(Before you continue reading, please note I'm not promoting any beliefs portrayed by the propaganda films, I'm simply using them as examples of film used in propaganda campaigns)
For example, D.W Griffith's The Birth of a Nation (1915) is a propaganda film for the pro-Confederate States of America. In the movie, the Ku Klux Klan is portrayed as the "White Knights of America", who save the weakened southern states from the oppressing northern states and the "unintelligent and crazed" freed slaves. Although the film has a controversial plot, The Birth of a Nation is considered to be one of the greatest films of all time because of it's innovative film techniques.
Another example is Sergei Eisenstein's Battleship Potemkin (1925). This film shows a dramatized reenactment of mutiny that occurred in 1905 aboard the Battleship Potemkin against the officers of the Tsarist regime. This film has been called the most influential propaganda film of all time and was called the greatest film of all time at the Brussels World Fair in 1958. See for yourself in the link below.
In 1936 Louis Gasnier directed a film called Reefer Madness. This film, which was produced by a church group called Tell your Children, uses fictional melodramatic situations to influence audiences that the herb marijuana can cause all sorts of havoc. The film admits that the events in the movie are fictionalized however, it says that the movie is "based upon actual research into the results of Marihuanna addiction." Watch the whole film below.
Still to this day, film is used for methods of propaganda. The ISIS (Islamic State in Iraq and Syria) uses film to spread their point of view to the world to recruit soldiers to their cause. The Al Hayat Media Center, which has been called the ISIS propaganda headquarters, has produced a music video using footage of ISIS soldiers in action to influence people of the Islam nation to help defend their holy land from outside invaders. The title of the song is called "Soldiers of Truth go Forth"
Like I said before, film has a power to influence people like no other form of media. Getting people to watch and pay attention to films is all it needs to get it's point across to an audience.