How long does Respondus store the videos from the exam sessions?
Up to five years. That’s the default. We store the videos themselves, the flagging information, and other data about the exam session. The retention policy is set by the institution, so it might be shorter at some universities.
Speaking of 5 years, where do you think online exam proctoring will be in that timeframe?
It’s hard to make five year predictions with technology. But things move slowly in higher education, so I’ll bite. [Laughs.] I don’t know if it will be 5 years or 10 years, but there’s little doubt in my mind that automated proctoring will be ubiquitous on campuses at some point, much like anti-plagiarism software is today.
Right. The price point for automated online proctoring is already low enough to enable widespread adoption. I mentioned earlier that we have the cost down to about 30 cents an exam session [for Respondus Monitor], but we hope to push that even lower over time. One of the things holding back widespread adoption [of automated proctoring] at universities is budget politics. Proctoring technology is generally seen as a distance learning or online learning expense. Sometimes individual departments will pick up the cost, such as a nursing or business school. But at 30 cents an exam, an institution actually saves money compared to a paper-based exam delivered on campus… The Scantron sheet might be 15 cents, the printed exam might be another 30 cents, there are costs for scanning the answer sheets, storing the printed materials after the exam, costs for the classroom where the exam is delivered, proctoring costs, and so on. The total cost [for paper-based exams] is much more than 30 cents…. Testing centers aren’t the answer either because they are quite expensive to set up and run.
How much of a cost savings are we talking about?
The savings [for automated proctoring ] is very small for a class of 25 students. It might save only tens of dollars. But the savings can be hundreds of dollars for larger courses, and tens of thousands of dollars across departments. And when you look at the cost savings across the entire university, it can be hundreds of thousands of dollars annually — even more if certain overhead costs are included. But as long as the expense for online proctoring is borne by the distance learning or online learning groups, they will ration the service. And without the wide availability of an online proctoring solution available to instructors, they won’t use online testing. They’ll be too concerned about cheating.
You mention rationing. Do you mean that universities will limit instructor use of online proctoring?
Yes, that’s exactly what happens today. They ration it because the cost is coming from their budget. And on the flip side, the cost savings from paper, Scantron sheets, and so on, often doesn’t get credited to them… Once administrators see that fully-automated proctoring solutions like Respondus Monitor actually reduce testing costs across campus, I think the adoption rate will take off.
Are you seeing signs of that yet?
Only hints of it. I was talking recently with a professor at a large university, and she said her department strongly encourages the use of online testing if a class has more than 80 students. It’s openly stated as a cost-savings measure. So if this type of directive occurs more broadly across campuses, there will be greater adoption of online proctoring.
What is the market potential for online proctoring in higher education. I’ve seen numbers in the hundreds of millions [of dollars]?
It’s difficult to offer market projections because live proctoring is currently cherry picking courses where proctoring is an absolute requirement, such as health sciences and business schools. There’s less price sensitivity within this group. But you can’t extrapolate from those numbers because other departments don’t have the same proctoring requirements, and they won’t pay $25 per exam.… Live proctoring is simply too expensive for wide-spread adoption across a campus. If a university has 10,000 courses, the cost to provide live proctoring across those courses would be millions of dollars annually… We believe universities will opt for a fully automated solution, and only use live proctoring for unique situations. And we think the average cost to a university for automated proctoring will be below $20,000 annually. That puts the market potential in the $50 million range. And even that will take many years to achieve.
Can you provide a sense of how widely your system is being used at educational institutions? I’m not after revenue numbers, more about how many institutions are using it, or how many students use it for exams…
We don’t share too much detail on that for competitive reasons, but over 1,000 academic institutions have an enterprise-wide license for LockDown Browser. About one-third of those use Respondus Monitor [the automated proctoring system] with it… In connection with the LMS market, about 35 million LockDown Browser sessions will occur this year. If you include the publishing companies that license [LockDown Browser] for their homework and assessment systems, that number is in the 50 million range… The percentage of LockDown Browser sessions that additionally use Respondus Monitor is still relatively small, but it’s the fastest growing segment for us… These might sound like decent usage numbers, but when you realize that a large university conducts over one million assessments a year, you get a sense of how young this market is.