Hmm... on the one hand, if used like the Strange New Worlds contest, I think this could be a great way to find potential authors for a franchise's tie-in literature (and something I would wholeheartedly participate in). But as it's implemented now, it's just a way to exploit fans' passion towards IPs they love. If you're gonna sell the stuff, at least compensate the author as an incentive for them to make more, because the only incentive for anyone to do this is to hope their fic sells well and gets them some notoriety that they can leverage into an actual career.