Well, the machine is certainly a draw
Basically propaganda had the awesome kinky machine action, and the televised/in front of a crowd element. Trying to follow these themes, I can think of a couple ways of making a sequel.
1: Another day at school, maybe a few months after Wen's ordeal, where we see how the school has changed and how the teachers and students are coping with the new machines, which are now being installed in classrooms, hallways and even bathrooms. This combined with ever present cameras, both for the benefit of surveillance and so the effects of discipline can be streamed to a select inner circle (or possibly just sold off on the internet).
-continued