Ellora’s Cave, the digital-first erotic romance publisher, has laid off both freelance and full-time staff, according to a note sent to its authors by the company CEO blaming the need for cuts on a “sharp decline of e-book sales via Amazon in recent months.”
In a letter sent to authors that was later reposted online, Ellora’s Cave CEO Patty Marks says she has been forced to “cut staff, special EC projects and other expenses.” Mark calls the drop in EC e-book sales via Amazon, “drastic,” and says it has “resulted in large net short-term variable production losses and negative return on investment on almost every new book we publish.”
Marks has not responded to efforts from PW to contact her for comment. This is the latest indication of problems at EC. In May of this year the house addressed complaints of delayed royalty payments, blaming the problems on new accounting software.
According to Marks' letter to EC authors, the house has laid off all of its freelance editors—in a 2013 PW profile of Ellora’s Cave, Marks said the house had about 20 freelance editors around the world and a full-time staff of 30 at its Ohio offices. Marks says that all manuscripts and design will now be handled by EC in-house editors and artists. The blog Dear Author published a response from Marks stating that the house now has a managing editor, three in-house editors and two in-house artists. In 2013 Marks told PW that Ellora’s Cave published about 10 books a week and expected to generate $15 million in sales that year.
In the letter Marks notes that Amazon is EC’s “largest vendor,” says the declines in EC sales seem confined to Amazon and notes that the house is looking to try and determine the cause. “We have not completed our analysis at this point and therefore have not had any direct communication with Amazon regarding these issues,” Marks writes.
In the meantime, Marks encourages authors to encourage their fans to buy books through retail outlets that are not showing similar declines, including buying via the EC website which provides authors with the highest royalties. In order of highest royalty per sales, Marks points to such retailers as B&N, AllRomance.com, Kobo and Google Play.
Marks says that “this is by no means meant to be a statement about Amazon,” emphasizing that she has not yet completed her examination of the situation and has not yet contacted Amazon. Marks also notes that EC royalty checks are being delivered and “we are not bankrupt (rumors).” She also refers to a new project by Jaid Black, the pen name of her daughter Tina Engler, founder of Ellora’s Cave, that will launch in the near future. She says the project is “in no way a publishing company” and says “please be assured that no EC funds are being invested in this venture.”
“Ellora’s Cave has weathered storms before and we will this one as well,” Marks writes. “We are aggressively adjusting our business to the current publishing environment.”