of the pandemic that left people quarantined in their homes, Zoom has become a household name. With the introduction of virtual, online learning, high school students have been hopping on the video communications platform at their bedroom desks or kitchen tables for everything from history and chemistry class, to band practice and student council meetings. Endless square panels…with smiling faces…waving emojis…and busy chat windows.
Culture of Connectivity
Zoom has become so much a part of the new normal, it’s easy to forget it is a living, breathing business and you – along with school districts and teachers – are the customers. That is, until it’s not working. In August, Zoom experienced widespread outages in the U.S. and even overseas (India is Zoom’s second-largest market) when massive numbers of students logged on for their first day of school. Exact numbers are hard to find, but it’s safe to say that hundreds of thousands of students are Zooming this fall.
“I have not really thought about the “behind-the-scenes” aspect of Zoom, but I can imagine how difficult it is, especially during a time like this,” says Jordan M., a high school student from New York City who runs a technology business and has been Zooming regularly since his school went remote in March. “I’m sure that Zoom was not expecting so much attention, but that is just what happened due to the pandemic.”
It has been a time of challenge and incredible growth for the business behind Zoom, which is actually Zoom Video Communications, based in San Jose, California. CEO Eric Yuan, who founded Zoom in 2011, has been riding the wave of “Let’s Zoom” culture, which not only includes education, but also offices connecting remotely, as well as friends and families gathering for parties.
According to Business Insider, Yuan made $5.2 billion in one day at the beginning of September when Zoom reported record second-quarter earnings that all but crushed estimates from Wall Street analysts who closely watch the financial performance of public companies. Revenues increased an incredible 355% year-over-year to $663.5 million as a result of its spike in customers. The stock of Zoom, which only went public in April 2019 at $36 a share, is now trading around $450 a share.
“This isn’t just a fundamental shift in education, it’s a shift in the way people relate to technology.” — Dan Alig, Wharton Chief Information Officer
Dan Alig, chief information officer at The Wharton School, has analyzed the Zoom business model through the years. The school has researched its videoconferencing technology options since the early days of Skype for all the ways that members of Wharton’s university community must connect, including meetings, global forums, online teaching and, most recently, transitioning classes and students to a virtual format.
“The school has been leveraging videoconferencing for well over a decade,” says Alig, who remembers once having a remote meeting with Yuan, who appeared onscreen with a backdrop of the Wharton San Francisco campus to show off Zoom’s new virtual background feature. “As a global business school, having people be able to bridge geography was critical to the ability to learn and connect and grow together. When we faced the current crisis, we were able to push these technologies further forward and adapt the Wharton classroom into a virtual environment.”
Wharton has primarily used Zoom competitor BlueJeans for its videoconferencing needs, a Silicon Valley company that was founded in 2009. “Both BlueJeans and Zoom technologies are very similar, but they have a different focus from a technical perspective,” notes Alig. “BlueJeans considers themselves an enterprise product that helps businesses at their core and really isn’t focused on the consumer market. Zoom is more focused on helping individuals connect for their business and personal needs…Zoom has invested in marketing and is a more common brand.” Alig recalls past trips to San Francisco where he was greeted at the airport by billboards saying something like, “You could have just connected for your meeting on Zoom, rather than getting on an airplane.”
That brand awareness is why so many people turned to Zoom earlier this year when they needed to connect – and why Zoom has struggled at times with issues like outages and security.
Digital Transformation
In a connected world where class and work must go on, the reliability and security of that connection are everything, says Alig. “Zoom was struggling with a lot of issues in March and April when the entire world went online, primarily on Zoom. Massive amounts of traffic were crippling many of their systems. While they were earlier to develop some of the interesting features that helped guide a classroom-based process (like break-out rooms), there was the balance of availability and reliability.”
Zoom is investing in its infrastructure, just as BlueJeans is also poised for growth, following an acquisition by Verizon. Other Zoom competitors, including WebEx, Skype, LogMein and GoToMeeting, are also in the game. While we can’t wait to get back to in-person classrooms and work, the market for videoconferencing has accelerated in recent months, along with our relationship to technology. Companies like Zoom have made it possible for daily activities to continue and have sometimes even made them more enriching, signaling a profound digital transformation.
Now that the world has built this appreciation for even more technologies, the way we communicate with each other and learn together is never going to be the same, suggests Alig. “This isn’t just a fundamental shift in education, it’s a shift in the way people relate to technology,” he says. “When we used to think about hanging out with our friends, it was the people who were close to us physically. Now we can connect with somebody who’s thousands of miles away without even thinking about it. It’s going to change the way we connect as humans. We’re still learning what that will look like, but it’s going to adapt extremely quickly in ways that are amazing and challenging at the same time.”
