Can Authors Monetize Free Use Adaptations Of Novels?

It's a case by case thing, and really depends on the legal status of the original work. Works in the public domain can generally be adapted for commercial purposes by anyone. Works that are freely available under certain licenses (such as Creative Commons BY licenses) can also be adapted for commercial purposes by anyone. But works available under licenses such as NC can not be adapted for commercial purposes.

Monetizing would include selling annotated copies of the novel, illustrated editions of the novel, making an audiobook of the novel, making a film or video game of the novel, selling novel-related merchandise, etc. Even a free e-book could be monetized by crowdfounding a polished-up version of the work. If the work is not in the public domain, then the safest route would be to get a written license that spells out exactly what commercial uses of the work are allowed, and I’d try to find those lines in any license before putting too much time and money into adapting the work. It’s a work that I’d like to make into a really deluxe collector’s edition some day, assuming all the rights are clean.

I’m a huge fan of fan projects and such but I try to keep it practical. I wouldn’t want to make money off of most novels unless they are public domain or I have the rights. I’ve watched many small creators get tons of traffic on their free fanarts and then get hit with a copyright strike when they put up a link to buy prints of their work on their site or add sponsor links. If I were to try to sell something in another author’s very rich and already established world, I’d look to get a license first to read the fine print, or I’d try to reimagine it into an entirely original story and then sell that.

So two rules to go by: 1) public domain is okay, 2) work with an explicit license and carefully read the commercial permission. Otherwise: ask for permission to use, or don’t monetize. Also note that there is some protection afforded to parodies and transformative works, but this is a somewhat iffy way to earn a living from your fandom. My preference is to channel my fandom to either original works or to work legally with other people who create in that same space (often in writing, but not always). It’s safer and more freeing.

So a simple rule that I can tell other writers is that in order to decide whether or not you can make money adapting a free work, you have to look at what you mean by free use of a work written by another. To summarize briefly, works that are in the public domain or that their author has put into the public domain by dedicating them there under a license such as CC0 or a public domain dedication can be adapted for profit by anyone, including and often preferentially the author himself who wishes to produce a fundamentally different new adaptation (as opposed to 'better' copies of the same work).

The permissive licenses such as CC BY or CC BY-SA allow for the commercial use of adaptions. This means, that as long as the adapter gives proper credit and sticks to the other rules of the license (e.g. share alike for CC BY-SA) he can do with the work whatever he wants to. Other licenses like CC BY-NC prohibit the commercial use by third parties, whereas others like the aforementioned BY-NC-SA may allow for the commercial use, but impose certain restrictions upon the adapter. For example, if I had released my novella under the terms of the CC BY-NC license, a paid audio adaptation would be prohibited. However, if I had released it under the CC BY-NC-SA license, an adapter could release a paid audio adaptation, but it would have to release the work under the same terms of the license as well, thereby possibly precluding him from entering into a exclusive contract to adapt and sell the work as a film, for example. In short: always read the fine print. The author’s public statement as to the licensing of his work is also not sufficient. You must read the license itself.

Additionally, fair use and the world of transformative works need to be taken into account. Since long time ago it has been defined that parody, criticism and highly transformative works of fiction can even be commercial, however most adaptations would fall under straight copies and thus relying on fair use for making money on them is highly speculative and can be very costly in court. To make things simpler, if you are a writer and you also want your work to be freely adapted then you need to decide which commercial rights you want to reserve for yourself. Thus you can for example permit noncommercial fanarts but not allow any commercial film or audiobook adaptations of your work. If you are a writer and someone wants to adapt your work into some form of medium then you should demand a written license that clearly states all the ways in which the adapter is allowed to monetize his work (e.g. audiobooks, ebooks, stage plays, etc.). Last but not least, remember that even when the text itself is free to use, trademarked characters and series titles can still be used to forbidden purposes. I personally find community adaptations of wonderful value, but written licenses save a lot of heartache in the long run.

I would explain this to a friend sitting at a café over coffee by stating the obvious: until you have permission from the copyright holder for a novel you cannot safely sell adaptations of said work. While many fans create tons of derivative work for free and the sites that host said work turn a blind eye, the moment that work starts to earn money the copyright owner will find a way to shut it down. However, I have seen in the past that fans can negotiate licensed partnerships with copyright holders to create official work, while some rights holders may also be okay with paid merchandise or even sponsored content.

This brings me to the practical stuff. I generally research to see if the original work is in the public domain. I look for works that have been published under Creative Commons licenses or that have been explicitly licensed for other uses. If I need to get a license to use a work, I ask for a clear license agreement that outlines the terms and conditions of the license. If a particular work is impossible to license, I create new characters that explore similar themes, or I adapt a public-domain work like the stories about Sherlock Holmes (much of the original canon is in the public domain).