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Ars has a great suggestive article on the pricing scheme of PSNow that I thought was very brilliant and would help the service.

Link: http://arstechnica.com/gaming/2014/06/sonys-playstation-now-pricing-is-insane-but-it-doesnt-have-to-be/

 

As for a subscription model. Sony could offer a limited rotating selection of games for a low monthly fee. Almost like a PS+ light service. Onlive has a plethora of games available on their subscription. Granted many are throw aways but there are some gems in there.

 

As it stands now the pricing is just too prohibitive to make it successful.