Now, from a strictly "I am a child of the fanfic mines" standpoint, I can see two really awesome aspects to this:
1. If I publish through Amazon Worlds, I can't be sued for playing in someone else's sandbox.
2. I could get paid.
Let me be very clear here: right now, under the law, you can't be paid for fanfic, because then you're abusing someone else's intellectual property. By creating this license, Amazon has essentially set up a licensed tie-in factory, which allows for payment of authors without any illicit exploitation of someone else's IP. There's even a clause in the Amazon Works program which makes it okay for the IP holders to read the fanfic-for-pay: the rules state that if the IP holders want something you created and put in your Amazon Worlds-published fanfic, they can just take it. Since most of the "no please, don't tell me" attitude among some creators comes from fear of being accused later of stealing someone else's ideas, this is a great protection for IP holders.** For fanfic creators, maybe not so much.
"But wait," some people may cry, "are you saying you want fanfic creators to erode your copyright?" No. I am not. For one thing, copyright doesn't work that way. But original characters in fanfic sometimes shed the skins of their origins and go on to have adventures and worlds of their own. A lot of today's working authors started in the fanfic mines, and many of them brought their OCs with them when they moved on. It's easy enough to change things—Penny from The Rescuers becoming Jenny in Oliver and Company when Disney realized they didn't want to put those moves in the same continuity—but still, it creates a potential muddy water scenario that would make me uneasy if I were a fanfic writer in those fandoms, considering submitting stories that contained original characters or ideas. There's also the concern that, well...fanfic writers like to share our toys. My fanon could wind up in your fic could wind up on the show, becoming canon. And yeah, most of us would kill for that, but since there's no way of tracing things back, it could become a case of "I borrow your ideas, the show takes what they think are my ideas, you were never consulted, you didn't get to opt in."
As for the question of payment, I regularly pay people for fan art of Emma Frost, which then hangs in my house, because I am a nerd. Why should paying someone for fanfic, under the right set of conditions, be any different?
But this is all sort of speculation and relatively harmless "maybe." I mean, much of what Stephen Moffat has done as the showrunner of Doctor Who is make his fanon canon, and it hasn't hurt him any; I dream of the day I get to start making some of my X-Men fanon canonical. What concerns me more is the possibility that creating "licensed fanfic" as a category will lead to more of a legal crackdown on "unlicensed fanfic." "Oh, sorry, your archive is outside the bounds of our derivative works licensing, here is your C&D."***
I've seen a lot of people talk about how fanfic works because it is a community effort. And I've seen a lot of the "ha ha all fic is porn, this won't fly" laughing. But what I haven't seen much of is acknowledgement that fanfic is a way for marginalized people to take control of stories that are so often aimed at a sort of safely privileged able-bodied straight male whiteness, engage with them, and fall more deeply in love for that engagement. Fanfic gave me women who were allowed to be strong, not stuffed into refrigerators. It gave me lesbians and bisexual women, and people who owned their often messed-up sexuality. And it gave them to me in the framework of a world I already knew and loved and was aching to interface with as a coherent equal, not as someone treated as a "fringe viewer" by the main narrative.
Yeah, there's a lot of porn. But don't we all deserve a little porn every once in a while?
Fanfic is a huge, collaborative, interactive way for people to be a part of the stories that they love, and I worry that Amazon Worlds is a big step, not toward monetizing fanfic, but toward mainstreaming it in a way that will sap many of the qualities that make it so important. The minute I can say "sorry, this fanfic over here is licensed, and yours is not, so cut it the fuck out," there is a problem. People need to be unafraid to write their stories, the way they want to write them, and learn in the process.
So yeah. I am leery and concerned.
(*This is my understanding based on a reading of the program rules, and based on discussion by other people. I could be wrong. If I am, I'll update.)
(**This is not true of everyone. Some people just hate fanfic. I've never understood that, so I can't really speak to it, but it's a real and pervasive point of view, so I don't want to sound like I'm speaking for those folks.)
(***Technically those C&Ds would be legal even now. I've seen them served. But without something like Amazon Worlds to be held up as proof that fanfic writers are somehow "stealing income" from either the IP holder(s) or the publishing program, they seem to be short-term things that everyone quietly forgets about.)