It doesnt quite imply democracy does not work. It implies that propaganda works. And if propaganda works, then that would mean that having the bulk of the ability to propagandize concentrated in a few hands in a threat to democracy, as it means that few people effectively have a much more powerful vote. Which, if you'll allow me to shortcut the rest of the argument, just brings us to the fundamental threat to democracy is concentrated wealth and concentrated power.

Poor logic. The existence of propaganda working does not require concentrated wealth. It simply has more interest in it currently.

For example many players in the civil rights movement were not wealthy and did “good” propaganda which others refuse to call it as such.

The prohibition movement was a second example.