From a new paper, "Preparing for the Possibility of a North Korean Collapse", Bennett 2013 (RAND):

...Since the end of the Korean War, the North Korean government has indoctrinated its population, only allowing them access to state-generated information. But information on the outside is spreading in North Korea, debunking at least some of the North Korean propaganda, and generating the potential for instability: “There is mounting evidence that Kim Jong Il is losing the propaganda war inside North Korea, with more than half the population now listening to foreign news, grass-roots cynicism undercutting state myths and discontent rising even among elites.”53 Analyzing the results of their survey of North Korean refugees in China and South Korea, Marcus Noland and Stephen Haggard have identified a number of significant shifts in information and resulting North Korean attitudes:

• The survey found that roughly half of North Koreans have access to foreign news or entertainment, a sharp rise from the 1990s, eroding faith in the regime’s statements that the United States is causing its woes.54
• “Not only is foreign media becoming more widely available, inhibitions on its consumption are declining as well,” the report said, referring to broadcasts from South Korea, China and the United States. “The availability of alternative sources of information undermines the heroic image of a workers’ paradise and threatens to unleash the information cascade that can be so destabilizing to authoritarian rule.”55
• A survey of refugees has found that “everyday forms of resistance” in the North are taking root as large swaths of the population believe that pervasive corruption, rising inequity and chronic food shortages are the fault of the government in Pyongyang—and not of the United States, South Korea or other foreign forces. . . .
• “Evaluations of the regime appear to be getting more negative over time,” the report said. “Although those who departed earlier were more willing to entertain the view that the country’s problems were due to foreigners, respondents who left later were more likely to hold the government accountable.” . . .
• The survey found that cynicism about the government—and willingness to crack jokes about its failures—was higher among refugees who come from elite backgrounds in the government or military. It also found that distaste for the government was strongest among those deeply involved in the markets.56

...With much more outside information penetrating into the North Korean society, a significant number of citizens likely believe at least parts of that information:

The regime has made desperate and increasingly futile efforts to maintain a stranglehold on information, such as periodic crackdowns by the authorities on mobile phones brought in from China and seizures of widely popular and avidly watched South Korean soap operas recorded on video and DVD.57

Even the North Korean military is not exempt:

An increasing number of North Korean military officers and soldiers are caught watching South Korean films or soap operas in barracks, sources say. A Beijing-based source who visits the North often said Monday, “Several Army officers and soldiers have been caught watching South Korean movies or TV dramas since last year, and the military has been providing extensive indoctrination for all officers and soldiers with a view to preventing the cultural infiltration of imperialism.”58

Corruption in the army has become so widespread that the government authorized the civilian police (the People’s Safety Agency) to investigate cases of corrupt military personnel. Previously, the military police handled such investigations, but the government believes the military police have become corrupted, and can no longer be trusted to find and punish soldiers involved in criminal acts (stealing, or aiding smugglers to get across the border). All this reflects poorly on the National Security Agency (secret police), who are also seen as corrupted.59

...Some early defectors in 1987 said, “[w]hen we lived in the North, we were told that South Korea was a living hell.”5 A defector in 2006 said, “When I came to the South and saw how rich it was, I was very angry at the Pyongyang regime.”6 The influx into the North of information about South Korea has weakened this propaganda line. While it is still repeated on occasion, now North Koreans are told that the South

has lost its true national identity, so its inhabitants are full of admiration toward the spiritual purity of their Northern brethren. The southerners, the propaganda claims, also badly want to purify themselves under the wise guidance of the Dear Leader Kim Jong-il (allegedly a cult figure in both the South and the North).7

Brian Myers, another remarkable specialist on North Korean culture and propaganda (not quite distinguishable areas, actually), recently wrote at length about a change of tune in Pyongyang propaganda: South Korea ceased to be depicted as the living hell, the land of depravation. The new image of the South is that of the country whose population secretly (or even not so secretly) longs to join its Northern brethren in their happiness under the wise care of the Beloved General.8

Apparently, DVDs and other information from the ROK have penetrated so much into North Korea that the argument of ROK impoverishment is not credible with many in the North and undermines overall North Korean propaganda. So an alternative approach is being taken to keep the multidimensional propaganda approach viable, claiming that the ROK is now poor in wise guidance and leadership.