I live in Cary, North Carolina... a small town that somehow MORPHED itself into the 7th largest CITY in the state. Our "local" Newspaper was the Cary News... for YEARS we received our Weds and Saturday edition - this is where you really looked for the neighborhood kids playing sports, or engagements, or weddings. It's where we had updates about the Rotary Clubs, and Lazy Daze pictures with features on Cary residents who did something interesting. I LOVED it!
Then it was sold to the News and Observer in Raleigh... Then it was incorporated, and delivered as PART of the News and Observer paper. As the News and Observer shrank - so did the paper, until it was no longer located in DownTown Cary - with a staff, and photographer who ate hotdogs at the counter at Ashworths. It stopped being a "hometown" paper - in fact, I don't even look at it much anymore.
The Real Estate Section of the Cary News is pretty much gone - ditto the News and Observer. We are Tweeting our Listings, and there was a recent post about the fact that FACEBOOK will quickly make SEO a "dinosaur" term.
A friend of mine is starting the Cary Citizen. An online Hyper Local News source that organically pushes the picutres, and information I use to love about the Cary News. I can get it on my phone, on my time, in bite sized pieces I'm interested in.
I don't think we're going to stop reading the USA Today, and the Wall Street Journal is probably safe - but do we really NEED a local Newspaper? Would one that covers the State work?