Until then, many students long for a traditional back-to-school that puts the phrase “You’re on mute” to rest. Says Jordan, who starts his junior year in mid-September: “As soon as the restrictions are lifted, I am definitely looking forward to returning to a regular five-day week schedule inside the school building.”
Related Links
Conversation Starters
How has the “Let’s Zoom” culture impacted the business behind Zoom?
If other videoconferencing services like BlueJeans exist, why have so many companies and schools rushed to Zoom?
Dan Alig says that our use of Zoom and other platforms is going to “change the way we connect as humans.” Do you agree? Why or why not?
I certainly agree with Dan Alig when he says Zoom and other video communications applications are going to “change the way we connect as humans.” Especially during the pandemic, as we socially distance ourselves, the only way to really communicate with friends is to do so in the safety of our bedrooms and through our screens. Those at work attend video conferences on a daily basis now that they cannot communicate through in-person means. Want to host a virtual party? Just do it through Zoom!
As a high school student myself, I have truly become a part of this “Zooming” world to connect to my fellow peers. I don’t go a day without hearing “you’re on mute,” or “Zoom into your next class.” These phrases, among others, have become the new slang: “a household name” per se. Once schools opened up, It’s no surprise that hundreds of thousands of people find themselves sitting in front of a laptop screen they now call school (and unfortunately are greeted with possible outages).
However, some may ask, “Why is it that so many teachers across the nation chose to use Zoom for school lectures instead of the countless other platforms available?” My response to that simply has to do with the art of marketing and how Zoom has so cleverly applied it. At the end of the day, companies/businesses are just trying to make the money and to financially thrive. Still, it is important not to seem too obvious about that. Rather, from my perspective at least, the key is to get close to customers themselves and appeal to their satisfaction. Once companies succeed in this, the rest will follow. Zoom is able to satisfy its customers, not only through its sleek design but also its convenience. Unlike some video chatting services, Zoom makes it incredibly simple to log on and join meetings; you don’t have to be a tech wiz to master the art of zooming. Another reason that makes Zoom so unique is its breakout rooms feature. This is probably the game-changer for teachers who want to keep their classes engaging for students. All in all, there are endless points that showcase how much of a positive impact Zoom has had on this generation.
– This was a great eye-opening piece and very fun to write about!
It is crazy to think that we are already a year and a half into the pandemic, and even more difficult to imagine a life without a tool most of us have not known before the pandemic, Zoom. Reading your comment, Sahithy, which was only published nine months ago, made me realize how much our world have stayed stagnant, despite the lingering unpredictability that has plagued us since the beginning of the pandemic.
Zoom, as you have predicted, became the number one video meeting platform for the United States. Its meeting minutes skyrocketed from 101 billion minutes in the Q4 of 2020 to an astounding 2.0 trillion as of Q2 2021 (Zoom, 2021). The continuous increase in user population and the overall user satisfaction are undeniably attributed to Zoom’s easy accessibility as you have mentioned; however, at its core, I would point to Zoom’s already robust system when people needed it the most. It is easy to see Zoom’s success as overnight and accidental, but I see the functionality and reliability of Zoom’s interface at the start of the pandemic as the cornerstone of zooms recent success.
When Covid first hit the U.S. in March, we all remember the scramble: the scramble to buy essential goods like toilet paper, the scramble for face masks and PPE, the scramble for good internet services, and the scramble to move in-person education online. It is in such uncertainty, Zoom with its rather plain interface and basic function buttons stood out. Compared to the laggy algorithm of GoogleMeet, and Skype’s myriad features and multi-step login process, Zoom provided a sense of certainty when everything else seemed to be in limbo. People often say “the first impression is the last impression.” People’s first impression of Zoom as a reliable and functional product certainly stuck through.
Circling back to your heartfelt introduction where you mentioned Zoom as becoming part of our routine, still holds true today. Zoom parties, karaoke, and casual meet-ups are part of our “new normal.” I, myself, hosted a hybrid sweet-sixteen birthday a month ago, with some of my friends zooming across the world while others joined me in an in-person birthday celebration. It seems like even as vaccination rates surge (Oh right, your comment was in the pre-covid vaccine world) and restrictions loosen, people are still choosing to be on Zoom. This goes to show that what you and Dan Alig predicted has come true — Zoom has already “changed the way we connect as humans.”
I am beyond impressed by your poignant comment and your ability to foresee Zoom’s long-term successes when it was still a relatively “new” phenomenon. As a fellow peer who’s deep in the “zooming” world, I concur that Zoom has broadened the scope and breadth of connections I could make within the four walls of my bedroom, allowing me to easily “meet” someone across the world without creating health risks for myself or others. To your point, I think most can agree that (except for our deteriorating eyesight) zoom and other technologies were lifesavers, fighting in a different frontline to connect all those who were separated because of the pandemic. Looking into the future, I can’t see a world without Zoom. Though its meeting minutes might dwindle as the world opens back up, Zoom will remain an essential tool in our tool box, connecting those who are separated or forging new bonds between strangers. Whether it attracted users through its convenient interface and unique features, or through an impression of stability in the time of chaos, Zoom, after all, had and will stay “unmuted” in our lives.
