The refrain 'the best things in life are free' might ring hollow in Hong Kong but surely there is a still a place for the simpler pleasures, like a night in with a video and perhaps a pizza. But even this cannot be taken for granted any more after Blockbuster, the world's largest video chain, decided to up stakes and leave Hong Kong. Twenty-four stores and 200 jobs will go over the next 18 months as leases expire. It does seem strange that this global leader, which can operate 8,000 stores successfully in 29 countries, can find no profitable prospects in Hong Kong. Blockbuster blames high rents - but if the landlord puts up your rent, the answer is to move, is it not? Unfortunately, that is not so simple in Hong Kong's tightly controlled property market, where hordes of customers reside in self-contained developer complexes such as South Horizons or those in Tseung Kwan O. Move next door and it is likely you will have the same landlord or his partner. Move too far away and the customers - who predominantly get around on foot or public transport - will not follow. So, in the absence of relocation opportunities, landlords control effective mini-monopolies with which to grant retail rights to their captive residents. This, of course, leads to a hard bargain, especially when some landlords might also have pay-television ambitions of their own. Blockbuster's other business issues pale in significance against such limited control of its biggest cost, rents. Blaming piracy for Blockbuster's exit from Hong Kong seems like a red herring. It is a problem it faces in all markets and one the company characterises as an ongoing operational issue. Hong Kong has also taken remedial action and was removed from the International Intellectual Property Alliance watch list in 1999. Taiwan, on the other hand, has not but Blockbuster still runs a chain of 120 sales outlets on the island. Or is Hong Kong's pay-TV offering so compelling the traditional economics of the video-rental market have been recast? Hardly. Competition has been slow to develop - getting access to buildings not retail sites is the problem - so we have the usual diet of take it or leave it movie channels, not state-of-the-art video-on-demand services, directly competing with video operators. Blockbuster's complaint over rent has been heard before by foreign retailers attempting to enter Hong Kong. The best example came in 2000, when French retailing giant Carrefour retreated from Hong Kong citing an inability to secure adequate retail space. While Carrefour has its regional office in Hong Kong, the vast majority of its investment and its jobs are in neighbouring nations. There is more to it than just a lack of choice in food retailing or video rental. Hong Kong's property regime is also to blame for harder-to-quantify lost investment and opportunities. Retailers such as Macro, Tesco do business in the region but not here. This competition brings with it not only choice but also jobs. In Hong Kong, however, the preservation of property prices seems to be the defining policy of the government. Everything else is subordinate. While a video chain's departure from town might just seem inconvenient to some, it means the property gatekeeper now controls even the simpler pleasures in life - such as a pizza and a movie for a quiet night in. Monitor - B16