Amazon's Kindle Worlds: Monetizing Fan Fiction

In an August 10th, 2013 post to curiouserinstitute, transmedia pioneer Reed Berkowitz writes about how the advent of legally licensed fan-fiction is creating a new source of revenue for traditional rights holders and their most creative and engaged fans - as well as a new "class of fiction between pure canon and traditional fan-fiction."

Reed Berkowitz notes that "Amazon is leading the industry in this space with its Kindle Worlds store which allows anyone to legally create, publish, and profit from fan fictions created using participating intellectual properties. For the first time fan and canonical stories are being sold side by side completely legally with both sides profiting."

Amazon's Kindle Worlds launched in May 2013 with licenses from popular TV shows like Gossip Girl, Pretty Little Liars and the Vampire Diaries.

What was truly groundbreaking about the Kindle Worlds initiative was that Amazon agreed to pay royalties to both the rights holders of the underlying work and the author of the fan fiction. 

While the amount paid to the big media companies (which allowed fans to legally copy elements of the storyworld from their favorite TV shows) was not disclosed - Amazon promised to pay the authors of fan fiction 35% of net revenue for works of at least 10,000 words.  Fan work of between 5,000 and 10,000 words - which will typically retail for under one dollar - would only pay the fan fiction authors a digital royalty of 20%.

Here's how Amazon announced "the first commercial publishing platform for fan fiction" in a May 2013 press release: 

"Today, Amazon Publishing announces Kindle Worlds, the first commercial publishing platform that will enable any writer to create fan fiction based on a range of original stories and characters and earn royalties for doing so…. Through these licenses, Kindle Worlds will allow any writer to publish authorized stories inspired by these popular Worlds and make them available for readers to purchase in the Kindle Store."

Remember, it wasn't only the author of the fan fiction that stood to benefit. As Reed Berkowitz notes: "By agreeing to the Kindle Worlds license everything written suddenly becomes "potential canon". The reason for this is that when you submit a story to Kindle Worlds you give Amazon an exclusive license to everything in your story and they pass that on to the World Licensor as stated here: "When you submit your story in a World, you are granting Amazon Publishing an exclusive license to the story and all the original elements you include in that story. This means that your story and all the new elements must stay within the applicable World. We will allow Kindle Worlds authors to build on each other's ideas and elements. 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.""

Thanks to Nick DeMartino for the link.