People go to night clubs to have fun, drink, talk to people, dance etc. Some clubs have live shows which is great but a good club is about the atmosphere, and if they play great recorded music with a good dj people will have a great time.
I agree with odog. There are other reasons why the club must still be in business. It must have a good atmosphere, good drinks and a cool crowd. I find going to a club that has a live music all of the time annoying because it can be so loud and often times too crowded. Also the covers may be more. And sometimes, you just go out to hang out with people and catch the vibe. A club that has only recorded music could provide this. ;)