Why was smut not selling? Who could say, but the sales drop was steep and the loss was hurting the bottom line. Changes had to be made to turn things around, and changes were dictated that many Ellora's Cave authors did not like. Editing and cover art was going to be done in-house in future, and if an author had a favorite editor they liked, it was too bad. The publisher wanted to exert more control over the product because how else could they discover where the problems were hiding in that sales decline?
In the event that the problem was with Amazon, known to manipulate sales to bring recalcitrant vendors to heel, the publisher also encouraged its authors to get their readers to buy direct from Ellora's Cave. At least all the royalty that would go to Amazon would then go to the publisher, so there was that little boost to the bottom line to consider.
Authors were complaining before the letter arrived because they weren't getting their royalty checks in a timely manner. Clearly, the publisher was having cash flow problems and was doing what it could to turn the mighty ship of erotica around, but it's tough to balance the books on the backs of the employees, as it were. There were grumblings and suppositions and suggestions that Ellora's Cave was going under.
By mid-September of this year, industry watchdog Victoria Strauss was advising potential Ellora's Cave authors to be careful in submitting to the publisher, which seemed to be following a trajectory suggesting it was indeed going under. Several Ellora's Cave authors had asked for their rights back, complaining of unwieldy pricing policies and the difficulty in getting paid.
There was a post on a blog that laid out all sorts of issues about the publisher that strongly suggested the owner of Ellora's Cave was living the high life while the authors went without and employees lost their jobs. After reading that, who would have any confidence that the publisher would be around much longer? And given that, you'd be mad to submit to such a publisher.
There may be too much competition in erotic publishing these days, what with the many self-publishing options available. Authors could bypass Ellora's Cave, especially those who had established a following, and cut out the middle-man (unless writing about a menage a trois in which case a third party is essential). A blog post that states the publisher was not worthy of consideration would only harm the publisher's chances of recovery, since authors have other options. What could the publisher offer of value to an author besides a brand and strong marketing that were worth the author's investment? If the firm was soon to be unable to do that, a key component of a recovery plan would be ruined.
Ellora's Cave has struck back with a lawsuit against the writer who published the blog post alleging misbehavior and financial mismanagement. The court filing takes on the blog post points and states that they are not true, that there is no funny business at Ellora's Cave and the blog poster is just being malicious and causing further harm that would send Ellora's Cave into a death spiral.
Is Ellora's Cave failing?
We won't know until the case is heard in an Ohio court and a judge decides if Ellora's Cave's rebuttal to the blog post has merit.
In the meantime, potential erotica authors will think twice before submitting, not knowing where their smutty manuscript could end up, and their publication rights with it.