A lot of pubs are struggling. The stricter drink driving enforcement, cigarette ban and tax have led to a decline. Like the way that a lot of WMCs have gone out of business a lot of pubs have closed too. The ones that survive are the ones offering something extra, like food, entertainment, etc. However most pubs that have bands on have punters of a certain age - those that went to see bands in their youth. The music pubs that attract a younger audience are very much in the minority.
I've been playing in pubs for 30 odd years. Things are not as good as they used to be, but then it did get a lot worse in between. It's not dead yet, but I'm not sure for how much longer with an aging bunch of lovers of live music (and I'm not counting mega-corporate festivals)