Cost-effective video conferencing is a cutting-edge technology that has become an integral part of our work life now. And it is here to stay. Usage-based video conferencing is a technology that could connect you with clients and colleagues sitting across offices, cities, states and even countries with the click of a button is something you DEFINITELY need for your business.
But how do organizations shift to remote way of working without spending thousands of dollars on quality conferencing software? The short answer is – cost effective usage-based video conferencing.
To explain how cost effective usage-based video conferencing works, let us understand the license-based model first.
How does license based model work?
Most of the conferencing providers out there provide a license per host-based model. The model says that you need to buy multiple licenses if you need to have concurrent meetings.
So, if you have ONE ongoing meeting with the ONE host license you have, you will need another host license to start a second meeting parallelly.
What that means is if you have 10 people in your organization (assuming anyone can host meetings and invite others), you will buy 10 host licenses for them to be able to conduct 10 parallel meetings.
Your invoice is generated as follows:
10 x Cost of one license
Zoom Pricing is $19.99/month/license = $199.90 for 10 licenses/month
You might ask "So what's the problem with that?"
No problem if all your employees are on video conferencing all the time, every day.
However, if that is not true, then you could save a lot on your conferencing bill by switching to a pay as you go plan.
How does the usage-based model of video conferencing work?
This model works on participant-minutes.
Here, you do not purchase multiple licenses per host. In fact, there are no licenses to be bought.
You only pay based on how many participant-minutes your organization has consumed in a month.
Participant minutes is calculated as follows:
participant-minutes = no. of participants in a call x duration of the call in minutes
It is calculated for each call (and every minute in case of Clan Meeting). Then added to get total participant minutes.
For easy illustration let us assume each meeting in your organization is for 30 minutes and has an average of 3 participants in it.
On an average, if one employee hosts 4 meetings in a day (there will be employees who host 8+ meetings per day and others who do not host any meetings at all).
- For 10 employees it is 4 x 10 x 30 = 1200 meeting minutes per day
Multiply with participant count:
- 1200 x 3 = 3600 participant-minutes per day
As per Clan Meeting pricing, this translates to $144 in a month.
Savings of almost 28% over Zoom every month!
However, if your usage is more, you could end up paying more than a license-based model. So, you need to estimate your usage by looking at the history of your existing meeting provider or get a rough estimate by multiplying average meetings in a day with the number of business days that you have in a month.
What are dynamic participant minutes?
Most meeting providers calculate the participant minutes by straight-up multiplying the number of participants with the total duration of a meeting. However, this is not entirely fair to the users as they end up paying more.
Because not all meetings have full attendance for the entire duration of the meeting.
Few participants join late and a few leave early as they need to jump on to other calls or have other tasks at hand.
Dynamic participant minute calculation ensures that the attendance is tracked every minute/second so that your meetings are truly pay-as-you-go.
This little overlooked fact could add around 20-25% to your meeting cost. So scan closely how your meeting provider is charging you.
Usage-based model with video conferencing API
The examples above took into consideration standalone usage by your teams. However, you could also have a requirement of integrating video conferencing into your website and products. For that you would use a Video Conferencing API.
You would find that both license-based and usage-based models are available in case of APIs. However, the latter model is more popular in this case.
Based on how many meetings take place and for how long, usage-based calculation is done automatically by the API providers. The calculation remains like the example shown above.
License based vs Usage based - Which one to choose?
Now that we understand these two models around video conferencing costs, the decision of which one is best for your business is rather simple.
If you are a school or an organization where 100s of participants join and meetings cover the entire duration of your business hours, license-based payment model is a better choice.
However, if meetings are not happening throughout the day or if the participant count is less, you can save big by paying only for what you use.
You save even further during weekends and holidays.
Our take on the matter
If you are on license-based model already, look closely at your usage and ensure that your licenses are not underutilized.
For API integrations, usage-based model should be your ideal choice in most cases.
Still not able to decide?
Use the Clan Meeting pricing calculator to punch in your approximate usage numbers and get your estimated monthly costs instantly. Compare it with the license-based model to make a final choice.
Let us know which model you selected and why in the comment section below.