I personally don't see the harm of fanfiction as long as the writer is not profiting from it. I wrote some based on Star Trek when I was a very young teenager, none of it very good but it was an excellent writing exercise.
My first experience with the internet was reading fanfiction and participating in 'fan' groups on sites like LiveJournal. Most of the material I read for several years was fanfiction and there are some brilliant ones out there.
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