For AT&T (T 0.17%), merging the vast majority of its entertainment assets into one big streaming service, HBO Max, will be relatively easy. Finding an effective way to build it into a genuine rival to market leader Netflix (NFLX 0.96%) or even fellow newcomer Disney+ (DIS 1.55%) will be the tricky part. However, the telecom giant does have a whole lot of name-brand content to leverage, and once HBO Max arrives in May, AT&T will also have the ability to bundle subscriptions for the service with its wireless plans.

A person watches TV on a tablet.

HBO Max is entering a crowded streaming space. Image source: Getty Images.

The company plans to use phone upgrades as a way to market the new streaming service, according to remarks AT&T COO John Stankey made at the Morgan Stanley Technology, Media & Telecom Conference in San Francisco, which Deadline reported.

The higher-end unlimited data plans the company will be pitching along with the latest smartphone models will include incentives relating to the streaming service, said Stankey. He wasn't specific about whether AT&T would offer free subscriptions to its unlimited data plan subscribers. However, given that Netflix has a free subscription deal with T-Mobile, and Verizon is offering its customers a free year of Disney+, it seems likely that AT&T would adopt a similar strategy.

The COO also promised lots of cross-promotion between the company's various brands. That includes turning the Audience channel on its DirecTV service into an HBO Max preview channel and offering an exclusive Friends reunion event.

HBO Max is coming late to a crowded party. It will have an impressive lineup of archival content, but classic shows like Friends probably won't serve to draw in large swathes of subscribers. They may help the company to retain those customers, but it will first have to lure them in, and most members of its potential subscriber base are paying for at least one streaming service already.

AT&T can bring in some of those viewers by essentially giving HBO Max away as a bonus to customers of its wireless, satellite TV, or cable services. That might be costly for the company in the short term, but it's probably a smart long-term strategy for a company seeking a beachhead in a battle with entrenched rivals.