Streaming multimedia applications over the Internet to mobile device or remote client is still facing the problem of client heterogeneity in terms of bandwidth capacity and user's preferences on the perceived video quality. Friendly active networks system (FANS) exploits the Application Level Active Networks (ALAN) and Cooperative Distributed Computing philosophies to address these problems. The system maintains information regarding bandwidth capacity of peer computers that are widely spread over the Internet. Each of these peer computers agrees to contribute its resources to perform computing functions on the media passing through it. The computing capability includes changing the format and/or downscaling of the video presentation size of the streaming media. Transcoding process is carried out at a dynamically selected intermediate peer so that the newly formed media format and size fits the variety of bandwidth capacity of the end terminal. Experiments on our WAN emulator show that by performing thoroughly a consecutive compression and decompression process on the streaming media our proposed method has sufficient bandwidth adaptation capability. In addition clients with poor bandwidth are accommodated and thereby improving their end-to-end reliability and performance.