Well, now we don't.

when you accept that the LOTR movies are just fanfics we've spent millions on, you'll understand why we need more fanfics.

Yes. Fanfiction is an artificial term imposed on us by our current IP regime. It is not a natural kind and simply refers to normal literary practices that run afoul of current laws. Why isn't Shakespeare's _Othello_ fanfiction of Cinthio's short story? Because there was no copyright to run afoul of, and so it was 'only' a retelling or adaptation.