Tickets are usually distributed through workplaces and universities, often through the ruling Workers' Party, but many end up being resold by scalpers.
"Going to the film festival is very popular. Kids of high party officials get tickets that they resell to others at the university," said Zhu Sung-ha, a 34-year-old graduate of Pyongyang's Kim Il Sung University, who defected to South Korea in 2001. He said North Korean students view the festival as not only a chance to see foreign films, but to glimpse the outside world.
"They want to see the reality of developed countries," Zhu said. "The North Korean government doesn't really want people to see it, so they show a lot of films from Third World countries like Iran and Egypt."
One of the underlying myths of this country is that people are lucky to be born North Korean. ("We have nothing to envy in this world," goes a popular slogan.) So the government doesn't want the people salivating over the cars, cellphones or kitchen appliances that show up in movies. Festival organizers get around that by favoring historical dramas that won't invite North Koreans to compare their lifestyles with those of the people depicted in the films.
As Culture Minister Kang Nung Su said at the opening ceremony, film must not "harm the sound mind of the people."
Still, participating countries have tried over the years to send films that would raise the public consciousness. There have been films about German reunification (a sore subject for a regime that fears being swallowed up by wealthier South Korea) and a film about Auschwitz, also touchy given the analogies to North Korea's labor camps for political undesirables.
This year, the festival screened the Austrian-German production "The Counterfeiters," a curious choice given the evidence that North Korea is a major counterfeiter of U.S. currency.
"We try to see how far we can go," said the Goethe Institute's Schmelter. "We are surprised and grateful. We have never gotten a 'no' for a German film."
This year, the festival had only one new North Korean movie, "The Kites Flying in the Sky," about a woman who cares for orphans. It was not well-received, with foreign viewers dismissing it as syrupy and propagandistic. Two years ago, the North Korean film "A Schoolgirl's Diary" was a surprising success at the festival and went on to Cannes.
North Korea's film industry was once surprisingly robust, nurtured by the personal interest of Kim Jong Il. In the 1970s and '80s, while being groomed to succeed his father, Kim oversaw the country's film studios and arranged the kidnapping of a South Korean actress and her director husband to help him make movies. He also wrote a book, "On the Art of Cinema," on how movies can be used to instill correct thinking.
Pyongyang has at least a dozen cinemas, and six were used for the festival. Even small towns have their own movie theater, although nowadays much of what's shown is reruns of old North Korean films.
A popular attraction for both foreigners and North Koreans are the film studios on the outskirts of Pyongyang. Visitors wandered through mock-ups of 1950s South Korean and Japanese streets, or at least a communist propagandist's vision of them: girlie bars, cheap cabarets, a blood bank where the poor could sell their blood to the capitalist oppressors, and a pet food company. (North Koreans used to think keeping pets was a Western indulgence.)
North Korean visitors seemed more interested in a fortress where they could try on costumes of ancient Korean warriors and get their photographs taken. It didn't appear that any filmmaking was taking place, although a tour guide insisted that the studios are still used.
The guide, Choi Heon Yul, boasted that Kim had visited 500 times to offer his personal guidance, and once climbed a tower with a camera to make sure a scene was correctly filmed.
But Kim hasn't been to the studios in more than two years -- whether because of ill health, as many reports claim, or lack of interest is unclear.
"Kim Jong Il is very busy, leading the party and the revolution," Choi said. He said 10 to 12 movies were filmed at the studios each year, but other North Korean officials say the number is much lower and that lack of funding has crippled the country's film industry.
Another problem they are reluctant to discuss: Despite the ban on foreign films, cheap, pirated DVDs from China are smuggled across the border and screened illegally in the privacy of people's homes.
Among the most popular, say North Korean defectors, is "Titanic," in part because of a mystical belief that the ship's sinking was related to the birth the same day, April 15, 1912, of Kim Il Sung. Other favorites are South Korean soap operas, Chinese kung fu movies -- and pornography from any nation.