Abstract: This invention provides an adaptive transcoder which streams predictive coded video data over variable bandwidth networks and to devices having varying processing capabilities. The invention dynamically and continuously determines an available network bandwidth and a client device's processing capabilities. This invention uses bit stream transcoding of video data to reduce the bandwidth required to stream the video. Certain frames of a bit stream are replaced with Pseudo-P frames according to the results of rate control feedback and frame ranking. The invention thus transmits a single MPEG stream to multiple devices having varying capabilities and does not add redundancy into the network.