I want to comment on a few points...
So... a small press that offers any other service (editing, cover design, etc.), even if it is NOT to an author they themselves publish, cannot be on the approved list of publishers, even if they meet all the other requirements. What's up with that?
Why does a publisher offer editing, design services to authors they are not publishing? I don't understand. Are they publishers or are they editing services?
I can understand wanting to maintain arms-length business distance, and I can understand not recommending that authors coming to you need an editor, then requiring that they pay you to edit the book... but if someone who is publishing with another company wants to pay me to have an editor go over their book so it looks its best, what is the harm?
He is getting it wrong. If he wants to get paid to do the editing work, then he shouldn't be doing that as a publisher! Use a different business name: "John Smith's Editing Service" or some such. And don't push his authors to use "John Smith's Editing Service."
Does he understand the concept of "conflict of interest"? Seriously, does he want to be a publisher or an editing service? Pick one, but not both.
If I offer the service of creating book trailer videos, and that author's publisher does not offer that service, why should I be excluded from the list of approved publishers because I have marketed that service to someone who is not my author?
Again, it's conflict of interest, and if he wants to get into the "editing/book trailer" or whatever services, he should do it as a SEPARATE business and that would not have problem with the organization as a publisher. He's just whining here because he can't have his cake and eat it, too. And he seems like the kind of publisher I'd like to avoid.
The way I look at it, the org only wants to make sure that they don't include publishers that scam authors or sell them editing/supplementary services. Really, money should go to the author's pocket. A legit publisher would not charge for editing -- the editing is part of the publication process once they SIGN an author. They shouldn't say "we'll publish you if you get this edited, and we (or an editor we recommend) would do it for $1000). Even if they're only doing it for authors they are not publishing, again, it's conflict of interest and it's hard to tell who is legit and who isn't.
The same problem as publishing at least five titles each year--some small presses seek quality, not quantity, for whatever reason. Why exclude them?
Five a year isn't that much. Quality over quantity? IMHO, if you're publishing only one or two books a year and you've been in business for over 2 years, you're in trouble. How many books do you need to sell to make your business viable? 1000 copies? 2000? 5000? With fewer than five titles a year, it's not easy to achieve that goal even if you're super small.
Many authors, because of their race, gender, belief system or even age, have a hard time being accepted by the bigger NYC houses. The reason is, they're not potential blockbuster authors... many women, older authors, authors from particular ethnic groups, authors with particular beliefs, have a very, very hard time even getting an agent to look at their work, much less getting it past the slush pile of a big publisher. Why penalize those struggling and often quite talented authors by excluding them automatically?
That's a hyperbole. Authors of all races, backgrounds, cultures, and belief systems have been published by big or medium houses, or even small houses that meet those requirements. If they have a good book, they have a chance. To say "they can't get published because they're not potentially blockbuster authors" -- that's just BS.
I haven't read the list so I don't know if they are indeed discriminatory. But I doubt it. I hear this all the time: "first time authors, especially if they're racial minorities, can't get a break." That's just not true. Come to AW and you will see plenty of first-time authors, of all races, do get published.
* The list is transitory and unstable. The MWA is constantly in the process of updating the list of approved publishers. I check there regularly, and it amazes me how often I see that it has been updated.
It's because publishers come and go, especially smaller presses. The Writer's Guide, for example, is constantly updated for exactly the same reason. I mean, seriously.