Sahthy, such a bright and optimistic onlook about the absolutely dark hell hole that was online learning. Judging from your time of writing this, it’s just at the tip of the school year. The start of a grandiose and mysterious adventure to uncharted territory: virtual learning. Oh how so exciting it is to be able to be simultaneously at school and half asleep in bed. All of this is possible solely because of Zoom. Zoom, the saint, Zoom the messiah, Zoom, truly the future. Zoom changes communication as it allows for people from different places to talk to each other. How has no one seriously ever thought of a way for others to communicate across the world wirelessly? Oh wait.
Alexander Graham Bell is turning over in his grave. The article was so excited about this new age of connectivity, where people don’t have to meet each other to talk, that they forgot to reach inside their pocket and pull out the item that had kick started this change years ago: a phone. “This isn’t just a fundamental shift in education, it’s a shift in the way people relate to technology.” That quote from Dan Alig brings up a good point about our ever growing reliance on technology for connectivity, yet it doesn’t really attribute to Zoom. From a study in 2015 by Pew research, they say that 92% of Americans own cell phones and keep them with them wherever they go. So yes, quarantine did speed up the acceptance of video conferences, it was inevitable from just the sheer amount of usage of phones. Also putting into account that phones have video calling as early as 2013 and popular apps such as Instagram and Snapchat also did too. This change was inevitable and bound to happen and it just so happened to start with a pandemic and sadly, Zoom.
Looking at the stocks of Zoom, it’s fallen quite a bit from its throne of 559 USD per share in October of 2020, to about on average about 100 USD in July of 2022. Although it did increase from its 36 USD per share from the start of the pandemic, it’s not really a heavyweight in influence anymore. This is the same trend within other video communication platforms, like Discord, Google meets. Despite the fact they can’t ever hope to match the absolute surge of usage during the pandemic, the influence from it allows them to retain some of their new users. That being said, this impact isn’t greatly increased as, despite it not seeming hopeful, schools did reopen, sadly. From where I live, New York, mayor Eric Adam encouraged businesses to reopen following mask mandates. This was to help the lower class workers as without the foot traffic, they would struggle to sell products. So the drop in zoom usage isn’t exactly surprising and the new Zoom culture diminished, making it’s net influence not too significant. This new future of online businesses and school was nothing more than a prediction.
Also, small rant: the Zoom ui is terrible and it’s not convenient. The fact that in a meeting with a passcode, you have to be admitted again by the host when you accidentally leave is horrible. Especially when the host isn’t exactly technologically advanced and it takes them a while to find out despite how “simple” you say it is Sahithy. On the topic of security, changing accounts for Zoom is horrendous as you are required to change it every time and since it pops you back to the website, sometimes it doesn’t work and you have to transfer back to the application. One last point, I promise. The breakout rooms did not help as most of the time people were silent, and other video calling applications had some features like discord, where moving through channels is way easier. After a year of zoom, I can definitively say that you wouldn’t want to be part of this “Zooming” culture,
Zoom has now been a part of my life for more than a year. Being a high school student myself, it was extremely hard to adapt to the concept of online learning but zoom made it so much easier. My school uses Zoom as a platform for online learning along with many other schools in my city. I am an Indian, and I am not surprised that India is Zoom’s second largest market. There are no billboards like Dan Alig had seen, neither are there any advertisements on the television for zoom. The way India has become the second largest market for Zoom in the world is purely through word of mouth which is astounding. If the market is so huge in a country where there are extremely few advertisements, I’m not surprised when I read that the revenues of Zoom increased an incredible 355% year-over-year to $663.5 million as a result of its spike in customers. As soon as the lockdown started, the platform ‘zoom’ was on everyone’s tongues and it spread like a wildfire through word of mouth. Zoom has been an extremely good platform for online learning, business meetings and casual meets with friends however it does have security and server issues at times. Speaking from personal experience, zoom does have server issues sometimes. In the middle of lockdown, zoom crashed for many people in South Mumbai for 10 minutes while we were writing our exams. There are also security issues such as ‘zoom invaders’ ‘raiding’ other people’s meetings and causing havoc. However despite these issues Zoom has been extremely beneficial to people who have been locked in their houses for education, business and for recreational purposes. Features like breakout rooms and top quality services set zoom at a bar above most of its competitors. An extremely amazing marketing strategy by zoom, of keeping meetings of 30 minutes or below for free payed off extremely well for them as people were encouraged to buy the package of unlimited time for meetings to be held. I also agree with Sahithy’s comment about the fact that most people, especially students including him and myself have become a part of the ‘zooming’ culture.
