It is not true. Classical chess is now played with about the same frequency as before, or even less (but certainly not more). Previously, rapid chess or blitz was considered a marginal niche and no one took it seriously, but now times have changed and no one is interested in watching a game that lasts several hours. Plus, the development of the Internet allows players to play almost around the clock (if they have the strength) and this is in demand both by spectators and sponsors.
I do agree that Classical Chess is now played more in this day and age.
The problem with watching Classical Chess is the time that each players take a move. Since it takes around more than 3+ hours for the game to finish, it is relatively hard to captivate an audience in finishing a given match. This is the reason on why more rapid and blitz time formats are played regularly in these hosted and prestigious tournaments.
I strongly believe that Chess is in a good position now. Lots of streamers (e.g. Naroditsky, Nakamura, Botez sisters, Levi, etc.) are now hosting more and more videos that increase viewership in this sport.