The document introduces mtcast, a novel video delivery system designed for heterogeneous users with varying quality requirements, which relies on user nodes to transcode and forward video content. Mtcast aims for scalability, high user satisfaction, low latency, and robustness against node failures, demonstrating improved performance in simulations compared to existing layered multicast approaches. The method constructs a transcode tree and adapts user quality requirements dynamically to maintain service continuity while accommodating a large number of users.