-This was an extremely relatable and interesting comment to write!
Thanks for kicking off Round 2 of our Comment & Win contest in style, Harshaditya! And how fitting that you chose this story about the business behind Zoom. Literally, what would we do without it at this point? That must have been unnerving to have Zoom crash during your exams! I have been reluctantly dragged into the Zoom Culture, and this summer I am learning a lot of the features from the teaching perspective. It is a challenge, but also a wonder. I’m constantly amazed. I don’t think we will ever look back from the progress we have made connecting virtually. We may take a break from it for awhile, but it will always be a more essential part of our educational and professional journey. Our relationship with technology truly has changed.
Can you believe that social media can cure people? I would, straightaway, say yes to the question as I strongly connect with Dan who emphasized the importance of social media and how it is a fundamental “shift in the way people relate to technology.” Especially in this unprecedented pandemic situation, people are suffering greatly from being physically disconnected from their family, friends, and loved ones. This is also a problem for the students of Generation Z, who have not got a chance to enjoy normal school life or a proper graduation ceremony. To me, the word “connection” seems to be gone in our life these days. As the article mentioned, to “reconnect” the physically disconnected students and teachers, schools started to use a social media app called “Zoom.” Whether it was the embarrassing but hilarious moment of Mr. Tilly spending minutes to figure out how to use the “breakout room” function or the numerous applause emojis that Andy and I used when listening to Ms. Erin’s inspiring live lectures, Zoom definitely has brought back “connection” in our life.
Nonetheless, this was not the first time in my life that social media helped me connect with people. When I was thirteen, I decided to study abroad in the States from South Korea, and at first I struggled a lot in adapting to the new environment. Nobody that I knew from the past was with me. Though I always wished my parents would come with me, I never could ask them because I knew that they were already working busily in Korea to afford my tuition. When the shelter called “family” disappeared in my life, I had to build my own shelter with a new group of people. However, it was too hard for me to make friends right away, overcoming all the language barriers, cultural and environmental differences. Especially, as an only Asian international student who pronounced vanilla as “banila,” and father as “pader,” my fellow classmates teased me with my heavy Korean accent rather than welcoming me to their school. Out of all the hardships, the worst was the extreme loneliness that I felt every night, which was a feeling that I have never felt before when I was in Korea
However, I did not give up. I had trust in myself and I believed that listening to the words of the haters would be a waste of my time. Dreaming of myself being friends with Andy, Dillan, Jack, AJ, and Martin, I made an effort, step by step, to improve my Korean accent to sound more native. After school, I always watched videos from ‘Linguamarina’ and ‘Speak English With Vanessa’ on Youtube, wrote notes of their series of lessons, listened to their pronunciation, and practiced over and over. And one day, when I was watching a new video that Vanessa had uploaded, I saw a random advertisement, in which People were dancing to addictive songs and making funny facial expressions using sounds. Out of curiosity, I clicked on that advertisement, and without hesitation, downloaded the application named Tiktok. I chose interesting sounds that I like and started to lip-sync and created subtitles to make my videos more attractive. After a few tries (or an embarrassing failure) I was able to produce a video with people showing over fifteen thousand likes and more loves in the comment.
And I still remember the thrill and excitement of receiving likes/loves in Tiktok, where I was finally able to “connect” with people and communicate with others in the online world. With the confidence that I gained from the online world’s thousands and millions of views and numerous supportive comments, I was also able to improve my offline life, becoming friends with Andy, Dillan, and others, and having small talk with strangers on the street. As I became more viral on Tiktok by creating unique videos and having responsive conversations with my followers in the comment section, I became braver in making new relationships: Social media was reconnecting both offline and online me with other people.
Furthermore, it was at that moment that I realized I should use this platform to help people who are struggling and reaching the lowest point of their life just like myself a few years ago. I started by publishing videos and promoting reliable organizations that could help people who were suffering from mental problems like low self-esteem and self-hatred. I also made an encouraging speech, funny content, and easy dance moves to deliver my positive energy. With the help from the Oregon Health Authority, I started an OHA Safe+Strong campaign that donates all the profit made through Tiktok to the same organization. Social media not only “connected” me with others but also enabled me to become a “connector” for others.
The world is changing dramatically with our new technology. And, with the growth of new technology, some people proclaim that social media is physically disconnecting people. However, to those people, I want to share a short but dense life story of how social media could also easily connect people with each other both in the online and offline world. In learning what it takes to become a qualified global entrepreneur, I have learned that chronic diseases of our society can be finally cured with new technologies. Harnessing my experience of becoming a global “connector” with 300,000 followers from over 12 different countries in the world’s fastest-growing social media platform, I intend to solve other oft-overlooked yet insidious problems to lead generation Zs in making our world a better place.