Today in Connected Consumer

One day after Netflix saw its shares plummet 35 percent in the wake of its third-quarter earnings report, it’s Amazon’s turn to tumble. Shares of the e-retailer were off nearly 10 percent in early-morning trading after posting a steep drop in earnings Tuesday. In both cases, the costs associated with transitioning away from the DVD business played a role. In Netflix’s case a sharp drop in subscribers has raised doubts that it can afford to pay the soaring costs of acquiring streaming rights to premium content. In Amazon’s case, the new Kindle Fire is expected eventually to boost Amazon Prime video streaming,but ¬†for now, the retailer is losing money on the tablets, compressing margins. The question for both is whether they’re really transitioning to a better day, or simply into permanently slimmer margins.