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How would fanfic/other derivative works cut into sales of the source material? I don't know much about the world, but I would blindly wager that 99% of people who consume content like this have already consumed 100% of the source material, and are just itching for more.

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A movie/tv show adaption of a book would be considered a derivative work. I could see that cutting into the sales of the source material, especially if it's bad.

Pokemon games are a great example of people buying it for the (copyrighted) characters, while the (not-copyrightable) gameplay constantly gets criticized. A game that copies the monster designs while improving on the gameplay would cut into sales. Other games inspired by Pokemon never have as good monster designs.

It's not just that it cuts into sales of the original, it's that the author should maintain control of their work. If I write a book, a movie adaptation doesn't cut into the sales of the original. If anything, it'd probably increase them. But it's my story so I should be able to control who gets to make the movie adaptation. Otherwise I can write a book and anyone can immediately turn around and make it into a movie, owing me nothing. Heck, a third person could come and make a sequel to the movie, paying nothing to me or the first filmmaker. I think the only exception to this is the statutory licensing for music rights. Not the sound recordings, mind you. But that composition rights. Anyone can cover Taylor Swift (like Ryan Adams) so long as they pay her the compulsory license fee.

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