George R. R. Martin (A Song of Ice and Fire) on why fanfiction is a bad thing for authors.
http://grrm.livejournal.com/151914.html
Part of me cringes when I read it, because I know many authors (Eric Flint, for instance) who believe that the exact opposite is true. However, I also know that while Martin is faaaaahhhbulously wealthy (okay, he has a positive bank account), Mr. Flint, who ran the Baen Universe e-zine, just had to close up the shop on the e-zine for lack of money. So… draw your own conclusions.
Me? I like fanfic. Some of the Harry Potter fanfic is humorously decent. However, I’m also under the belief that you play in someone’s sandbox with their permission only, and I know J.K. Rowling hasn’t given anyone permission to build little Hogwarts in her world. So yeah, I think I actually agree with Mr. Martin on this one.
Authors who write for a living have one general source of income: their writing. Take that away, demean it, and all you have left is a starved and malnourished H.P. Lovecraft.
Jason Córdova 
Hmm. The closing of Baen’s Universe is irrelevant to this point, as it was not a fanfic magazine. I should think the continuing success of the Grantville Gazette (fanfic in the “Ring of Fire” universe) is more to the point.
Good point. For some reason I had Baen’s Universe and the GG linked in my head.
I believe HPL didn’t help his cause by being rather too willing to let himself get distracted by answering fan mail and the like. I suspect that he just wasn’t as driven by a desire for money as ERB …
Which is a shame. His estate should at least still have the rights for all the boardgames, video games, books and whatnot released using his novels as a basis.