In my experience, people go to shows with local bands because they're either an opening act for a bigger more well-known band (as ssaew333 mentioned), or because they've already seen them before at a festival, or because of recommendations from their friends. Word of mouth is huge when it comes to smaller bands.

What streaming does is that it makes it so much easier to check out a band when a friend says "hey, give this band a listen, they're pretty good!". The initial recommendation comes from a friend, usually not the streaming service.