Fan fiction - new stories inspired by popular books, shows, movies, comics, music, and games - is not new. Titles such as Fifty Shades of Grey, by English author EL James, started life as fan fiction and features characters from the Twilight books.
So Amazon's recently announced 'Kindle Worlds', its new fan fiction platform, is capitalising on a well-established genre rather than inventing a new one.
Amazon has started by doing a deal with Alloy Entertainment, Warner Bros' book packaging division, covering three book/TV series crossovers: Gossip Girl, The Vampire Diaries and Pretty Little Liars.
The deal enables Amazon to licence 'fanfic' authors to write new stories based on the characters and themes featured in the 'Worlds' created by the authors of the original works. Other World licensors will be added. Fanfic authors get 35% of net revenues, after royalties are paid to the World licensors, from Kindle sales.
In Kindle Worlds, Amazon Publishing stands as publisher at the centre of the fanfic universe. It takes licenses from the authors or other rights owners of the 'Worlds'. Whilst World licensors no doubt retain the underlying copyrights and trademarks, Amazon gets worldwide publication rights in the new fanfic works via an exclusive licence from fanfic authors over the story and new elements they create.
I would guess that rights in those new elements accrue back to the World licensors, subject to Amazon as publisher being able to license them to other fanfic others to create new works. That way, the 'Worlds' continue to grow.
I think Kindle Worlds is important for at least three reasons. First, it is a further advance by Amazon into the publishing world, and demonstrates how it is able to leverage its technical platforms and 'end-to-end' supply chain from author-to-platform-to-consumer device, to create additional revenue streams.
No wonder that at one end of the publishing industry spectrum, major players are thinking hard about mergers in order to gain scale; and at the other end, niche players are looking at creating vertical sectors in which they compete through specialisation.
Second, whilst fanfic will continue outside Amazon's walled garden with its proprietary technology, Kindle Worlds will also see that garden grow. For many consumers that is great, and the convenience of the 'one click' experience with Amazon outweighs any downsides for them by being tied in to the Kindle platform. But others will think hard about that, and wonder whether they want their content available on any device, any time.
Third, Kindle Worlds is a great example of how intellectual property and derivative works have moved to the heart of the publishing business model, driven by the reader/consumer. This goes well beyond fan fiction. Intellectual properties in literary works, including underlying themes, plots and characters, together with formats, brands, software and online communities, together form the heart of the publishing ecosystem.
A publisher may first publish a story as a print or digital book, but that may soon be followed - or even preceded - with a partnership for a full or short form television programme which is broadcast or available as a 'VOD' services, a computer game, live event or in a variety of other formats.
In this 'hub spoke' world, a clear and effective IP strategy to manage rights across a range of works and multitude of platforms is not just a part of the legal function; it is at the very heart of publishers' business models in the 21st century.