Actually, it's the reverse of that. They LOST subscribers BECAUSE of the lack of locality, not the other way around.
In my market, the Palm Springs, CA, metro, 20 years ago I would buy the local Desert Sun or subscribe always. I converted to digital only 5 years ago, and now I do not read it most days and am going to cancel at the end of my subscription. Like so many local papers, the quality of the paper has declined, the coverage of local items of interest has disappeared, the writing seems not to be copy-checked or edited and they go on wild, lengthy excursion into advocacy journalism that are politically motivated and boring (as well as poorly written).
One of the local TV stations does a far better job of covering local news and it much better at social media than the paper.
Smaller and medium market papers are going to be gone when the Boomers are no longer around.