By Drew FitzGerald And Shalini Ramachandran

The star of Netflix Inc.'s drama "Marco Polo" spends much of the series held hostage in Asia by a capricious emperor.

When Netflix itself ventures abroad, it gets a considerably warmer welcome.

Broadband companies around the world have rolled out the red carpet for Netflix, opening their networks to the U.S. streaming-video company, weaving its app into their set-top boxes and bundling its subscriptions with their service plans.

That reception contrasts sharply with Netflix's experience at home, where broadband providers have sparred with it over new Internet regulations and the network traffic arrangements that the video service says it needs to efficiently deliver its data to subscribers.

In Sweden, cable provider Com Hem Group incorporated Netflix into its TiVo box as part of a marketing blitz that until recently offered three months of free access to the video service. Deutsche Telekom AG wove Netflix into its Internet TV service and offered six months of free service for some new subscribers in Austria.

A hemisphere away, Australian Internet provider Telstra Corp. signed a preliminary deal to integrate Netflix's servers into its network and on its new set-top boxes, according to a person familiar with the matter, despite its ownership stake in Presto, a direct Netflix competitor.

Australian providers iiNet Ltd. and Optus Ltd. went a step further and struck deals with Netflix to make its traffic free of data surcharges, exempting the video service from caps on how much data subscribers can use in a month. IiNet includes Apple Inc.'s iTunes store and other selected services in its Freezone, but traffic from competing video services, such as Stan and Google Inc.'s YouTube, still counts toward users' bills.

Netflix is pursuing these partnerships with broadband providers abroad as part of an aggressive expansion into 200 countries by the end of next year, up from its current total of roughly 50. Netflix said Wednesday that it added 2.6 million international subscribers, bringing its total customer base outside the U.S. to 20 million.

In an interview Wednesday, Netflix Chief Executive Reed Hastings said deals with broadband operators "are not deterministic of our fate...but they are certainly helpful."

They also can be controversial. The Australia deals led advocates of so-called net neutrality to criticize Netflix, which has complained of unfair treatment by broadband companies in the U.S., for striking preferential deals overseas.

In a shareholder letter accompanying its earnings report, Netflix said it "should have avoided" the approach it took in the Australia deals and will do so in the future. "We're running at a hundred miles an hour," and "we were just going too fast," Mr. Hastings said. He added that Netflix "came clean" that striking those deals was an "inappropriate choice."

While unmetered data was new territory for Netflix, its set-top deals are becoming a hallmark of the company's expansion around the world--a means to help sign up new subscribers. Operators world-wide collect small payments from Netflix for each subscriber it gains through a broadband provider's set-top box, according to people familiar with the matter.

Commissions run as high as 10% to 15% for each new subscriber, one of the people said. That could quickly add up to several million dollars in places such as Australia and New Zealand--a relatively small amount for a broadband company but a significant sum for Netflix, whose international operations aren't profitable because of investments in content and marketing. Mr. Hastings says that Netflix views those paid "bounty" arrangements as part of its marketing strategy.

Netflix's technology arrangements will only take it so far. Competing for subscribers in foreign markets will require it to invest in local programming and could lead to fierce bidding with competitors in those countries.

Nor have all foreign broadband operators welcomed Netflix with open arms. Cable tycoon John Malone's Liberty Global Corp., the largest cable operator in Europe, has been at an impasse with the company over set-top box partnerships, primarily because it isn't willing to hook up its networks to Netflix's servers free of charge, people familiar with the Liberty's thinking say.

Netflix has linked deals for set-top partnerships and network interconnections in its conversations with operators, saying direct interconnection is important to ensure good streaming quality.

While Liberty is open to integrating Netflix on its set-top boxes, it isn't inclined to shoulder all the costs of carrying Netflix's traffic without a fee, the people familiar with its thinking said. Liberty's U.K. affiliate Virgin Media does have a free "interconnection" deal with Netflix, but that was reached before Liberty's takeover of Virgin in 2013, the people said. Virgin also integrates Netflix as a set-top box app.

In the U.S., Netflix had to pay Comcast Corp., AT&T Inc., Verizon Communications Inc. and Time Warner Cable Inc.--the four biggest broadband providers--to allow it to directly connect its servers to their networks. None of those providers has included Netflix apps on their set-top boxes, partly because of worries that such deals could cut into their TV revenues.

A Netflix spokeswoman said it is always trying to team up with these providers through "agreements that are mutually beneficial."

So far, the only major U.S. operator to integrate Netflix's app in its set-top box is satellite-TV provider Dish Network Corp. A few smaller cable operators like Suddenlink Communications and Atlantic Broadband have also done so.

At home and abroad, a sore point for many providers has been Netflix's speed index, a monthly indicator that shows which operators in a given market offer the highest-quality Netflix streaming experiences. The operators who have traffic-exchange deals with Netflix tend to end up at the top of the list.

In Europe, the appetite to partner with Netflix is higher because broadband competition is intense in many markets and operators are eager to gain an edge over rivals. "We thought we would be stronger with Netflix being on the set-top box, rather than Netflix developing itself on other devices," said Christian Bombrun, vice president of marketing, entertainment and digital services at France's Orange SA, which has teamed with Netflix.

Marc Sommer, senior vice president for business development at Deutsche Telekom, said supporting Netflix-like services is worth the cost if they help the telecom operator attract new subscribers for its Internet-TV service.

Mr. Sommer wouldn't comment on the company's financial arrangement with Netflix, except to say, "We're not in the pro-bono charity business."

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