Amazon ventures into fanfic. But can it make money?

The ecommerce giant has announced the launch of Kindle Worlds, a fan fiction publishing platform that will give super-fans of Gossip Girl, Vampire Diaries and Pretty Little Liars a place to let their imaginations run wild — and legally make money writing about characters somebody else dreamed up. Analysts say giving fan fiction mainstream status pulls social and interactive elements into media consumption. It also positions both Amazon and the franchise owners to take a cut if another fanfic-inspired blockbuster like E.L. James’ 50 Shades of Greyseries — which started out as Twilight fan fiction — emerges.

“I think it’s a way of expanding the social aspect of what Amazon has done to date,” said Scott Tilghman, analyst at B. Riley & Co. “Amazon has been somewhat instrumental in changing the way publishers operate … to offer more independence, greater opportunity.”

Amazon said Kindle Worlds will open for business in June, and that it plans to add more franchises. The original owners of the material will have some say over what they deem appropriate use, and Amazon has some rules of its own, like prohibiting pornography.

Getting more people — especially die-hard fans — on board turns the solitary act of reading or watching into a conversation as they review and build on each others’ work. “I think it just builds the network effect, which is one of the cornerstones of Amazon’s competitive advantage,” said R.J. Hottovy, senior ecommerce analyst at Morningstar. “The more people use (the platform) and discuss, the more powerful it is for people who sell things.”

Fanfic authors who write stories of 10,000 words or more will earn royalties of 35 percent, while shorter pieces of 5,000 to 10,000 words will get 20 percent. It probably won’t translate to big bucks for most; Amazon plans to price fans’ stories at $0.99 to $3.99. The one big drawback for fan-writers is this bit of fine print: “We will also give the World Licensor a license to use your new elements and incorporate them into other works without further compensation to you.”

Michael Norris, senior analyst at Simba Information, said the plan has other drawbacks, suggesting it prioritizes quantity over quality.

“I don’t think it legitimizes fan fiction so much as it further deprofessionalizes publishing,” Norris said via email. It can also backfire, because if a consumer really wants to read something about a property or a character that they love, they might have to sift through a lot more garbage.”

Hottovy said this probably wouldn’t be as much of a risk. Fan fiction readers know what they’re getting into, and the market already exists, albeit without commercialization. “There certainly is a very select audience for this type of content,” he said. “I don’t think it would dilute the overall franchise or the overall brand.”

It also lets both the original content owners and Amazon take a piece of the pie if a fan fiction creation turns out to be as popular as the story that inspired it, Tilghman said. “If you have another unexpected success like 50 Shades, it’s a way for Amazon to be a participant.”

Even without a blockbuster, Tilghman said legitimizing fan fiction lets franchise owners squeeze more money out of their existing intellectual property without having to, say, take a gamble producing a spin-off that might flop. “It’s a way for them to potentially expand on the revenue sources they have for those existing characters,” he said.

It also takes the guesswork out of figuring out how to grow a mature franchise. “Sometimes when you have various works coming out with multiple sequels, fans can become tired of them,” Tilghman said. Kindle Worlds sidesteps that risk by letting the fans create the sequels and spin-offs they do want.



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