Back in late 2019 I met someone from Zoom who was visiting London. The company, then as now, offered free video-conferencing calls for up to 40 minutes, but charged a fee of around £10 a month to users who wanted longer calls.
Towards the end of the conversation, I flippantly asked what I thought was a hypothetical question: ‘How much would you charge to give full Zoom access to the whole UK population?’ I didn’t think much more about it, but to my surprise they came back to me a few days later: ‘If you know anyone in the government who’d be interested in this, we’d like to talk.’
In the end, I never got round to doing anything, and then the pandemic hit, which solved their adoption problem overnight. Nevertheless it remains an interesting thought experiment. Firstly, why might this have been a good idea? And why did I never bother taking it further?
One reason I was interested was because Zoom was not Google, Amazon, Facebook, Apple or Microsoft. When regulators turn their fire on these network-effect oligopolies, the criticism usually focuses on their pricing power. Maybe so. But often these companies perform their profitable work quite well.
Instead, a less visible cost of their market dominance may come from services where they don’t make money: things like FaceTime, Skype, Teams, or the various email clients given away with the ‘main product’. These defensive offerings can trap innovation in a slough of mediocrity where they are capable enough (and free enough) to prevent new entrants entering the market, yet where nothing significantly improves. Yes, it’s wonderful we don’t have to pay for email software, but the hidden price is that email technology has barely advanced in 20 years.