Can Amazon Monetize Fan Fiction?

Amazon (NASDAQ:AMZN) may have came up with a clever trick to make more money for everyone without entailing a whole lot more work for anyone. The trick: fan fiction.

The major Internet retailer has already been integral in revolutionizing the way books are read with its Kindle eReaders and its massive online bookstore. Now it could be changing the way books and the intellectual property therein are written. Of course, the process of writing won’t change, but the process of coming up with characters and stories could be quite a bit different from traditional literature.

Fan fiction has proven a popular form of writing despite it having next to no profitability. Fan fiction writers can’t very easily make money of a book they write if they don’t own the intellectual property that they write about. Not just anybody is allowed to write a book about Harry Potter or Han Solo and make money on it. But, Amazon may soon be changing that significantly.

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The program, called Kindle Worlds, creates an opportunity for property owners to license out rights, allowing fans to write to their hearts content about their favor characters in their favorite story worlds. In turn, the intellectual property owner gets a slice of the profit without having to put a pen to paper. Of course, Amazon and the writer also get a bite.

Amazon’s current self-publishing system allows writers of original content keep 70 percent of the profit of their e-books. In the Kindle Worlds scheme, writers would get 35 percent for works over 10,000 words, and 20 percent for shorter works. It’s not clear how much the intellectual property owners will get, but it’s likely to be a fair share of the pie.

One snag with the plan is that Amazon will have to get licensing rights from property owners before it can build a really robust Kindle Worlds platform. So far, it only has rights for three franchises from Warner Bros.’s (NYSE:TWX) Alloy Entertainment: Pretty Little Liars, The Vampire Diaries, and Gossip Girl. This might be enough to get things started, but it will surely need more to create a full galaxy of Kindle Worlds. If Amazon can get rights to more popular franchises, like Star Wars or Twilight, then there might be a bigger community of writers chomping at the bit to work on the Kindle Worlds platform — it would also have a ready community of readers.

According to Forbes, authors J.K. Rowling, Stephenie Meyer, and Joss Whedon all encourage fan fiction writers to use their story universes. With Amazon creating a platform for both parties to monetize that fan fiction, it will be time for the rights holders to show how they really feel about legitimized fan fiction.

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The platform is expected to launch in June with a number of commissioned works penned by famous authors ready to go. The platform for self-service submissions is also expected to open at the same time.

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