It's not fan fiction, it's fan film

Fan fiction is interesting in that among the vast bulk of dreck is a shining nugget or two of quite good story.  As an example, Harry Potter and the Methods of Rationality is a delight.  It turns out that a group of people in the UK made a film set in J. R. R. Tolkien's Middle Earth, Born of Hope.  The story of how it got made is pretty interesting:

The idea for the film was born in 2003 when director/producer/actor Kate Madison wanted to submit a film for the Tolkien Fan Film Exhibition. Originally a modest plan, it grew until April 2006 when the first test shoot occurred. Principal photography started in June 2008, and continued through 2009. The goal was to debut at Ring*Con 2009, which it did. It was later streamed for free on various video websites including DailyMotion and YouTube.

Madison spent her life savings of £8,000 on the film. An extra £17,000 was generated by posting a trailer online, raising the budget to £25,000. Born of Hope was made over a period of six years, using a cast of 400, who would camp in tents so as to be able to shoot early.

The plot is based on a paragraph or two from the Lord Of The Ring's Appendices, which mentioned the adventures of Aragon's father.  The script expanded this into an hour long film, all made essentially by people volunteering their time.

It got quite good reviews, and won the "Best Micro-Budget Feature" award at the 2010 London Independent Film Festival.  I quite like the music, written and performed by nearly a dozen musicians, which is faithful to Howard Shore's LOTR scores.  The whole effort is a very impressive achievement.