Amazon is launching an innovative licensing and publishing program targeting the flourishing world of online fan fiction—unauthorized amateur works created by fans and based on popular copyrighted franchises. Amazon Publishing has negotiated licensing agreements in advance with such properties as L.J Smith’s Vampire Diaries and Warner Bros. These, and other copyright holders, will support Kindle Worlds, a new commercial publishing program that will enable fans to create original works based on established franchises, and earn royalties for doing so. In June the Kindle Worlds self-publishing portal will be available for fans to upload their stories.

Kindle Worlds will allow fans to create new works based on copyright characters and sell them in the Kindle store under a broad licensing agreement that will pay both the fans and the copyright holders, who are called World Licensors under the Kindle World agreements. Under the Kindle World license, Amazon will pay the license holders a royalty as well as paying the fan-author a royalty of 35% of net revenue (based on the list price, not wholesale price) for works of at least 10,000 words. Royalties will be paid monthly.

In conjunction with Kindle Worlds, Amazon is also launching a new program that will publish very short works, stories between 5,000 and 10,000 words, that will be priced at 99 cents. Amazon will also pay its World’s rights holders a royalty in addition to paying the new author a royalty of 20% of net on these stories.

In June Amazon will open a self-publishing portal for fans to upload their Kindle Worlds fan fiction for publication. Amazon will also kickoff the launch of Kindle Worlds store with 50 commission works from bestselling authors like Barbara Freethy, John Everson and Colleen Thompson.

Philip Patrick, Director, Business Development and Publisher of Kindle Worlds, said, “Our goal with Kindle Worlds is to create a home for authors to build on the Worlds we license, and give readers more stories from the Worlds they enjoy. We look forward to announcing additional World licensing deals in the coming weeks.”

While Fan Fiction is enormously popular on the web, it can be viewed with a mixture of antipathy and wary tolerance by copyright owners concerned about infringement as well as unconventional or offensive depictions of copyrighted characters. The program will allow fans to indulge their penchant for creating new interpretations of their favorite works while giving copyright holders control (and new revenue) and at the same time allowing fans to expand the reach and popularity of these franchises.

Nevertheless, Fan-authors should make sure they read the fine print on Amazon’s publishing contract. Amazon will own global publishing rights to all Kindle Worlds stories for the entire term of copyright and Amazon will set the prices (99 cents to $3.99). While fan-authors own copyright to any original elements in the stories, like new characters and events, the original World Licensor retains copyright to the original context of the fictional world. All stories written in a particular licensed world must stay in that world and other Kindle World fan-authors can build on that world as well. In addition, the licence holder or World Licensor has the right to use these new elements in new works without further compensation to the fan-author.

Sara Shepard, author of Pretty Little Liars, one of the titles licensed by Amazon’s Kindle Worlds, said, “Seeing Pretty Little Liars fans adapt and create their own stories is both exciting and flattering and I think what Amazon Publishing is offering through Kindle Worlds is a great way to reward their ingenuity.”