What makes you think there will be any live music any more? Touring is designed to promote the sale of music. If there is no music company to make profits on the music, then there is no music company to back the tour.

The idea now is that tours are to promote CD sales. Given the current trends, this could reverse. CDs/MP3s can serve as promotion for tours, and the ticket sales/merchandise will be the primary goal of the tour. Prince took this approach in England and it seemed to work for him. His CD was given away with a newspaper, and his shows sold out.

Financing tours will still be an issue. Perhaps music labels will shift from focusing on CDs and instead act as banks to finance tours. They put up money upfront, and recoup it from tickets and merchandise.

Smaller bands may take out loans to pay for tours. If the tour does well, they earn enough to repay the loan (and interest) and make a profit. It will suck for bands that don't make much money, but it already does.