Look at books: You can go to your local public library and borrow any book for free, yet new books are still made under that system.

Fair point! In many libraries, you can go to the library and check out DVDs as well.

That could be a way to make videos available for free but inconvenient enough that people would pay for a more convenient way, just as they do with books.

The _vast_ majority of book sales are to private individuals, not libraries.

The cost of creating a book is essentially $0 when compared to movies.