Recent articles have the owner of EC saying that a sudden drop in sales at Amazon are the big problem. But it doesn't take much searching to find that she's had tax liens against her, tens of thousands of dollars, since at least 2010. They get paid, apparently, and then new judgments appear later, but the government doesn't resort to a lien until taxes have gone unpaid for some time.
Just based on that, I'd assume poor financial management to be most of the problem, not Amazon's algorithms. The recent big push for a teen-mom/porn actress' book that tanked also seems to have been a poor financial move. The owner said there was no advance. Okay, but these flash-in-the-pan, pseudo-celebrities typically don't do anything they don't get paid for. I wouldn't in their shoes--they have to make hay while their five minutes of sun shine. But let's say there was no advance. They used company resources to create and push this book, time and resources that weren't spent on other books, and it's apparently not what people came to expect from EC.
I wouldn't submit there anytime soon, personally. Too many things going on, too many problems, too much that points to the possibility of going under. I hope it doesn't--EC is kind of the erotica ebook flagship--but the signs aren't good right now.
