If I could try and build on this without butchering it and keeping the main idea relatively intact, I think the reason why a lot of why fanfiction is looked "down upon" is in part because of human nature. By that, I mean the average man's attention span. I'm talking about the hook: the thing that keeps the audience—whether it's art, animation, music, or writing—dragged into the piece. With music, the hook is instantaneous with a catchy beat or some form of lyric. Hell, with drawings and such the whole thing itself is a hook.
But with writing, I think, the author does not generally have any easy time creating a hook right of the get-go. A proper hook has to be developed, thought out, or pique the reader's interest, and so on and so forth. And that's another thing: interest. Not every story is going to get people's interest. I did not like Night's Favoured Child
because the prologue failed to appeal to me. I liked Reading Rainbow
because the idea of Rainbow Dash reading to Twilight sounded adorable. I liked The End of Ponies
because right of the bat it thrusts the reader right into the action. I liked Beyond The Wall
because the very first two sentences made me curious. I have not and likely won't read Past Sins
because I do not find the story's plot interesting. I gave Fallout: Equestria
a read despite hating the Fallout series in general because I love dark stories (although I gave up a third of the way through because it got tedious and boring).
The hook is, in my opinion, the most important thing in any medium of entertainment. Look around: it's in advertisements, on the front page of CNN, in commercials, on billboards and literally everything. And it's all there in a flash and more often than not there for just as long. It's just, that for writing in general, a lot of people tend to not have the right attention span because a story is not delivered down the barrel of a gun and thrust into your eye. That, I think, it why writing—fanfiction especially—is looked "down upon." I'm sure there's a story out there that would trump a story like Background Pony
any day, but because either the hook failed as a hook or it's a premise no one has interest in, no one will ever see it. Instead, other stories—the ones seen as "bad" by those who know what they're saying and aren't putting that label on just because of opinion—are viewed positively because they either interest the reader, go straight into the action, or are just plain simple however flawed (grammatically, structurally, et cetera) they may be. And, for some reason, people tend to look beyond the flaws and while I'm not saying they shouldn't, I'm saying they shouldn't disregard them.
A lot more of it, of course, has to do with the author, grammar, format, and all that technical stuff everyone should know. But then again, somehow shit like "Chrysalis with a penis rapes Twilight over waffles" makes the front page of fimfiction on a regular basis, so how the hell should I know what grabs a person's attention?
Good writing is complex. "Bad" writing is simple. The average person is simple. The two don't fit well on a regular basis. Deal with and make the best of it.
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