As the e-book industry matures and users amass progressively larger content libraries, generating incremental e-book sales may become increasingly difficult. When the Amazon Kindle was introduced in 2007 and customers began building digital content libraries, the product had a relatively high attach rate, in our view. Now that the Kindle has been in the market for over 5 years, we believe the attach rate has declined. This is especially true as a larger proportion of Kindle sales are “upgrade-sales”, in which case, the customer already owns an existing content library. Data from BookStats shows that e-book revenue has decelerated every year for the past 4 years.
According to The Digital Reader, 76% of public
