On today's blog:
- Is sewage the fuel of the future?
- One graph on the miners’ iron ore break-even costs
- Christmas shopping: Retailers think we’ll spend more, CBA suspects we’ll spend slightly less
- Snail mail as a luxury? Stamps are about to get expensive
- This graph puts the big four bank’s customer satisfaction crusade in perspective
- Behind the cuts: the basics of the ABC’s budget
- Interesting reads from around the web
Got something you would like to add to the blog? Email (email@example.com) or get in touch on Twitter.
3.50pm - Is sewage the fuel of the future?
By Chris Kohler, BusinessNow
The contents of your toilet could soon be powering your car and helping to cut down greenhouse gas emissions, according to Scientific American.
Yesterday we posted about the new Toyota, which runs off hydrogen and only emits water. But some critics have raised concerns about the fuel's availability.
Well, it turns out the process of converting hydrogen into motor fuel can be a load of crap.
California-based FuelCell Energy is operating the world’s first 'tri-generation' plant that converts sewage into electrical power for an industrial facility and renewable hydrogen for transportation fuel.
The system runs on anaerobically digested biogas from the Orange County Sanitation District’s municipal wastewater treatment plant.
The energy station produces approximately 100 kilograms of renewable hydrogen per day, which is enough to fuel up to 50 cars.
2.50pm - One graph on the miners’ iron ore break-even costs
This graph from The Australian’s BusinessNow blog shows the break-even costs for the miners. This essentially means that regardless of sales, the miners with break-even costs above the red line will make a loss on the sale of their product.
As for how it has affected their stock prices, here’s our latest news story on the iron ore price.
“This week’s sharp falls have stirred a heavy sell-off in the stock of iron ore miners, with Fortescue Metals Group, BC Iron and Mt Gibson among the hardest hit, with double-digit percentage declines. All three are now trading at 52-week lows and have lost more than 50 per cent of their value since the start of the year.
"Diversified giants BHP Billiton and Rio Tinto have held up comparatively well, but are still losing ground in otherwise flat markets. Both firms saw their UK-listed stock give up 2 per cent in overnight trade, representing their worst offshore session for the week and pointing to another day of red numbers on the ASX.”
12.20pm - Christmas shopping: Retailers think we’ll spend more, CBA suspects we’ll spend slightly less
To shop or to save, that is the question. Image: AAP
CBA’s latest annual forecast is in, and according its research we’re expected to spend slightly less on everything except vacations this Christmas. In fact, the bank predicts that nationally we’ll spend $572 million less on all the usual trimming this Christmas. You can see a three-year breakdown of forecasted spend per person below.
Good to see CBA’s forecast a bit different what retailers expect this Christmas. Deloitte’s survey of retailers from last month suggests that the majority expect slight sales growth, not a decline.
10.55am - Snail mail as a luxury? Stamps are about to get expensive
After this change, these stamps will be considered cheap.
By a staff reporter
Australia Post’s efforts to reduce the red ink in its struggling letters business could lead the firm to radically lift the price of stamps from 70c to $1, The Australian Financial Review reports.
Australia Post chief executive Ahmed Fahour has reportedly requested a rescue plan from the Abbott government by Christmas amid losses of over $300 million in its letter division last year.
“The first thing we want to do is reform our letters service,” Mr Fahour said, according to the AFR. “That means changing our prices, our services and our operations so that they are more aligned with the community’s contemporary use of letters.”
The current plan would see a two-tiered pricing structure, with speedier delivery to cost significantly more than non-urgent deliveries.
10.30am - This graph puts the big four bank’s customer satisfaction crusade in perspective
Not this one, the one below. Source: Roy Morgan
Westpac today pipped Commonwealth Bank Australia in the Roy Morgan monthly customer satisfaction index. It’s a big win for Westpac, given that all of the big four -- along with many other consumer facing companies -- are on a mission to win back trust going into this new disruptive digital age.
When it comes to customer satisfaction, we love to portray the banking sector as a four-horse race. The graph below from Roy Morgan adds some perspective to the issue. Westpac, CBA, ANZ and NAB have all come a fair way in winning back customers over the past decade. But it’s telling that Australian consumers are still more satisfied with the services provided by credit unions and overseas banks than they are with those of the major players.
10.20am - Behind the cuts: the basics of the ABC’s budget
The axe has finally fallen on the ABC. After much conjecture, communications minister Malcolm Turnbull yesterday announced that the public broadcaster will suffer a $254 million reduction in its funding over the next five years. This leaves it with $5.2 billion of government funds over the same period.
So what does this mean for the ABC? Can efficiencies be found in back room operations, or will the broadcaster need to chop and change programs to balance its books? This debate will unfurl over next couple of weeks, especially after ABC chief Mark Scott formally replies to the government’s announcement. But for now, here’s a basic rundown of how the ABC’s budget actually works. We pulled the graphs from the broadcaster’s latest annual report.
The ABC receives the majority of its funding from the government. Parts of that funding, however, are funnelled towards transmission costs, leaving the ABC with just over $850 million a year to put towards operations and programming.
It’s this operational revenue from the government that is at the centre of the funding debate. The ABC’s budget peaked back in 1986.
The lion’s share of the ABC’s funding goes towards its TV production unit (which includes TV news), followed by its radio unit (which includes the rest of its news operations, namely online). The ABC now spends around 75 per cent of its budget on content creation, up from 70 per cent five years ago. In the past five years it’s set aside around 1.5 per cent of its budget for ‘innovation’.
Finally, it’s worth noting that not all of the ABC’s funding is from government. The broadcaster also generates revenue from a variety of commercial operations, which it then funnels back into content production. Though in recent years, its commercial arm’s revenue has nosedived. Its retail operation, which buoys the majority of its commercial division, has suffered from the rise of e-books and the digital distribution of content. This year marks the first time this division has seen positive revenue growth in the past five years. Today’s announcement of a new inflight streaming deal with Virgin Australia is just one example of how it’s working to grow its commercial revenue base.
Given the thrust of the executive overview of the government’s ABC and SBS efficiency review, the government may expect the ABC to grow this ailing unit to fund future revenue. Of course, the government has no control over how the ABC spends its operational revenue, so it’s all up to the broadcaster.
9am - Interesting reads from around the web
The end of regional TV: Why Nine Entertainment boss David Gyngell is extremely keen on the rise of streaming technology.
Now that Netflix is finally launching in Australia, here’s a list of the US companies that may be interested in acquiring it.
Unlikely success: How MailChimp’s ad has generated its own following by tying itself to viral content.
The best remedy for Ebola? Drinking over four litres of water a day.