Hi folks, The Bookloft here. Some of you may have heard of Amazon's new Kindle Worlds program, and its strategy for monetizing fanfiction. We've been getting questions about our thoughts, and here is an overview.
Fanfiction writers from around the world write stories featuring characters and ideas from their favorite media in new context. This can be used to illuminate certain hidden textual clues from the original story, or for flights of fancy about how it could have been, or sometimes purely for titillation. A major demographic of fanfiction is 18-35 year old women, often seeking and writing content that is inherently adult. One particularly popular flavor has become "slash" fiction, in which characters of the same gender become romantically involved despite this not occurring in the original story. Stories are posted online, and people discuss, laud, and critique pieces, often borrowing ideas from each other and expounding on them further. Fan authors and readers can create deep personal bonds through this method - large online communities have developed around this model; one can already see why traditional publishers take some objection to this. Fanfiction, though, is not created for monetary gain, making copyright issues in the fanfiction communities a legal gray area. Publishers are usually content to leave these groups alone, as long as nobody is profitting off of infringed authorial rights.
Opinions about fanfiction vary among authors: George R.R. Martin is opposed to fanfiction in general (and especially without authorial consent); J.K. Rowling supports Harry Potter fanfiction, as long as "it remains a non-commercial activity to ensure fans are not exploited and it is not being published in the strict sense of traditional print publishing;" and the Tolkien estate is notoriously tight with the rights to his legacy
Read more here.