The major difficulty traditional local newspapers have faced over the past two decades is this downward cycle

IIRC, It's more like 4-5 decades, and while the cycle is approximately correct for the positive feedback loop now running, it didn't, as I recall, actually start with declining revenues, it started with a wave of newspaper mergers (and acquisition of newspapers by non-newspaper firms) and attempts to increase profits after those mergers by reducing costs, which got you to the step you label "20", and the cycle took off from there.