I remember reading a little while back in some martial arts (MA) business blog that the market reach of a typical martial arts school is only about 1-3% of the population. Even though the popularity of MMA is increasing exponentially, the actual practice of MMA is still within this 1-3%. Now a lot of TMA (traditional MA) schools are actually jumping on this MMA bandwagon and junking the traditional stuff, so I'm not surprised about the decline in TMA schools. Lets face it, MMA is really about becoming a better fighter and all those TMA values are not something MMA fighters are concerned about. Check this article: http://bleacherreport.com/articles/90547...ial-arts-values
There is still a market for TMA schools especially for the kids of those parents who don't like violence and those who also believe that TMA values teaches you more about becoming a better person in society, a scholar warrior. For me, I practice and teach both empty hands and weapons in a traditional school setting and have no desire to become just a better empty hand fighter.