I don't make a living doing live bands, in fact I only started doing it a few years ago because I knew people in bands who asked me along ( I got back into photography to do street and as a hobby ). So apart from people I know who are in the bands I had to find other ways to shoot live shows. Pretty much the same as the OP. Then I got asked to shoot and write for some online blogs/sites and now I have a lot of contacts with venues/promoters/bands etc.
While this initially means shooting for free, it can then lead to paid work if people like your stuff, and how do you know if you are any good, or even get good unless you get to shoot shows in the first place?
I've almost reached the stage where I might go part time in my day job and start using my contacts and experience to start doing paid work ( for instance some bands I've shot live are interested in paying me for promo shots/ CD cover shots etc now ) That wouldn't have been the case without me doing the "free"stuff to start with. A friend who has started a media/video company is also looking to give me some work, and I'm starting to see some interest in paid writing work too.
My approach might not be the right way to do it, but so far it seems to be working out for me.