Music Social Net Kerchoonz Gets $490K

Social.fm just shut down and the competition is fierce, but the Scottish Co-investment Fund has made a $490,000 bet on new UK-based music social networking site Kerchoonz. Scheduled for September launch, the site will use free music to drive traffic and says that artists will be compensated. Kerchoonz will pay registered artists and songwriters every time music is downloaded or streamed.

NPD’s latest Digital Music Study found that the overall portion of music paid for fell from 48% in 2006 to 42% percent in 2007. At the same time, while the percentage of US web surfers engaged in file sharing capped at 19% last year, it continues to grow aggressively among teens while the number of files downloaded per user increased.

Sign up in this pre-beta stage at http://www.kerchoonz.com,