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For the moment yes, but not entirely. The bar scene may be dead in a lot of places, but live music in church is every bit as alive as it ever was.
Yesterday, I taped (OK, recorded, there was no tape involved) my part for Easter services. The tech guys at one of the churches I play at are assembling everyones' iPhone recordings of their parts (video and audio) into a worship set. Isolated bass guitar tracks never sound good on their own - the toughest part was listing to my recording, saying "yeah, that'll do - once it's in context", and hitting send.
There won't be any big gatherings of people until there is a vaccine for this Coronavirus...
Give it at least a year....
I suspect that nothing will change with the bar scene when things get "back to normal".
The same drunks will want to hear the same overplayed, rubbed into the dirt 50 times over, CRAP set lists that they've heard every weekend for most of their lives....
"Allright..."Sweet Caroline", ...make some noise!!
This has been happening for some time. Lots of cool collaboration projects online. Lots use Patreon to make their monies.Will bands start youtube channels? and can they make money that way?
Nice oxymoron!Is live music dead or just damaged in the short run
and if you make a CD it will be bootlegged and downloaded so we won't make much money selling recordings.
So what is the future of live music?
I have a professional job so for me music is a hobby and I find it entertaining to play good music with good musicians.

My observations in the Denver scene:
Cover bands can work consistently, but the standards are very high. Tier 1 clubs want you to have a light show, solid stage presentation and a constantly changing set of songs. Maybe there are 15 or 20 Tier 1 clubs.
There are dozens of non-Tier 1 clubs where cover bands who don't make the Tier 1 cut can play. Pay is $50/person or less.
In general, cover bands have to be human jukeboxes. Note for note covers, songs everyone knows.
Weddings and corporate events are there, though to stay busy you must integrate with the event planning network here, and few groups have the chops to do that well.
Original bands are playing to their wives, girlfriends, and the bar staff 75% of the time and for no money or a loss once you figure cost. Occasionally an original band breaks out of this town, but somehow it's a band who was not necessarily hot here before they broke (e.g. Nathaniel Rateliff, The Fray, One Republic - nobody knew about any of these guys before they were already national). There used to be a few really good local originals acts who worked a lot and had a good following. Opie Gone Bad comes to mind. Not sure anyone has replaced those bands in the current scene.
My band plays/played 2 local venues for little money each month. We had 4 private gigs (weddings) scheduled...we'll see if they materialize. Anyway, live music is dead for now. It may evolve into something else after the pandemic.
Many older musicians (including myself) will probably just play or host house parties where there's no pay...but plenty of food, BYOB, and friends to jam for and with. I did that 20 years ago and had more fun doing that than anything since.
Interesting discussion..
A few days ago I watched a local, all original goth rock band from where I live play a live streaming show on Facebook. There were about 265 people watching when I logged on. Although they are a long standing band with a good reputation I don't think they could draw 265 people to a club on a given night. Granted everyone is stuck inside due to the virus so that certainly added to the numbers but This got me thinking that maybe live streaming or some variation of that might be part of the future of music.
There have been quite a few live streams of local musicians on my Facebook feed. One band actually got together to hold a fundraiser for a local club. It was a really nice gesture, not without some risk because they were all together in one room (properly distanced, of course) but there were two major problems.
The first problem was sound quality. It was just bad. I wanted to be supportive because I love this club and the owner so I went out to my studio where I could listen on big speakers and it still sounded awful. It was apparently streamed using an old camera phone of some sort, but the built in microphone used wasn't really up to the task.
Second was that the band just wasn't all that good. Pitchy vocals all over the place. It was a nice effort and maybe in a busy bar you might get away with that, but with everyone watching intently, it's not a good look. And the stream didn't generate a lot of traffic. I ended up just making a donation and logging off, because it wasn't entertaining in any way.