Ring Tones: The Next Napster, or the Next Y2K?

We’re told that one major insurance company views cell phone ring tones as the “Next Napster.” They reportedly don’t want anything to do with anything related to ring tones.

We know a little about ring tones. We underwrite insurance for some of the industry leaders in a vibrant niche that offers personalized ring tones to cell phone users.

The next Napster? We don’t know what’s meant by that, but we see no correlation between Napster and ring tones. One is a company that facilitated the infringement of intellectual property rights on a scale never before seen in history. The other is a legitimate industry operating within the bounds of the law and taking steps to secure rights and to protect intellectual property.

Sometimes companies over-react to a claim they’ve had and exaggerate the risk for other accounts. That’s when the free-market system operates at its best.