This paper describes a transmission scheme for Internet video streaming that provides an acceptable video quality over a wide range of connection qualities. The proposed system consists of a scalable video coder which uses a fully standard compatible H.263 coder in its base layer. The scalable video coder is combined with unequal error protection using Reed- Solomon codes applied across packets. We present and verify a two-state Markov model for packet losses over Internet connections. The relation between packet loss and picture quality at the decoder for an unequally protected layered video stream is derived. Experimental results show that, with our approach, the picture quality of a streamed video degrades gracefully as the packet loss probability of an Internet connection increases.© (1998) COPYRIGHT SPIE--The International Society for Optical Engineering. Downloading of the abstract is permitted for personal use only.