Zoom lifts 40 minute time limit on Thanksgiving holiday

Zoom announced that the company will lift 40-minute time limit for all meeting globally during Thanksgiving holiday.

Who is Zoom?

Based on its homepage, there are several pieces of company information of Zoom as follows.

  • We deliver happiness: The greatest, most sustainable happiness comes from making others happy. It is our privilege to deliver you happiness every single day.
  • Our mission: Make video communications frictionless and secure
  • Our vision: Video communications empowering people to accomplish more
  • Our value: Care, Community, Customers, Company, Teammates, Selves
  • Our culture: Delivering happiness
  • About Zoom: Zoom helps businesses and organizations bring their teams together in a frictionless environment to get more done. Our easy, reliable cloud platform for video, voice, content sharing, and chat runs across mobile devices, desktops, telephones, and room systems. Zoom is publicly traded on Nasdaq (ZM) and headquartered in San Jose, California.

What is Thanksgiving?

According to Britannica, Thanksgiving is explained in the following way.

Canada celebrating the harvest and other blessings of the past year. Americans generally believe that their Thanksgiving is modeled on a 1621 harvest feast shared by the English colonists (Pilgrims) of Plymouth and the Wampanoag people. The American holiday is particularly rich in legend and symbolism, and the traditional fare of the Thanksgiving meal typically includes turkey, bread stuffing, potatoes, cranberries, and pumpkin pie. With respect to vehicular travel, the holiday is often the busiest of the year, as family members gather with one another. Thanksgiving Day is celebrated on Thursday, November 26, 2020.

To realize social value as well as economic value is more important in 2020s

When we hear this Zoom’s announcement for the first time, what will be in our mind? Probably we feel that this offer is reasonable for us because the pandemic still makes it difficult for us to see each other and to move to other countries or even regions. Many countries still impose on strict restrictions to us to reduce the spread of the virus and to keep social distance is also important to prevent us from being infected. However, our time with family is also essential, especially holiday seasons, to feel relaxed as well as to improve our quality of life. In this sense, we can conclude that Zoom’s decision adds social value.

In addition to this, we can say that this decision also increase economic value. For the simplicity for our explanations, let us define that the revenue of Zoom comes from the equation: the number of paid user times average revenue per user. First of all the company wants to increase the number of user since this will be the very base of paid user. After that, the technology giant wants to convert free account to paid account. Thanks to this decision, more people who have never used Zoom have opportunities to do so not only North America but also all over the world. Next, when fee user convers his or her account to premium, what will be important? One is that users should feel benefits of premium accounts, and that is why many companies offer their premium services for free for first week or first month, for example. In this announcement, almost every user will use the premium service that is unlimited group meetings. Therefore, beginners as well as free account users will be able to enjoy premium service and it is possible that some of them will be converted to paid users consequently.

Digital companies take advantage of low marginal cost and can offer campaign like Zoom’s example to realize both social value and economic value. This is huge difference between them and traditional companies. As a result, this becomes one reason why the share price of digital companies become larger than traditional companies.