The traditional residuals makes sense when there is new revenue being produced when someone watches the content. If you watch a rerun of an old sitcom or movie on TBS or NBC, the distributor generates revenue due to the ads being displayed to you. Or if a movie is rereleased in the theater, new box office revenue is generated. For Netflix, whether someone watches 1 or 100 hours of content that month, Netflix still receives the same $10-20 per month. therefore Netflix has a limited, although large, amount of revenue to create/pay for content. More watching does not equal more revenue. Note: the ad-supported version of Netflix is a hybrid model.
To me, the actors and writers should look for an agreement where a percent of subscriber fees are distributed based on what that subscriber watched. For argument sake, say $1 goes to the artists out the $20 subscriber fee. If that subscriber only watched 1 episode that month, say Stranger Things, then the $1 goes to the residuals of the Stranger Things artists. If that subscriber watched 100 episodes that month of a wide variety of shows including that 1 Stranger Things episode, then the Stranger Things artists should get 1/100 of that $1, or 1 cent.
The $1 (or whatever is considered fair) gets distributed to the artists and it's based on the popularity of the content. If no one watches a piece of content, you get nada.