Under the lipstick, that pig is still a pig.
Under the umbrella of Random House, the new imprint known as Hydra looks like a vanity publisher with all the same undesirable practices.
Random House bought Author Solutions, and why not? The publisher's executives could not help but notice that self-published authors like Hugh Howey were pulling in big money, all on their own, and all for themselves.
What publisher wouldn't want a piece of that action?
And so, Random House opened up a department for digital-only publishing. If an author should break out of the pack, like Mr. Howey, Random House would be there to offer a traditional print contract.
Where Random House went off track was in crafting a contract that drew too heavily on the Author Solutions model. Author Solutions is more about selling services that cost a lot of money, such as marketing or editing or cover design, than it is about actually publishing. It's the author paying up front, rather than the publisher investing in the author.
Did they think that the tech-savvy sci-fi author community wouldn't notice that the contract Random House developed for their Hydra imprint was too much like an Author Solutions contract?
Random House is not at all pleased to have Hydra de-listed from the Science Fiction and Fantasy Writers of America list of approved publishers. SFWA looks out for its members, and while looking, they noticed that Hydra's contract was painfully similar to the sort of exploitative agreements used by non-traditional publishers. What made it worse was that Hydra bore the Random House label, implying legitimacy while not doing things in a traditionally legitimate manner.
In short, SFWA felt that authors were being duped, and so they advised sci-fi authors to avoid Hydra.
Sure, Hydra's contract is different, as a Hydra executive proclaimed in response to SFWA's lambasting. But different is not good when different is more like a fee-charging vanity press and quite the opposite of a traditional publisher. Things like not paying advances, or placing the burden of publishing costs on the author, are not practices that SFWA will condone.
Random House has veered off into well-charted territory, but they are only just learning how well that territory has been charted by groups of writers who won't sit on their hands while future writers are getting ripped off.