I have an HBO subscription as part of my cable package and mostly I feel like they and Starz in particular create some really nice work. They have a good selection of movies, but their originals. A Game of Thrones really takes the cake for me, but Sparticus, Boardwalk Empire, True Blood and others really provide entertainment that doesn't exist elsewhere on TV. They have the budget and ability to walk outside the censorship line of even "deluxe, digital" cable TV. I also like the "freedom" of the movie channels for my "whenever" viewing. There are only a few times a week I'll say, "You know, I want to watch a movie", but if something takes my eye on a premium channel, I'll watch it in the evening when I may fall asleep anyway.
So with that in mind, I'll probably keep subscribing to some sort of TV service, including premium channels. FIOS TV preferably, though not available in my area. That said, when it comes to directed content (ie. I know the exact thing I want to watch), the Internet is unbeatable. Be it a YouTube/Google video philosophical talk, or the multitude of legal and quasi-legal streaming or downloading services, I can typically find much better quality content than even Cable can provide. I'll admit that I spend more time with the quasi-legal variety because the quality is better in every way.
From Hulu being castrated to lots of other big content provider online services, they're simply charging too much for too little. $3.99 for a 45 minute BROADCAST TV EPISODE, iTunes? Come on now. They offer low resolution items, often with a poor selection and catalog, idiotic DRM, craptacular format and other foul ups. Netflix was starting to be the only legal streaming service worth a damn, but studios stopped them from running anything that wasn't on DVD for 6+ months. If Netflix could stream a library larger than the "OnDemand" service Comcast offers, puts up new shows the day after they air, and offers at LEAST 720p streaming of BluRay-ripped and compressed HD content, I'd seriously consider subscribing. However, the studios seem to be shooting themselves in the foot.
HBO's attitude that Hulu "gave their stuff away for free" is worrisome and indicative of the same MBA-douche mindset that infects the entertainment industry. They did make one good move by allowing current HBO subscribers free access to HBOGo, but that should go without saying not be a big concession. I've used it a few times, but I think it needs some major improvements. First is in quality - provide good bitrate 720p or go home. With all the open source codecs out there, there's no excuse. Second, besides the "Premiere" series and whatnot, they need to have more movies and complete series available. OnDemand has a nice selection from HBO/Cinemax(they are the same company for those wondering and HBO packages usually include Cinemax. Showtime owns TheMovie Channel, and Starz I believe owns Flix...could be wrong on the last one.)so I expect nearly as much if its going to be any use. Finally, the "apps" need to move beyond simply Android and iOS - it would be nice to have a nice mobile-formatted webpage that has a choice of streams.
The other big issue is that I think HBO is missing the mark, considerably. They're using this as a value-added service, which is great for Cable/FIOS subscribers, but there are many who use online streaming services because they do not wish to buy cable or find it too expensive. If they can get HBOGo up to the same quality and content level as through a TV service, they could charge a monthly subscription for those who do not have HBO on TV. With Game of Thrones just coming out and a new season of True Blood, this is the perfect time to offer a $7 USD/Month (I think this is on the low end of how much it typically costs to add it to cable by itself. Some companies charge more like 10-15 and others have special bundles that lower it to 5, but I think 7 is reasonable) or so subscription package and watch the additional funds slide in from an untapped market.
If they continue typical content provider arrogance, they'll have no one to blame but themselves if they're not pulling in the sub numbers they're looking for. Quasi-legal and file sharing sites right now have a superior experience AND superior price, but items like the Humble Indie Bundle shows that people are willing to pay for reasonably priced and high quality content if given the chance. However, attaching all sorts of restrictions will only drive others away.