Make it so that the copying is free and anyone can do it, but If I earn money from said copying, then a reasonable tiny fraction of my profits go to the entity that did most of the work in making my profits possible. All surrounded by a heaping helping of due process. Note that my proposal isn't necessarily the best one, but it doesn't attempt to enforce the impossible.
If you wanted just what they have right now, you'd pay $10/mo for released movies and DVD releases of TV shows streamed. If you wanted just TV shows including recently aired, you'd pay $15/mo. To get those released DVDs mailed would cost $25/mo, and to get it all you'd be paying $40/mo.
If you think about a music subscription service, you'd basically paying the cost of 1 album per month for songs you're going to be listening to over and over. With this structure of Netflix, you'd be paying for two DVDs per month but movies are generally only watched once or twice.
Cable services provide unbelievable horrible services (locally it's $25/mo to rent a PVR that supports DNLA but it is software disabled so you have to rent a PVR for each TV!)