What is it about that word which makes so many of us cringe? Why has a genre, which is as much for expressing ones fandom for a show as an AMV, been associated in our minds with smelly guys writing about their horrid love affairs with their favorite anime characters, and with crazy fangirls with similar tales of debauchery? Granted, there are some diamonds in the rough, as there are with every type of art. And then you have fanfictions like "John Freeman" which are funny in the "Haha-point-and-laugh-it's-so-awful) sort of way.
Is there a problem inherent with the genre? Or does the problem lie in that only the most fanatical (and thus, estranged) of the fanbase would take the time to write in this genre?
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As for the issue at hand, it's a relatively simple one. First of all, there's Sturgeon's Law (90% of everything is crap). Generally, this is after it has been somehow filtered, however. In the case of fanfiction, there is essentially no barrier to entry - not even audio/video knowledge is required. Consequently, fanfiction exhibits a far greater proportion of crap.
I think the problem with fanfiction as it is popularly depicted is the fact that, like much amateur fiction, it is for the most part painfully poorly written and often erotic in a bleh kind of way. Most people, when they read or watch a work of fiction see beyond what is shown to them directly and make up their own inner life for the character based on the scraps and pieces (often wonderfully rendered but incomplete none-the-less) that the creator gives to them. My Hamlet is, in personality and appearance, slightly different than your Hamlet. Not only that, what if I want to imagine what Rosencrantz and Guildenstern are up to while all the craziness is going on? The author of a certain theater of the absurd play wrote a fanfic about his imaginings, and we read it in English class. The problem is, not everyone's fantasies about their favorite characters, not everyone's variations on a theme, are high art. Just because you wish that Sasuke and Naruto would get it on, and like to think about it does not mean I want to read about it. Some of these things are better kept in one's mind.
edit: Really, it comes down to the question that all fiction asks: "What if..." only it uses pre-existing characters or settings. Many of the less talented writers of "fanfiction" use this as a crutch, using the audience's supposed familiarity with the source material to avoid going through the effort of creating deep characterization and a plot. Personally, if I liked a character in, say, Gundam Wing, I would rather distill the traits I favored in their persona (for example, Duo's gallows humor and optimism in the face of death), and then work those traits into an original, and hopefully appropriate and more complex, character in my own work. That said, everyone imagines what happens between the gaps of their favorite stories. Fan fiction is just an extension of that. Even if you don't read it (I tend to avoid it, because, as was said...lotsa crap?) you write it mentally, every time you read. If you don't, I think you're not a very imaginative person.
And I know that most of it is probably really bad, but I read it anyways. I enjoy using it as a look into another fan's mind. Even if one would argue that their plots are stupid or clichéd, I have found many with good enough writing skills that I overlook this. Whereas many may not be interested in numerous alternate or "crack" pairings, I find it to be occasionally interesting. I mean, what would happen if those two got together? It can be an intriguing question.
But I digress. The reason most fans dislike fanfiction, I think, is quite divided. For some, it is a clinging to source material. They are unwilling to accept alterations in plot or characters at all. Similarly, several hate Mary-Sues. I myself tend to dislike fanfics with OC's. I usually read ones that simply create a new situation or alter one between the pre-existing characters.
In the end, it really all comes down to opinion. I like some of the things about fanfics that others don't. It's not a matter of whether what many of them do is good or bad, it's a matter of whether that interests you or not. Similar to many topics that have been discussed here, it is not always universal that they are considered bad. Sometimes, we can all make claims about how terrible something is, only to realize that what we were just calling terrible is something someone actually likes about the topic. In the end, it all comes down to a simple question: Do what most fanfiction authors do interest you? If not, then you are just not a "fanfiction" kind of person. If yes, then you can find interest in reading, and perhaps writing, fanfiction of your own.
As far as using Out of Character scenes, sometimes it works to great effect. It lets the author be more creative, for example a comedic doujin that takes characters from a SciFi setting and puts them in, say, Newark. They use the same character traits, but a radically different setting, or perhaps they create a character with the same name and back-story and situation but a different personality. There's a point, however, at which a writer must ask themselves once they go out of character "why am I using this specific person?" If they are so out of character they may as well be a new creation and there is nothing to tie their existence to the original source material, there's really no point to it being a fan fiction, is there?
OC examples:
Good Fanfiction: Wicked
Bad Fanfiction: Sailor Moon Saves the Furries.
