Ask any musician during the pre-internet era and this would be their assessment:
Recorded music will always be the profit center. Live performances are only good for promoting a band's records; it's easier to sell 1,000,000 records than it is to sell tickets for 1,000,000 seats.
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megastars like Lyle Lovett have pointed out that he sold 4.6 million records and never made a dime from album sales. It's why the band 30 Seconds to Mars went platinum and sold 2 million records and never made a dime from album sales."
But the record companies made a killing on the recorded album sales. It's not because touring is better than recorded sales, it's because they were being dicked by the labels.
Absolutely. Listen to old concert recordings, and even established acts like the Eagles and Led Zeppelin shamelessly plug their newest albums during concerts. The big story arc of "Spinal Tap" involved the problems with releasing "Smell the Glove", the promotion of which was the whole point of the tour.
The technical changes seem to be making musicians into traveling minstrels once again--not a good thing. Studio recordings are better 99.99 percent of the time.
Live performances are meetings between people, human interaction. This is irreplacable by recordings. What value does the recording truly offer? Its value is diluted by being "easy" to replace by recordings of other artists (that might go for cheaper).
Recorded music will always be the profit center. Live performances are only good for promoting a band's records; it's easier to sell 1,000,000 records than it is to sell tickets for 1,000,000 seats.