The South Korean DVD that the North loves to watch

A South Korean soldier on night patrol finds himself on the wrong side of the border with the country's belligerent northern neighbour – and standing on a landmine. He is rescued by two North Korean troops who disarm the mine and free him to the south. His image of his once-hated enemy transformed, he begins a clandestine friendship with his rescuers that ends in a double murder, and the two sides almost go to war.

Such is the plot of Joint Security Area, until recently the biggest box-office hit in South Korean history. Rumour has it that Kim Jong-il is a fan, since the South's then President Roh Moo-Hyun handed him a DVD copy at the landmark 2002 Korean summit. But while the North's ailing leader can indulge his famous whim of foreign films, his citizens are banned from consuming anything but the state's thin cultural gruel – at least legally.

Now comes a new report that claims that the blockbuster is one of the hottest tickets on the North Korean black-market – and it is not alone. So popular is the stream of smuggled soap operas, movies and pop music from the South that Pyongyang has dispatched teams of thought-control agents, known as "109 squads", to confiscate tapes and arrest smugglers, according to a paper by the South Korean think-tank the Korea Institute for National Unification. "Even in Pyongyang, many people [are] known to watch South Korean movies and videos," says the report.

High officials in the reclusive Stalinist state, including senior bureaucrats and security agents, are risking imprisonment, hard labour or worse to indulge their love of the so-called "Korean wave", claims the report's co-author Lee Keum-soon.

Public executions, though declining, have been imposed for "such crimes as the circulation ... of foreign video tapes" as a deterrent to would-be smugglers.

North Korea has long outlawed anything but state TV, radio and propaganda movies, according to numerous defectors – although many apparently find ways around the ban. One of the most famous defectors, the former US soldier Charles Jenkins who spent four decades behind the bamboo curtain, describes how he hid James Bond videos in his wardrobe and took a screwdriver to his dilapidated radio so it would tune to South Korean stations.

"I listened to and recorded Elvis, Beethoven, all kinds of music. I was listening to NHK, Voice of America; American music."

Repression seems to come in waves: Mr Jenkins claims the authorities often turned a blind eye to his stash of contraband from the South – which is still technically at war with Pyongyang. But with once warming relations between Pyongyang and Seoul turning sour since the election of the South's conservative leader President Lee Myung-bak, the state has again bared its teeth. The report says the North's citizens are smuggling in cheap Chinese video-recorders and swapping well-worn tapes of Joint Security Area and other movies. Public screenings are popular in some areas and illegal recorders and tapes are openly on sale, provoking the clampdown around border areas.

Despite the availability of foreign pop culture and the worldwide growth of the internet, however, the report concludes that North Koreans still live in probably the most closed society on the planet, saying: "No noticeable change has taken place in the area of freedom of speech, press, assembly, and association, as well as protection of privacy and private life."