So as a "writing exercise," I have started writing a fanfiction. It is actually a strict re-telling of a side plot from a certain video game (don't want to say anymore about it, kinda embarrassing lol...) Anyway I am using the existing characters and plot, etc. and just putting it in novel format. Its been really fun so far! No sexy stuff... just sticking to the main story. I think its helped me a lot with my writing, I'm starting to get the hang of it again. So basically I am not writing this to show crazy fans that I am another crazy fan... I am just doing this for me. I will probably only let a couple people read it anyway.
Actually, back in the day fanfiction is what inspired me to write in the first place. I saw these terribly written stories (and a few good ones) and thought "I could do this way better but with my own material..." So I wrote some original stuff. (As well as a very embarrassing HP fanfic that I hope no one ever sees...)
I begrudge no-one the writing of fan-fiction. I have written fanfics on material that ranges from Peter Pan (When I was in first grade) to Gundam Wing. I just never showed it to anyone. It's still sitting there in a notebook.
1) The work you are fan-fictioning is in the public domain. That's how you get away with riffing on the Odyssey.
2) You get a license from the copyright holder. This can be Creative Commons, or you can pay money, or whatever. Just talk to them and work out an agreement where they won't sue you. It may involve paying them money.
3) Your fan-fiction would have to be fair use meaning that it is a parody or some such. If you try the fair use route, and you get noticed, you will probably have to win in court to succeed.
But what you said is totally true. OOC are some of the best parts about fanfics, because they show you something new that you haven't expected before. But what you said about it being too far from the original character that it might as well just be a fan character...That doesn't happen that often. When I read OOC stuff, it's usually on things that weren't elaborated on in the story. Either that, or they take the personality of a character and just aim it in a different direction.
a) To rewrite an unsatisfactory ending of a story.
b) To create different relationships or introduce a sexual element in a relationship that wasn't in the source material.
c) To take the characters and put them in an entirely new set of circumstances.
d) To retell the story from a different character's point of view.
I have little need or use for "a" and "b" as I can supply my own imagination. In regard to "c", I don't understand why the writer doesn't just make it into an original work using similar character archetypes. However, "d" does sometimes appeal to me if it provides a new take on issues and events of the work.
It is great that these works are inspiring others to be creative and I am glad that people enjoy them; I just don't get into them usually. My one exception is Jane Austen fan-fiction. I must confess that I own the Pamela Aidan series that re-tells Pride and Prejudice from Darcy's point of view. The first and last books were interesting, the second book was terrible.
Anyway, my opinion on it is similar to the "Shit guys this is crap!" camp. But looking into my old account I did favorite some really well made ones back then. I still have a low opinion for the use of say FF7 characters in a different setting like say 1980's california. Why not make an original work?
I also see fanfiction as a way to cut your teeth. More like a springboard to writing and learning skills. Steven Moffat did Doctor Who fanfiction for Decalog for example.
I'm thinking of taking a few good parts from fanfiction I wrote and making an original story. Got damn! I mean...GOT DAMN NO!
Personally, the thing I like to do is that I like to take certain lines out of the game and weave entire stories out of those little threads because I find that Mother by itself tells an okay story, but there is a great incentive to expand it in many different ways due to how disconnected and how dark the story. It goes without saying, if you know the series' story very well, my stories will make much more sense to anyone who reads it (as is the case with virtually all fanfiction).
I never read fanfics, nor do I like harry Potter, but that sentence made me realize how much I want to read a realistic Hugo-esque Harry Potter, about a school filled with young catholics trying to comprehend magic, repressed homosexuals, and a bunch of scared to death kids capable of shotting fire balls.
Maybe fanfics can serve as a sort of springboard into original fiction writing. You start off writing about characters you're familiar with, but then you slowly work your way into writing about original characters. That's how it worked for me. *shrug* Kinda reminds me of a fanfic my sister wrote...
For me at least, fanfiction is a way to fill a gap left by a bad ending or poorly handled series, or to give me more of a good series that has finished. For example; I am really big into Harry Potter fanfiction because I think that the last two books of the series were shit, and because I wanted to read more about the titular character.
The problem with fanfiction isn't so much the crap, which is to be expected, but the stuff that can no longer be considered fanfiction. For example; this is a fairly good work of Harry Potter fanfiction, because it uses the setting, characters, and plot of the original work in an interesting way while still remaining, relatively, faithful to it. This, on the other hand, simply takes the magic system created by JK Rowling and some of the magical beasts "created" by her, and then puts them into such a drastically altered universe that is no longer recognizable to readers of the original series. This could be considered a work of fiction if the author had created original names and proper nouns instead of taking them from the Harry Potter series, and why he didn't is beyond me.