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Fired Write For Hire Author Now Writing Authorized Fan Fic Based on the Series She Was Fired From
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"Wacky" hardly describes it. Like something thought up by Tom Sharpe as definitely over the top and out of this world -- happening in your front garden.



I can't understand why she should want to give these people the benefit of whatever her name is worth by writing fan fiction for them free of charge.

The author is publishing this through Kindle Worlds, an authorized Amazon self-publishing arm for fan fic. It's kind of like KDP just with more caveats and what not (and a list of very specific IPs; it's not just a true fan fic free-for-all).
She'll get 35% of the Amazon set price (which they usually set between 0.99 and 3.99).
I don't know how the split of the remaining revenue between the license holders and Amazon for KW properties works.
So, she's not doing it for "free" overall, but she's also not getting any advance or anything from Alloy, so it's effectively free to them in terms of advances, editing costs, promotions costs (well kind of, I guess they'll still be marketing VD in general), and all that nonsense I suppose.
The big disadvantage of KW vs. KDP is that the license holders have the right to take any story elements, ideas, et cetera developed in the fan fic and then use those at will in any other properties without additional payment. Theoretically, if they ended up really liking her books, despite the whole fight being about the direction to begin with, they could take them and just adapt them to the show or a movie or a Broadway musical or whatever, and she'd see no additional money from it.
So, theoretically if these books do well, not only will Alloy get money (again, I don't know their split with Amazon, but Alloy has no costs in this as well), but they may get material they know resonates with the fans, which is a bit of risk for L.J. in the sense she could just see her vision get exploited even more by Alloy.
Then again, maybe she just really wanted to finish the story.

The only thing I can think is that, beyond loving the characters, perhaps L.J. Smith's inside knowledge led her to believe that writing for KW was a reasonable choice for her. Either that, or she's writing something she knows well while waiting for inspiration for a new story. Or maybe writing the known is psychologically easier even with the potential drawbacks than striking out into unknown writing territory. Sunk costs, you know.
Or maybe she's so invested in that world, it has given her tunnel vision. This whole affair is unhealthy.

Unhealthy is a good word for it, better than what came to mind for me: Bizarre...
That too. But the bizarre is normal now in the behavior that writers will accept, indeed expect, from publishers.
The capsule version is this. L.J. Smith did write-for-hire work on the teen vampire paranormal series, The Vampire Diaries.
The series was somewhat popular pre-Twilight, and then has really exploded in the post-Twilight world, especially because its had a decently popular TV show on a network that is mostly YA targeted (the CW).
So, L.J. Smith got booted from the series because the men and women writing the checks wanted changes that she objected to.
She's now is using Kindle Worlds (which includes many properties by Alloy Entertainment, including the vampire diaries) to write authorized fan fic and make money still off the property.
Please note that Alloy Entertainment specializes in producing YA concepts that they can push as novels and then as teen targeted network and movie programming. They make heavy, if not exclusive use, of write-for-hire authors.
I encourage you read the article for more detail. One weird quirk is the article claims that Alloy authors get "only 50% of the profit".
If, by that, they mean 50% net off cover price, wouldn't that'd make Alloy one of the most generous publishing companies out there, and, on top of it, probably of the single most generous right-for-hire sorts? I'm guessing though, that's not actually what's happening. I read one thing a while back about Alloy contracts, and they were considerably less impressive that that. Better than say James Frey's write-for-hire royalty structure, but not anything better than normal decent-size trad stuff.
Any event, setting that aside, the whole concept of an author writing 'fan fic' of her own work is just kind of interesting.
Just another one of those 'oh, publishing's so wacky these days!" type stories.