Classic Rock isn't dead, it just goes to bed at a more reasonable hour.
Add me to the growing number of folks who appreciate this as THE relevant TB line of 2012.
For the purpose of this post, I define classic rock as being from 1965-1978 in origin, as per the original classic rock radio format, that emerged in the late 1980's. The output of the rest of the 80's may arguably now be included in that definition. Once grunge came along, it was clear that rock was recycling itself; it had run out of new things to say, musically. Grunge did open new avenues, lyrically, getting away from the typical sex/booze/drugs/cosmic stuff of the classic rock era.
As long as there are delusional groups of middle-aged guys out there who think that they can learn 3 dozen or so old warhorse classic rock songs of the above description, and go out and make money, there will be no shortage of classic rock bands. The trouble is, they are blind to what the audience out there in gig-land is.
My bands have a healthy respect for who and what are in front of us. My main band's core demographic is women over 30, so we play a lot of "cougar music," with heavy emphasis on the 80's, 90's, some country, and non-metallic 60's & 70's. We also sprinkle in some newer stuff, and have vocalists of both genders. We work a lot, mostly as an acoustic duo, or trio. Full band gigs are usually over by 1 am, with this group.
My live karaoke band knows the "rule of 8/23," as I term it. Think about this, for a moment. The folks likely to be in front of this band are 25-40 years old, for the most part. It's no secret that most of us seem to identify with the music that was popular in our final year of high school. In other words, take the 25-40 year-old folks back to 17, by playing songs between 8 and 23 years in age. It's not an absolute rule, but a healthy guideline, when it comes to picking new material. Gigs for this band usually do not end until closing time (2 am).
I get hired gun work for casino and high-end bar bands, and repertoire may vary from gig to gig, depending on a lot of factors. You can get away with skewing older, at casinos, and that is indeed where the money is, but you have to be good, and have more than the aforementioned 3 dozen songs. You also, typically, need to have an in, just to get booked. It is a tough circuit to break into, and even tougher to stay in, over the long haul.
Classic rock won't be going away. In a few more years, it will become THE stuff to play, at retirement communities, where 50's tribute and Beach Boys cover bands are already making a killing, in my local market, and are at home by 10-11pm. With an aging parent of my own in a senior community that offers 1-hour shows 7-8pm, I am confident that my main project's acoustic side can tailor about 50 minutes of music from our current repertoire to be able to exploit this, on a weeknight during the coming high season. We could even make it the first gig of a 2-gig night, since one of the wine bars that we play strives for a late-night "speakeasy" feel, and likes us to start at 10 pm.
Just as Sun Tzu once gave the best advice for warriors (know your enemy), I end with the best advice for coverband musicians: Know your market, and where you fit into it.