It's desperate, but there just isn't the appetite for hyper local TV. Even local newspapers and radio are both struggling.
The fact STV couldn't make it work, when we're constantly told Scotland is a "special case" ("You can't launch Capital FM, Heart or Smooth Radio in Scotland!" Er, you can.) even with the might and resources of STV behind them, it speaks volumes.
Time to let go.
Scotland is still to some degree a special case. Radio Clyde (and other Bauer stations) remain dominant in the market and Heart really doesn't do as it should. However, Capital and Smooth have done perfectly well.
However, while Scotland may moan about shows being too London-centric at times and while there is definite merit in something like a Scottish Six, I'm to be convinced there's the appetite for an entire channel launched from scratch. 90% of the time Scotland is quite happy to watch the same programming as England.
The other problem for a commercial station is basic population size. Scotland as a totality has a smaller population than Yorkshire. That's quite a small amount of people to target when you're only going to get so many people moving along from the main two channels over to your local station, especially when all you have to offer (because obviously there isn't a Hollywood budget for any such station) is The One Show without a budget, a football show when Clyde has already cornered that market, news and reruns of Taggart.
I suspect it's a similar case in most places. No matter how strong their regional identity, parts of England are not going to flock to these local channels when they have nothing exclusive to show but local news, which if you live in a big city is covered by the BBC and ITV anyway.
Fair play to those who are making a go of it by expanding their venture to provide other services, but it was a stupid idea.