Amazon’s Kindle Worlds is looking to cash in on fan fiction by licensing popular brands. They’re paying authors 35 percent royalties

June 14, 2013 Leave a comment

Amazon Wants to Sell Your Fan Fiction Through Kindle Worlds

By Olga Kharif on June 13, 2013

For those who can’t get enough of The Vampire Diaries or dream of further installments of Gossip Girl, Amazon.com (AMZN)may have the answer: fan fiction. The company’s Kindle Worlds e-book venture has licensed the rights to these two soapy teen drama series, as well as another called Pretty Little Liars, and is inviting amateur writers to develop novels and short stories inspired by the characters and back stories of the original works.

Amazon is trying to tap into one of publishing’s hottest trends. Fanfic websites, as they’re known, include millions of aficionado-penned stories, many dating back well over a decade. One site, FanFiction.net, offers nearly 650,000 stories about Harry Potter alone. Once a niche genre, such sites have gained commercial legitimacy since the Fifty Shades of Greyseries, which sold more than 70 million copies in print, audio, and digitally from March to December 2012. The bondage-romance series, which began as Twilight fan fiction, was a bright spot for the publishing industry last year amid slowing growth of trade e-book sales. (Sales grew 44 percent in 2012 but more than doubled in 2011, according to BookStats, which tracks U.S. publishers.) “The hope is that it could be very big,” says Les Morgenstein, president of the Warner Bros. Television Group division Alloy Entertainment, which owns rights to The Vampire Diaries, Gossip Girl, and Pretty Little Liars.At fan fiction sites, writers submit stories for free to avoid running afoul of copyright laws. Amazon seeks permission from the original works’ owners and splits any profits from its fanfic with them and the amateur writers. The writer gets 35 percent of retail sales from a book-length story, and the originator is likely to get 35 percent, leaving Amazon with 30 percent, estimates Peter Hildick-Smith, founder of market

Much of Kindle Worlds’ success will depend on whether Amazon can line up licensed fan fiction based on a wider array of pop culture icons, whose owners might worry about cheapening their creations. Scholastic (SCHL), a publisher of the Harry Potter and Hunger Games series, declined to comment. Bloomsbury, Potter’s U.K. publisher, didn’t respond. Fanfic authors accustomed to writing whatever they want may also be turned off by Amazon’s prohibitions on pornography or the introduction of characters from different series; Tyrion Lannister can’t just drop in onGossip Girl. And there’s the question of how willing readers will be to pay for stories from up-and-coming writers. To get things rolling, Amazon has commissioned 50 fanfic books from established authors. Romantic suspense writer Colleen Thompson, the author of roughly 20 books, wrote a 36,000-word Amazon-commissioned Pretty Little Liars novella. “I think there’s a huge audience out there for fan fiction,” she says, adding that she plans to write another fan fiction story on spec.

Amazon will roll out fan fiction for other popular book series, perhaps along with TV shows, movies, and video games, in the coming months, says Kindle Worlds publisher Philip Patrick, who is also Amazon’s director of business development. “The types of worlds will broaden,” he says. “This is a major initiative for us. It’s a big deal, and we are working to make it successful.” If he succeeds, look for Barnes & Noble (BKS) and Apple (AAPL) to follow Amazon into fanfic sales, says Digital Book World’s Greenfield.

The bottom line: Kindle Worlds is looking to cash in on fan fiction by licensing popular brands. They’re paying authors 35 percent royalties.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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